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Parties Involved:
United States of America
Appellee
Susan Barbara Werner
Appellant

Document Text:

FILED 

United Statt5 Court of Ap_peals 

Tenth Cirruit 

OIIITED STATES COURT OF APPEALS 

TElr.rH CIRCUIT 

FEB 2 2 1g91 

ROBERT L. HOECKER 

Clerk 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

SUSAN BARBARA WERNER, 

Defendant-Appellant. 

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ORDER AJID JIJI)GifEBT* 

No. 90-6226 

(D.C. No. CR-90-69-W) 

(W. Dist. of Okla . ) 

Before HOLLONAY, BARRETT AND~. Circuit Judges. 

Submitted on the briefs. 

Susan Barbara Werner (Werner) appeals from the sentence 

imposed following her plea of guilty to one count of unlawfully 

converting to her own use property of the United States in 

violation of 18 u.s.c. S 641. 

Werner was employed as a secretary for five social workers in 

the Family Service Division of the Oklahoma Department of Human 

Services (DHS} . In June, 1989, she di scovered the computer code 

and procedure necessary to reroute Authority to Participate forms 

* This Order and Judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. lOth Cir. R. 36 . 3. 

Appellate Case: 90-6226 Document: 01019728601 Date Filed: 02/22/1991 Page: 1 
(ATPs) without the social workers' knowledge. Thereafter, Werner 

began rerouting returned ATPs, food stamp coupons and Aid For 

Dependent Children (AFDC) checks to accomplices throughout the 

Oklahoma City area. Upon receiving the items, the accomplices 

would convert the ATPs into food stamps and convert the food 

stamps and AFDC checks into cash or cocaine to be shared with 

Werner. 

In late September, 1989, Werner was contacted by the FBI 

relative to her diversionary activities. Werner agreed to 

cooperate with the FBI. From September 25 to October 17, 1989, 

she continued ·her diversionary activities with the assistance of 

the FBI. Werner's cooperation and subsequent testimony led to the 

conviction of a number of her accomplices. 

On April 12, 1990, Werner entered a guilty plea to one count 

of unlawfully converting government property to her own use in 

violation of 18 u.s.c. S 641. Included withi n her presentence 

report was the FBI's estimate that Werner had diverted 

approximately $35,000 of OHS funds prior to her cooperation with 

the FBI. The report also reflected Werner's belief that she had 

diverted only $20,000 of DHS funds before cooperating with the 

FBI. 

The presentence report also included Werner's offense 

computation under the Sentencing Guidelines. Werner received a 

total offense level of 14, including four levels for her theft of 

more than $20,000 and less than $40,000. She also received six 

criminal history points for her four prior felonies which resulted 

in a criminal history category of III. Werner's offense level of 

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Appellate Case: 90-6226 Document: 01019728601 Date Filed: 02/22/1991 Page: 2 
14 and a criminal history category of III resulted in a guideline 

imprisonment range of 21 to 27 months. 

Following a sentencing hearing, the court sentenced Werner to 

27 months imprisonment and three years supervised release, fined 

her $50 but waived the fine because of her inabi lity to pay, and 

ordered her to pay $35,000 in restitution to DHS . 

On appeal, Werner contends that the court erred in: (1) 

determining her offense level; (2) determining the level of 

adjustment for her role in the offense; and (3) ordering that she 

pay $35,000 in restitution to DHS. 

I • 

Werner contends that ·the district court incorrectly applied 

§ 281.1 of the Sentencing Guidelines in determining her offense 

level. 

Section 2B1.l(b)(l) (F) provides that, if the loss was more 

than $10,000 (but less than $20,000), the offense level is 

increased five levels. § 2Bl.l(b)(l}(G) provides that, if the 

loss was more than $20,000 (but less than $40,000), the offense 

level is increased six levels. Werner contends that the court 

erred in accepting the government's estimate that she had 

diverted $35,000 and in increasing her offense level six levels. 

She contends that the court should have accepted her estimate that 

she diverted less than $20,000 and should have increased her 

offense level by only five levels. Werner further contends that 

the government presented nothing to substantiate the estimated 

$35,000 diversion. 

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Appellate Case: 90-6226 Document: 01019728601 Date Filed: 02/22/1991 Page: 3 
During the trial of her three co-defendants, Werner testified 

that the ATPs she diverted were generally in excess of $250. She 

also testified that she began the illegal diversions in late June, 

1989, and continued until late September, 1989, when she began 

cooperating with the FBI. Special Agent Raftery testified that 

Werner admitted "directing" three to four ATPs per day. 

Furthermore, Paragraph 5 of Werner's presentence report, to which 

werner did not object, reflects that Werner mailed three to four 

fraudulent items per day. This evidence supported the 

government's est~ate that Werner illegally diverted $35,000. 

We review the district court's factual findings under the 

clearly erroneous standard and afford due deference to the 

district court's application of the Sentencing Guidelines to the 

facts. United States v. Easterling, 921 F.2d 1073 (lOth Cir. 

1990). Application Note 3 to § 2Bl.l provides that "[t]he loss 

need not be determined with precision, and may be inferred from 

any reasonably reliable information." Applying this standard, we 

hold that the court did not err in finding that Werner had 

diverted $35,000 and that her offense level should be increased by 

six levels under S 2Bl.l(b)(l)(G). 

II. 

Werner contends that the district court erred in determining 

that she had an aggravating role in the offense and in increasing 

her offense level by four levels under § 3Bl.l(a) ("If the 

defendant was an organizer or leader of a criminal activity that 

involved five or more participants or was otherwise extensive, 

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Appellate Case: 90-6226 Document: 01019728601 Date Filed: 02/22/1991 Page: 4 
increase by 4 levels.•). The determination of whether the 

defendant was a manager or supervisor is a factual one and subject 

to review under the clearly erroneous standard. United States v. 

Alvarado, 909 F.2d 1443, 1447 (lOth Cir. 1990). · 

Werner's contention is without merit. During her sentencing 

hearing, Werner testified: 

This No. 20 [Paragraph 20 in the presentence 

report] about my engineering the whole thing and all of 

that, I don't believe that would have come out as much 

as it did had I not cooperated and had I not testified. 

I don't think -- I just don't feel it is right to 

hold that against me, because I think if I wouldn't have 

testified and just pleaded guilty and nothing else would 

have come of it, my top involvement in this may not have 

never surfaced. 

(R., Vol. II at p. 12). 

Inasmuch as Werner's testimony reflects that she was the organizer 

and leader, she has failed to demonstrate that the district court 

erred in increasing her offense level under S 3Bl.l(a). 

III. 

Werner argues that the district court abused its discretion 

when it ordered her to pay $35,000 in restitution. We agree. 

18 u.s.c. § 3556 authorizes the court to impose restitution 

in accordance with 18 u.s.c. §§ 3663 and 3664 for violations of 

Title 18 and designated subdivisions of 49 U.S.C. S 1472. Section 

3664(a) provides in part: 

(a} The court, in determining whether to order 

restitution---and the amount of such restitution, shall 

consider the amount of the loss sustained by any victim 

as a result of the offense, the financial resources of 

the defendant, the financial needs and earning ability 

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Appellate Case: 90-6226 Document: 01019728601 Date Filed: 02/22/1991 Page: 5 
of the defendant and 

such other factors 

[Emphasis supplied]. 

the defendant's dependents, and 

as the court deems appropriate. 

Although the district court did not make a finding on 

Werner's ability to pay $35,000 in restitution to DHS, Werner 

contends that it did and that there are no facts in the record to 

support such a finding. Werner observes that Paragraph 63 of the 

presentence report reflects that she has no appreciable assets. 

Werner also observes the court's finding that she did not have the 

ability to pay a $50 fine, after which the fine was waived, is 

inconsistent with the court's order that she pay $35,000 in 

restitution to OHS. 

The government responds, citing to United States v. Paden, 

908 F.2d 1229 (5th Cir. 1990), that inasmuch as this issue is 

raised for the first time on appeal, it should not be considered. 

The government argues alternatively that, even if we do consider 

this issue, Werner failed to carry her burden under§ 3664(d) 1 of 

demonstrating her inability to pay the court-ordered restitution. 

In United States v. Rogat, ___ F.2d ___ , Nos. 90-1052 and 90-

1053, slip op. (10th Cir. January 29, 1991), we reviewed the 

1 Section 3664(d) provides: 

Any dispute as to the proper amount or type of restitution 

shall be resolved by the court by the preponderance of the 

evidence. The burden of demonstrating the amount of the loss 

sustained by a victim as a result of the offense shall be on the 

attorney for the Government. The burden of demonstrating the 

financial resources of the defendant and the financial needs of 

the defendant and such defendant's dependents shall be on the 

defendant. The burden of demonstrating such other matters as the 

court deems appropriate shall be upon the party designated by the 

court as justice requires. 

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conditions under which a court-ordered restitution will be 

affirmed: 

We revi ew the amount of the rest itution order for 

an abuse of discretion. United States v. Richard, 738 

F.2d 1120, 1122 (lOth Cir. 1984). 

* * * * * 

Although a defendant's indigency is not a bar to 

restitution, United States v. Sunrhodes, 831 F . 2d 1537, 

1546 (lOth Cir. 1987), we will not uphold the district 

court's exercise of discretion absent any evidence the 

defendant is able to satisfy the restitution order, 

United States v. Clark, 901 F.2d 855, 857 (l Oth Cir. 

1990). In Clark, the district court ordered a defendant 

to pay $153,762 in restitution Lmmediately. The only 

evidence of the defendant's financial condition was a 

presentence report indicating a negative monthly cash 

flow of $249. Id. Based on this evidence, we vacated 

the district court's order as an abuse of discretion. 

Id. 

A restitution order will be uphel d if the 

indicates a defendant has some assets or 

potential and thus possibly may be able to 

amount ordered . • • . 

evidence 

earning 

pay the 

The possibility of repayment, however, cannot be 

based solely on chance 

Rogat, slip op. at pp.3-4. 

Applying these standards, we hold that the district court 

erred in ordering that Werner pay $35,000 in restitution to DHS . 

The district court failed to comply with§ 3664(a), which requires 

the court to determine a defendant's financial resources before 

ordering restitution. Also, as in United States v. Clark, supra, 

there was no evidence that Werner would be able to satisfy the 

restitution order. 

Moreover, accepting arguendo the government's contention that 

§ 3446(d) applies in this case, Werner demonstrated her inability 

to pay. Paragraph 63 of the presentence report reflected 

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Werner's statement that she had no appreciable assets. 

Furthermore, during the sentencing hearing counsel for Werner 

advised the court that: "She is without funds to pay for any 

restitution. The likelihood of obtaining funds in the future for 

restitution to the Department of Human Services is fairly slim, if 

none. " ( R., Vol. II, pp. 9-10). This statement was unchallenged 

and the court undoubtedly relied on the presentence report and the 

comments of counsel when it waived the $50 fine it had assessed 

against Werner "because of inability to pay." (R., Vol. I, Tab 

12). 

Although the district court failed to comply with S 3664(a), 

and although the district court waived Werner's $50 fine because 

of her inability to pay it, the district court nevertheless 

ordered Werner to pay $35,000 restitution to DHS. We hold that 

the court-ordered $35,000 restitution to DHS constituted an abuse 

of discretion. United States v. Rogat, supra, citing United 

States v. Richard, 738 F.2d 1120, 1122 (lOth Cir. 1984). 

Werner's sentence to 27 months imprisonment and three years 

supervised release is AFFIRMED. The court-ordered restitution to 

DHS is VACATED and the case is REMANDED for further proceedings 

consistent herewit h. 

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Entered for the Court: 

James E. Barrett, 

Senior United States 

Circuit Judge 

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