Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-19-01317/USCOURTS-ca7-19-01317-0/pdf.json

Parties Involved:
James A. Simon
Appellant
United States of America
Appellee

Document Text:

In the

United States Court of Appeals

For the Seventh Circuit

No. 19-1317

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JAMES A. SIMON,

Defendant-Appellant.

Appeal from the United States District Court for the 

Northern District of Indiana, South Bend Division.

No. 3:10-cr-00056-RLM-1 — Robert L. Miller, Jr., Judge.

ARGUED NOVEMBER 5, 2019 — DECIDED MARCH 6, 2020

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

Case: 19-1317 Document: 33 Filed: 03/06/2020 Pages: 16
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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 sixyear 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

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No. 19-1317 3

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, 138 S. Ct. 337 (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

1

 Both Culver and Canterbury had indicated prior to sentencing that they

did not want restitution. Nonetheless, the court ordered Simon to make

restitution to both schools, explaining that “[o]ddly, it’s mandatory even

though Canterbury and Culver say they don’t want the money back.”

R. 174, Sentencing Tr. 455. 

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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

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No. 19-1317 5

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 postCase: 19-1317 Document: 33 Filed: 03/06/2020 Pages: 16
6 No. 19-1317

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. 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

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No. 19-1317 7

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 district

court improperly assigned to him the burden of showing that

something was amiss with the revised figure. He requests that,

in the event we do not strike the restitution due to Culver

altogether, we remand for an evidentiary hearing.

Here we run into yet another timeliness problem. Simon

did not immediately appeal the district court’s decision

amending the restitution order, nor did he file a motion to

reconsider within the 14-day time period to appeal so as to

render the order non-final and postpone the appeals deadline.

See United States v. Rollins, 607 F.3d 500, 501–02, 504 (7th Cir.

2010). The 14-day time period of Federal Rule of Appellate

Procedure 4(b)(1)(A) controls, because Simon’s restitution

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obligations were part of his original sentence. See United States

v. Apampa, 179 F.3d 555, 556–57 (7th Cir. 1999) (per curiam)

(“the core of a ‘criminal case’ to which Rule 4(b) applies is the

sentence”) (emphasis in original); see also United States v. Segal,

938 F.3d 898, 902–03 (7th Cir. 2019) (noting that civil appeal

deadlines may apply “under the umbrella of criminal cases”

where appealable order is “collateral to criminal punishment,”

but criminal deadlines control where order or issue is “part of

the criminal sentence”) (cleaned up). Simon’s motions were

filed well outside this period—more than seven months after

the district court revised the restitution order—with the result

that the notice of appeal he filed after the court disposed of his

motions to reconsider was untimely as to the court’s March 7

order. See id. at 502. And because the government is standing

on its rights as to the timeliness of Simon’s notice of appeal, we

are obliged to deem the appeal too late to preserve Simon’s

challenges to the amended restitution order. See Rollins, 607

F.3d at 501–02. 

Simon has also renewed his argument that he should be

given the opportunity himself to seek an amendment to the

restitution order to relieve him of the obligation to make

payments to the Department of Education. Simon represents

that his daughter had paid off her student loans, and as a result

the Department of Education no longer faces any liability on its

guarantee of those loans. But even if we assume arguendo that

the district court was wrong to characterize this line of argument as a “rehashing” of the position he took at sentencing,

2019 WL 422447, at *4, Simon has not, as the district court

pointed out, identified a mechanism to seek a substantive

change in his restitution obligations so many years after

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No. 19-1317 9

sentencing, id. “Once a court sentences a criminal defendant,

it has jurisdiction to continue hearing related issues only when

authorized by statute or rule.” United States v. Goode, 342 F.3d

741, 743 (7th Cir. 2003). Here, the fourteen-day deadline for

correcting a sentencing error under Federal Rule of Criminal

Procedure 35(a) had long passed by the time Simon filed his

motions. A second motion under section 2255 would be

unavailable to address Simon’s concerns, given that restitution

does not meet the “custody” element of the statute. Barnickel,

113 F.3d at 706. A material change in the defendant’s economic

circumstances affecting his ability to pay restitution might

allow some adjustments to the restitution order, see 18 U.S.C.

§ 3364(k), but even if Simon’s daughter has repaid the underlying school loans, that does not constitute a material change in

his economic circumstances. And none of the other avenues

referred to in section 3664(o)(1) appear available to Simon. See

United States v. Puentes, 803 F.3d 597, 607–08 (11th Cir. 2015)

(surveying these possibilities).

Having said all this, we add that we are not without our

doubts as to whether the district court had the authority to

entertain the government’s motion to amend the restitution

order.2 See Puentes, 803 F.3d at 607 (“every circuit court to

2

 On appeal, the government has framed the issue as jurisdictional;

however, we agree with our sister circuits that “the question before us does

not implicate the district court’s subject matter jurisdiction.” United States

v. Wyss, 744 F.3d 1214, 1217 (10th Cir. 2014); see also Puentes, 803 F.3d at

605–08; United States v. Grant, 715 F.3d 552, 558 (4th Cir. 2013). Instead, it

implicates “the district court[‘s] lack[] [of] statutory authority to order a

belated reduction in Defendant’s restitution ....” Wyss, 744 F.3d at 1217. This

(continued...)

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10 No. 19-1317

consider this issue has indicated that a district court may only

modify a mandatory restitution order through the means

specified in § 3664(o)”); see also id. at 608 (“a district court may

not modify a mandatory order of restitution unless one of the

circumstances in § 3664(o) applies”); cf. United States v.

Pawlinski, 374 F.3d 536, 540-41 (7th Cir. 2004) (emphasizing that

federal courts do not have discretion to redirect restitution in

a manner that ignores the statutory limits Congress placed on

restitution orders). When we inquired about this at oral

argument, the government’s counsel indicated that it was

relying on section 3664(k). But as is true with respect to

Simon’s challenges, section 3664(k) would appear to be

inapplicable, as the government’s motion was not premised on

a material change in Simon’s economic circumstances. In any

case, Simon’s attempt to challenge the order granting the

2

 (...continued)

determination “does not utilize ‘authority’ in the jurisdictional sense, but in

the sense in which a court lacks ‘authority’ to impose, for instance, a

sentence below a statutory minimum.” Id. (citing Dolan v. United States, 560

U.S. 605, 626, 130 S. Ct. 2533, 2547 (2010) (Roberts, C.J., dissenting)). We take

this opportunity to clarify that district courts have subject-matter jurisdiction to consider a motion to correct, modify, amend, or adjust restitution

consistent with § 3664(o) regardless of whether the movant is in fact

statutorily eligible for such relief. See United States v. Ceballos, 302 F.3d 679,

692 (7th Cir. 2002) (explaining that “judges and legislators sometimes use

the term jurisdiction to erroneously refer to a court’s authority to issue a

specific type of remedy, rather than to the court’s subject-matter jurisdiction”); see also United States v. Taylor, 778 F.3d 667, 669–71 (7th Cir. 2015)

(holding that a district court had jurisdiction—meaning the power to

adjudicate—a motion for a reduced term of imprisonment even though it

was without the authority to grant the motion because the defendant did

not satisfy the statutory criteria for relief).

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No. 19-1317 11

government’s motion comes too late. We end by noting, as the

district court did, that the revisions to Simon’s restitution

obligations were not to his detriment, as they eliminated one

payee altogether and simply reflected a lower, updated balance

owed to another. 2019 WL 422447, at *2.

III.

Finding none of Simon’s challenges to his restitution

obligations, as established by either the original or amended

restitution order, to be timely, we AFFIRM the denial of his

motions to reconsider.

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12 No. 19-1317 

HAMILTON, Circuit Judge, concurring. I join the court’s 

opinion in all respects, including our concerns about the district court’s authority to grant the government’s original motion to modify the restitution portion of the sentence. There 

was no timely appeal regarding that modification, though, 

and without a proper appeal, we do not have the power to 

correct a non-jurisdictional error. See Greenlaw v. United 

States, 554 U.S. 237 (2008). 

I write additionally to highlight a related issue that arose 

here and that may arise in other cases: the district court’s authority to resolve post-sentencing disputes about restitution, 

particularly with respect to credit for payments made. During 

oral argument, this court raised the issue of the district court’s 

authority, statutory or otherwise, to amend the restitution 

portion of the judgment as the government asked in its motion. Counsel had given thoughtful consideration to the problem, but no fully satisfactory answer emerged. I offer not a 

fully satisfactory answer but in essence a tracing of steps so 

that the choices are clear. Perhaps a better answer will arise 

from litigation or legislation. 

The total amount of restitution for each victim and relative 

priorities among them are part of the core criminal judgment. 

18 U.S.C. §§ 3663 & 3663A. Challenges to those numbers and 

priorities need to be raised in a direct appeal. United States v. 

Bania, 787 F.3d 1168, 1172 (7th Cir. 2015) (rejecting late challenge to restitution order); Barnickel v. United States, 113 F.3d 

704, 706 (7th Cir. 1997) (same). The procedures for issuing and 

enforcing restitution orders as part of criminal sentences are 

set forth in 18 U.S.C. § 3664. 

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No. 19-1317 13

 

Counsel suggested § 3664(k) as a source of the court’s authority here. I’m not so sure. If the defendant’s economic circumstances have changed in a way that may affect his ability 

to pay restitution, § 3664(k) authorizes a district court to adjust a payment schedule or to require immediate repayment 

in full. Those statutory terms do not seem to apply to this case, 

nor to a perhaps more routine disagreement about crediting 

restitution payments actually made. There was no change in 

defendant Simon’s economic circumstances, and the court’s 

amendment to the restitution order was not merely an adjustment of a payment schedule or an order of immediate repayment. 

A second suggested possibility is § 3664(o). That provision, however, explains only that a sentence with an order of 

restitution is a final, appealable judgment notwithstanding 

the fact that the sentence might be modified in any of several 

ways. Most of the cited paths to modification are not specific 

to restitution. The paths specific to restitution also don’t seem 

to apply here. Subsection 3664(o) mentions § 3664(k), but that 

doesn’t add anything new. Subsection 3664(o) also mentions 

amendment under § 3664(d)(5), which allows some later 

amendments to a restitution order where a victim is not able 

to identify or calculate full losses at the time of original sentencing. That’s also not the problem here. 

Next, § 3664(o) mentions 18 U.S.C. § 3572. That statute 

governs fines as part of criminal sentences and authorizes 

some limited forms of amendment after sentencing. It can be 

applied to restitution orders pursuant to § 3664(m)(1), but the 

government has not relied on it. Finally, § 3664(o) mentions 

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14 No. 19-1317 

18 U.S.C. § 3613A, which authorizes a district court to take 

measures when a defendant fails to make payments toward a 

fine or restitution as ordered. While Mr. Simon has made only 

modest payments toward his restitution obligation, the government has not invoked § 3613A, which also would not apply to a dispute about credits for payments or, as in this case, 

one victim’s decision not to seek or accept restitution. 

Still, there may be some better statutory answers to my 

question than have been raised so far. Paragraph 3664(m)(1) 

provides cryptically: “An order of restitution may be enforced 

by the United States in the manner provided for in subchapter 

C of chapter 227 and subchapter B of chapter 229 of this title” 

or by “all other available and reasonable means.” The crossreferences direct the reader to 18 U.S.C. §§ 3571–3573 and 

§§ 3611–3615. With one exception in § 3572(d)(3), those statutes put the ball in the government’s court to initiate enforcement efforts and modifications. They clearly contemplate that 

the district court will resolve such issues. See 18 U.S.C. 

§§ 3573, 3613, & 3613A. See also § 3664(j)(2) & (n) (using passive voice—“shall be reduced” and “shall be required”—

where district court is obvious candidate to “reduce” or “require”). 

Where does that leave us in terms of resolving administrative disputes (as distinct from the doubtful authority to modify each victim’s total amount and priorities among them)? I 

would point to either the tools available under § 3664(m) or 

the district court’s inherent authority to administer a part of 

its judgment that imposes continuing obligations. I offer the 

inherent authority idea with diffidence. The specific statutory 

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No. 19-1317 15

 

authority for other types of amendments tends to weigh 

against finding other authority implied regarding a subject—

restitution—that is established by statute and governed by 

statute in such detail. More generally, I am aware of how cautious courts must be with exercises of inherent authority. See, 

e.g., Degen v. United States, 517 U.S. 820, 823 (1996) (discussing 

general need for restraint in resorting to inherent authority); 

Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991) (affirming use 

of inherent authority to impose sanctions for litigation conduct, but cautioning need for restraint); Young v. U.S. ex rel. 

Vuitton et Fils S.A., 481 U.S. 787, 798 (1987) (contempt power 

is inherent but must be exercised with restraint); Fuery v. City 

of Chicago, 900 F.3d 450, 463–64 (7th Cir. 2018) (discussing inherent power generally and affirming district court’s inherent 

authority to enter judgment against parties who willfully misled court and disobeyed court orders). 

Despite this need for caution, however, there is a practical 

need for someone to be in charge of the continuing administration of the restitution obligation and disputes that may 

arise under it that do not involve the total amount and victimspecific amounts and priorities that should be resolved at sentencing or on direct appeal. The restitution obligations are 

part of the sentence, and I see no candidate better than the 

sentencing court for resolving such disputes that cannot be 

resolved by agreement of the parties. 

If there is a better statutory answer, and § 3664(m) may 

provide it, I would welcome it. If not, I hope those not satisfied with inherent authority would endorse legislation expressly authorizing such continuing supervision by a district 

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16 No. 19-1317 

court, perhaps akin to a court’s continuing authority over a 

defendant on supervised release. See 18 U.S.C. § 3583(e)(2) 

(court may modify conditions at any time prior to expiration 

of term). 

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