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Parties Involved:
Margo Kay Rogat
Appellant
United States of America
Appellee

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

UNITED STATES OF AMERICA, ) 

) 

Plaintiff-Appellee, ) 

) 

v. ) 

) 

BRUCE HOWARD ROGAT and ) 

MARGO KAY ROGAT, ) 

) 

Defendants-Appellants. ) 

JAN 2 9 1991 

!!OBERT. L. HOECKEF. 

Clerk 

Nos. 90-1052 

90-1053 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 88-CR-249) 

Vicki Mandell-King (Michael G. Katz, Federal Public Defender, with 

her on the brief), Assistant Federal Public Defender, for the 

( Defendants-Appellants. 

Kenneth R. Fimberg (Michael J. Norton, United States Attorney, 

with him on the brief), Assistant United States Attorney, for the 

Plaintiff-Appellee. 

Before LOGAN, and TACHA, Circuit Judges, and GREENE, District 

Judge.* 

TACHA, Circuit Judge. 

* Honorable J. Thomas Greene, United States District Judge for 

the District of Utah, sitting by designation. 

Appellate Case: 90-1053 Document: 010110016418 Date Filed: 01/29/1991 Page: 1 
Defendants-appellants Margo Kay Rogat and Bruce Howard Rogat 

appeal from a district court order requiring them to pay 

$2,449,142.48 in restitution. They contend the order constituted 

an abuse of discretion because the court failed to adequately 

consider their current indigency. We affirm. 

The appellants pleaded guilty to various fraud charges. 

Margo Rogat pleaded guilty to four misdemeanor counts. She 

received a sentence of six months' imprisonment and five years' 

probation. Bruce Rogat pleaded guilty to two felony counts. He 

received a sentence of three years' imprisonment and five years' 

probation, but his sentence was deferred until his wife completed 

her term of imprisonment. The appellants remain liable for 

restitution until their probation periods expire. 

The charges arose from the appellants' conduct of two 

related businesses between 1981 and 1988. Their prepaid sales of 

adjustable hospital-type beds to 1,217 individuals, who received 

neither the beds nor any refund, amounted to $2,449,142.48. The 

appellants do not contest the number of victims or the amount of 

the loss. 

The dispute focuses on the appellants' ability to pay the 

amount of restitution ordered. Their average adjusted gross 

income from 1983 to 1986 was $122,704. The presentence reports 

indicate the appellants' total net worth is negative $185,000. 

The appellants have four dependent children, one of whom has 

cerebral palsy. Their current combined monthly salary is $2,000 

and their monthly living expenses are $2,943. At the time the 

presentence reports were compiled, the appellants had established 

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Appellate Case: 90-1053 Document: 010110016418 Date Filed: 01/29/1991 Page: 2 
a new advertising and sales business. 

The appellants first argue that in light of their current and 

projected inability to pay the amount ordered, the district court 

abused its discretion by requiring full restitution. We review 

the district court's factual findings underlying the restitution 

order under a clearly erroneous standard. United States Y..!.. 

Teehee, 893 F.2d 271, 273-74 (10th Cir. 1990). We review the 

amount of the restitution order for an abuse of discretion. 

United States Y..!.. Richard, 738 F.2d 1120, 1122 (10th Cir. 1984). 

The Victim and Witness Protection Act (VWPA), 18 u.s.c. 

§§ 3663-64, contains the requirements governing restitution 

orders. In determining whether to order restitution and the 

appropriate amount thereof, a sentencing court "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 of the defendant and the defendant's 

dependents, and such other factors as the court deems 

appropriate." Id.§ 3664(a). This statute also 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. 

Id.§ 3664(d). 

Although a defendant's indigency is not a bar to restitution, 

United States Y..!.. Sunrhodes, 831 F.2d 1537, 1546 (10th Cir. 1987), 

we will not uphold the district court's exercise of discretion 

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Appellate Case: 90-1053 Document: 010110016418 Date Filed: 01/29/1991 Page: 3 
absent any evidence the defendant is able to satisfy the 

restitution order, United States Y.!.. Clark, 901 F.2d 855, 857 (10th 

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

pay $153,762 in restitution immediately. 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 upheld if the evidence indicates 

a defendant has some assets or earning potential and thus possibly 

may be able to pay the amount ordered. The Fifth Circuit, for 

example, affirmed a $250 per week restitution order against an 

electrician with a present earning ability of $500 per week because 

he had a "viable trade and good employment prospects." United 

States~ Paden, 908 F.2d 1229, 1237 (5th Cir. 1990). In United 

States~ McClellan, 868 F.2d 210, 213 (7th Cir. 1989), the Seventh 

Circuit upheld a restitution order of over $650,000 against a 

physician who, despite his current bankruptcy and low income, had 

"tremendous earning potential." 

The possibility of repayment, however, cannot be based solely 

on chance. For example, in vacating a restitution order in United 

States~ Mitchell, 893 F.2d 935, 936 n.1 (8th Cir. 1990), the 

Eighth Circuit rejected the prosecutor's argument that the 

defendant might win the lottery. Similarly, the Seventh Circuit 

vacated an order requiring an indigent farmer to repay $32,600 by 

the date he was scheduled to be released from prison because he 

could not raise that amount while in prison. United States~ 

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Appellate Case: 90-1053 Document: 010110016418 Date Filed: 01/29/1991 Page: 4 
Studley, 892 F.2d 518, 532-33 (7th Cir. 1989). But cf. United 

States Y.!.. Ryan, 874 F.2d 1052, 1054 (5th Cir.) (restitution order 

of over two million dollars payable within five years of release 

from prison upheld because "defendant's financial situation may 

well change in the future, making him able to pay some if not all 

the restitution"), cert. denied, 489 U.S. 1019 (1989). 

The record in this case supports the district court's 

restitution order. The district judge considered the appellants' 

needs and earning ability as required by the VWPA. He indicated he 

was aware of the uncontested representations regarding their 

current financial status. Before sentencing, the judge stated, 

"I'm sure I have got everything in mind, if it's in the Probation 

Department's reports." These reports contain the financial 

information upon which the appellants now rely. The judge also 

conferred with the appellants' probation officer during the 

sentencing hearing. The judge further remarked, "It's obvious to 

the Court that it's unlikely the defendants may be able to repay 

this all very soon •••. " This fact would be obvious only to one 

familiar with the appellants' financial situation. Balanced 

against the appellants' current indigency, the court found "the 

defendants both very able, intelligent, well-educated, talented 

business people, who do have substantial capacity to earn money now 

or in the future, and, therefore, do have ability to make 

restitution." We cannot find these factual conclusions clearly 

erroneous. 

Given these facts, we hold the district judge did not abuse 

his discretion in ordering full restitution. The record here 

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Appellate Case: 90-1053 Document: 010110016418 Date Filed: 01/29/1991 Page: 5 
' \ 

satisfies the requirement in Clark of some evidence the appellants 

can satisfy the order. See Clark, 901 F.2d at 855. Also, the 

order does not require immediate payment as in Clark. See id. Nor 

does it require payment before the appellants leave prison as in 

Studley. See Studley, 892 F.2d at 531 n.11. This case most 

closely resembles Paden and McClellan, because the appellants have 

demonstrated a significant earning capacity. See Paden, 908 F.2d 

at 1237; McClellan, 868 F.2d at 213.. 

The appellants also contend the VWPA requires a district 

court to state specifically that the appellants failed to show by a 

preponderance of the evidence that they could not satisfy the 

restitution order. We disagree. The statute requires only that a 

sentencing judge consider the defendant's financial condition; the 

judge need not specifically recite his findings regarding that 

condition. See,~, Ryan, 874 F.2d at 1053; United States~ 

Atkinson, 788 F.2d 900, 902 (2d Cir. 1986). When there is 

substantial ambiguity as to whether the judge considered the 

statutory factors, specific factual findings in the record may be 

required for effective appellate review. See,~, United States 

~ Hill, 798 F.2d 402, 406-07 (10th Cir. 1986); United States~ 

Palma, 760 F.2d 475, 480 (3d Cir. 1985). Here, however, the record 

contains detailed information regarding the appellants' financial 

condition. The record also clearly indicates the district court 

weighed the appellants' financial condition and other statutory 

factors in resolving the dispute as to the proper amount of 

restitution, as the statute requires. See 18 u.s.c. §§ 3664(a), 

( d) • 

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Appellate Case: 90-1053 Document: 010110016418 Date Filed: 01/29/1991 Page: 6 
We hold the district court's finding that the appellants have 

the capacity to earn substantial amounts of money is not clearly 

erroneous. We also find the court considered the appellants' 

earning capacity and their financial status as required by the 

VWPA. The time-limited order of restitution was within the realm 

of possibility and therefore did not constitute an abuse of 

discretion. Finally, we conclude the VWPA does not require a 

district court to state the appellants failed to show by a 

preponderance of the evidence they could not satisfy the 

restitution order. We AFFIRM. 

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