### FILED U.S. COURT OF APPEALS ELEVENTH CIRCUIT March 30,

2004 THOMAS K. KAHN CLERK [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE EL EVENTH C IRCUIT

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_______ No. 03-11 016

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_______ D. C. Docket No. 02-00393-CR-2-1 UNITED STATES OF AMERICA, Plaintiff -Appella nt,

versus KYUNG SIK

KIM, a.k .a. Jo hn Kim, Defendant-Appellee.

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_______ No. 03-11 022

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_______ D. C. Docket No. 02-00600-CR-1-1 UNITED STATES OF AMERICA, Plaintiff -Appella nt,

versus IN OK KIM, a.k .a. Cin dy Ki m, Defendant-Appellee.* Honorable John F. Nangle, United States District Judge for the Easte rn District of Missouri, sitting by designa tion. 2 _________________

_______ Appeals from the United States D istrict Court for the N orthern D istrict of Georgia

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________ (March30, 2004) Before ANDERSON and BLACK, Cir cuit Jud ges, and NANGLE * , District Judge. BLACK, Circuit Judge: In this sent encing guide lines case , Appell ee Ky ung Sik Kim

pled guilty

to conspirac y to def

raud the U

nited Stat es, in viol ation of 42 U .S.C. § 1760(g) a nd 18 U.S. C. § 371. His wif e, Appe llee In O k Kim , pled guilty to f raudulentl

y obtaini ng govern ment assistan ce, in viol ation of 4 2 U.S.C. § 1760( g). At sentencing , the distr

ict court g

ranted ea ch Appell ee a down ward dep arture f

rom the guid elines bas ed on thei r extraordi nary restitut ion. The Gover nment appeals

. We hold e xtraordina

ry re stitution, whether

paid befor

e or after adjudi cation of guilt, may, in the un usual cas e, support a departure f rom the guidel ines, so we affirm the downwar

d departure.

I. BACKGROUND3

This case arises from A

ppellees’ scheme to defra ud the Special Supplem ental Food Program for Wo men, Infants, and Children (WI C). W IC is a federal program designed to provide “ supplem ental foods and nutriti on educatio n” to “pregnant, postpartum, and breastfeeding women, infants, and y oung children from fam ilies wit

h inadequat e incom e.” 42 U .S.C. § 1786(a). WIC i s admin istered in

Georgia by the Georgia

Departm ent of Hum

an Resourc es through local off ices. W IC opera tes m uch like a f

ood stam p program . Individu als who qualify to recei ve WIC benefits r eceive f ood vouchers through loca l WIC o ffices. Here, the rele vant local

WIC of fice wa s Southside H ealthcar e, Inc. At all relevant time s, Southsi de em

ployed Valenci a Grant as a senior WIC c lerk. Through her employm

ent, Grant became

acquainted with Carolyn Mitchell, an eligible recipient o f Southside ’s W IC voucher s. During May 199 6, Mitchell recruited Gran t into a sc heme to defraud WIC. Grant used h er positi on to ste al unclaimed WIC vo uchers from Sout hside. Mitchell then approached Appellees to sell these vouchers because Appellees were retailer s who part

icipated in WIC. Appellee s bought vouchers from Mitchell a

t a discoun t while dep ositing the full amoun t of the vo ucher into their bank accounts

. Over the three y ears that

this schem

e lasted, Appellee s, Mitche ll, and G rant1 Mrs. Kim pl ed guilt y de spite the f

act that she had pa ssed a lie detector test. 4 defraude d the Unite d States of $268,237.0 3. Appel lees’ s hare wa s roughlytwothirds of th ese fra

udulently obtained f

unds. After t hey w ere indic ted, App ellees ne gotiated ple a agreem ents. Mr . Kim pled guilty to conspiracy to defraud the United States, in violation of 42 U.S. C. § 1760(g) an d 18 U.S. C. § 371. Mrs. K im, on the other

hand, ple d guilty

to fraudulently obtaining government assistance, in violation of 42 U.S.C. § 1760(g). 1 Under the ir plea a greem ents, Ap pellees agreed to pa y res titution in th e amount of the entire fraud, $268,237.03, before sentencing, but expressly reserved the right to move the sentencing judge pursuant to U.S.S.G. § 5K2.0 (1997) for a downward dep arture on t he basis o f “extraordinary rest itution .” On the same day

Appellees pled guilty, they tendered $50,000 in personal funds as re stitution. At senten cing, Ap pellees pa id their remaining restit

ution by presenting a check for $218,237.03, and moved for a downward departure under U.S.S.G. § 5K2.0 (1997) on the basis of their extraordinary restitution. In support of their m otion, App ellees as serted they we nt to signifi cant lengt hs to obtain t

his money in the thre e short m

onths betwe en their guilty pl eas and the sentencing hearing. Appellee s contacte d their fa mily and frie nds in the U

nited Stat es and South Korea to secure lo ans so th ey could pay the Uni ted States full resti tution.2 The district court applied the 1997 sentencing guide lines because they were in effect at the time of

the offe nse and a pplication of the 20 02 guide lines woul d have vio lated the Ex Post Facto Clause. See U.S.S.G. § 1B1.11(b)(1) (2002). 5 After receiving permission from the trial court, Mrs. Kim traveled to South Korea and executed $97,000 in promissory notes, to be repaid within the following ye ar at 9 percent interes t, from four fam ilies who w ere fri ends of her parents. Mrs. Kim’ s brother- in-law, Nelson A hn, liquida

ted $50,000 of his stock

portfolio t o make another lo an to the K

ims a t no intere st. Mrs. Kim

also asked

her pare nts to lend her and her husband $25,000 at no interest. Mr. Kim obtained additional loans of $10,000 and $11,000 from two friends in Georgia. Finally , Appellees withdrew the rem aining bala

nce of $25, 000 from

their savings account

. Apply ing the 1997 sentencing gui delines, 2 the pre- sentence investigati on report recommended that the district court sentence Mr. Kim at level 13, criminal history category II, wi th a result

ing guideline

range of 15–27 mo nths’ impri sonme nt, and Mr s. Kim at level 1 0, crim

inal histor

y cat egory

I, with a resulting guideline ra

nge of 6–12 m

onths’ im prisonm ent. Th e district

court, however, found Appe llees’ restitutio n was extr aordinar y and gr anted their motion for a downward departure. Although the Government argued that Appellees were providing restitution only as an attempt to receive a reduced sentence, the district6

court rejected that argument an d found as a fact that th eir real reaso n was remorse. Specific ally, the distric t court exp lained: The com ments that [App ellees an d their law yers] all have m

ade about the embarrassment, the humiliation, the shame , the sorrow they exhibited by

finding the mselv es in this sit uation wa s so apparent to me. In my

view their effor

ts to com e up with th is large a mount of money is extraor

dinary , and the s teps they ’ve unde rtaken to c ome up with thi s mon ey is ext rao rdi nar y. Accordingly, the distric t court dep arted dow nward an d sentence d both Appellee s at offe nse level 9 . Mrs. Kim was sentenced to tw o year s’ proba tion, four months of which to be served as in-home detention. Likewise, Mr. Kim was

sen ten ced to fiv e yea rs’ pro bat io n, s ix mon th s o f wh ich to be s erv ed a s i n-h ome detention. The Governme nt appeale d. II. STANDARD OF REVIEW Whethe r extraor

dinary post-adj udication restitution i s a discouraged or prohibited factor is a question of law subject to de novo review. 18 U.S.C. § 3742(e)( 3)(B)(i i) (requi ring de novo r

eview w hen a sentence depar

ture “ is not authorize d under sec tion 3553(b) ”); Koon v. United States , 518 U. S. 81, 10 0, 116 S. Ct. 2035, 2047 (1996) (“[W ]hether a factor is a perm issible basis for departure under any circum stances is a question o f law, and the cou rt of appe als need not defer to the distric t court’ s resolutio n of the poin t.”); see also 18 U.S. C. 3553(b)3 Previously, we revie wed a district court’s decision to depart for abuse of disc retion. Koon , 518 U.S. at 100, 116 S. Ct. at 2047–48. In 2003, however, Congre ss enacted the Prosecutorial Remedies and Other Tools to end the Exploitation of Children Today Act of 2003 (PROTECT Act). Pub. L. No. 108-21, § 1, 117 Stat. 650 (2003). Among other things, the PROTECT Act altere d the stan dard of r eview we apply when con sidering

most chall enges

to sentencing departures. See 18 U.S.C. § 3742. Retroactive application of the PROTECT Act’s appellate standards of review does not violate the Ex Post Facto Clause, United States v. Saucedo-Patino , ___ F.3d ___ (No. 03-10946, Jan. 27, 2004), so we therefore apply the current statutory standar d of revi ew provi sions.

4 Further more, if t he issue h ere invo lved whether “th e senten ce depa rts to an u nreasonable degree from the applicable g uideline range,” 18 U.S.C. § 3742(e)(3)(C), we would “give due deference to the district court’s application of the g uidelines to the facts,” id. 7 (allowing sentencing courts to depart when they find “that there e xists an aggravati ng or mitigating c ircum stance of a kind, or

to a degre e, not ade quately taken into consideration by the Sentencing Comm ission”). Since Congress passed the PROTECT Ac t, the district court’s conclusion that Appellees’ restitution was extraord inary enough on the se facts to warrant a depa rture is no w also subj ect to de novo re view. 3 18 U.S.C. § 3742(e)(3)(B)(iii) (requiring de novo review when “the sentence is outside the applicabl e guideline

range, a nd the sente nce depar

ts from the applic able guidel ine rangebased on a f actor tha t is not jus tified by

the facts of the case” ). Nev ertheles s, we e mphas ize that t he PROT ECT A ct does not

remo ve any

of the distr

ict court’ s tradition al discre tion in conduc ting fact f inding, so the di strict cou rts factual finding s remain subject t o clearly erroneo us review. 4 Id. § 3742 (stating that appe llate cour ts “sha ll accept the finding s of fact

of the district court unless they are clearly erroneous”).5 The diff erence betwee n discour aged f actors a nd encou raged factor s alrea

dy t aken into account by the

applicable guideline is purely semantic, not legal. Koon instructs that “[i]f the special factor is a discourage d factor, or an encourag ed factor already taken into account by

the applicable Guideline, the court should depart only if the factor is present to an exceptional degre e or in some other way

makes the case different from the ordina ry case where the factor is present.” 518 U.S. a

t 96, 116 S. Ct . at 2045 ( citation omitted). N o legal consequences a

ttach to th

is distinction because both categories only permit departures under identical circumstance s. For the sake of s implicity

, theref ore, we frame the issue a s decidin g wheth er extrao

rdinary restitution is a prohibited or discouraged factor. 8 III. DISCUSSION A. Extraordin ary Resti tution as a P ermissibl e Basis for

Departure “To determ

ine wheth er a fac tor which takes a c ase outside

the heart land should result in a diff

erent sen tence, a district c ourt m

ust first de cide whe ther the factor is forbidden, encouraged, discouraged, or unaddressed by the guidelines as a potential basis for departure.” United States v. Hoffer , 129 F.3 d 1196, 1200 (11th Cir. 1997) (citation omitted). Accordingly , we first analyze whether extraord inary restitutio n is a prohib ited or disc ouraged f actor 5 upon which to dep art d own ward . Thi s di sti nct ion is c rit ical . Whil e di str ict cou rts may never depart on the basis of prohib ited facto rs, Koon , 518 U.S. at 95–96, 116 S. Ct. at 204 5, d ist rict cou rts may occasionall y depart on t

he basis of

discourage d factors , id. at 96, 116 S. Ct. at 2045. However, discouraged factors support departures “only if the factor is present to an exceptional degree or in some other way makes6 The Government suggests that the fe deral circuits are split when it contends that the

Second, Fifth, and Sixth Circuits have held restitution to be a prohibited factor. See, e.g. , United States v. Carpenter , 320 F.3d 334, 343 (2d Cir. 2003); United Sta tes v. Ak in , 62 F.3d 700, 702 (5th Cir. 1 995); United Sta tes v. De Monte , 25 F.3d 3 43, 346 (6 th Cir. 1994 ); United States v. Flowers , 55 F.3d 218, 222 (6th Cir. 1995)). We doubt there is a circuit split because none of these cases hold extraordinary restitution to be a forbidden factor. Admittedly , in Carpenter the Second Circuit explained that because “ restitutio n before convictio n cannot ju stify a down ward departure , we do not think that compliance with court-ordered restitution after c onviction and sentencing can.” Carpenter , 320 F.3d at 343 (e mphasis a dded). H owever , the Second Circuit had previously stated that r estitution is a discouraged factor. United States v. Broderson , 67 F.3d 452, 458–59 (2d Cir. 1995). Under Second Circuit law, because Broderson wa s d ec id ed by a prior panel, and Carpenter was not an en banc decision, Broderson is the controlling precedent. See Shattuck v. Hoegl , 523 F.2d 509, 514 n.8 (2d Cir. 1975) (explaining that subsequent panel decisions, “not being an en banc decision, may not be viewed as having overruled our e arlier [panel decision]”). In Akin , the Fifth Circuit merely dealt with restitution as a basis for reduction within the guid

elines, not departure from the guidelines. Akin , 62 F.3d at 702 (concluding that “the district court properly refused to reduce its calculation of loss by the amount of the restitution”). In DeMonte , the Sixth Circuit expressly stated that “we have acknowle dged that restitutionary pay

ments may constitute ‘exceptional circ umstances’ that justify a downward departure.” DeMonte , 25 F. 3d at 3 46 (ci ting United States v. Brewer , 899 F.2d 503, 509 (6th Cir. 1990)). Finally, Flowers

only involved d

efenda nts who re

turned mo

ney they had fra udulently obtained through a check kiting sche me, Flowers , 55 F.3d at 222, not defendants who obtained loans to pay restitution. More funda mentally, Flowers

suffers from the same defect as Carpenter

—it is not binding Sixth Circuit law on this issue because it was simply a panel decision issued after DeMonte

. See United States v. Washington , 127 F.3d 510, 517 (6th Cir. 1997) (“‘The prior decision remains controlling a uthority unless an inconsistent decision of the United States Supreme Court requires modification of the decision or this Court sitting en banc overru les th e prio r decis ion. ’” (quo ting Salmi v. S ec’y of Health an d Human Se

rvs. , 774 F.2d 685, 689 (6th Cir. 1985)). 9 the case different from the ordinary case where the factor is present.” Id. (citatio n omitted). We now join the S econd, T

hird, Fou rth, Sixt h, Seven th, Eight h, and Ninth Circuits and hold that extraordinary restitution is not a prohibited factor. 6 See United Stat

es v. B roderson , 67 F.3d

452, 458–59 ( 2d Cir. 19 95) (aff irming a district c ourt’s d ownwar

d departure based in p art on the d efendant’ s restituti on10

even though i t could be j ustified “ only as a ‘disc ouraged de parture’ ” given tha

t, “[o]rdinarily , paym ent of restitution is not an appropriate basis for downward departur e under Se ction 5K2. 0 because it is adequa tely t aken into a ccount by Guideline s Section 3 E1.1”) ; United Stat es v. Li eberman , 971 F.2 d 989, 996 (3 d Cir. 1992) (affir

ming a district c ourt’s d ownwar d departure on the bas is of the defendant ’s acc eptance o f responsi bility as prim

arily demon strated by

his restitution); United Sta tes v. H airston , 96 F.3d

102, 108 (4t

h Cir. 199 6) (holding that “restitutio n, although taken into a ccount in the guideline permit

ting a reduction for acceptance of responsibility, can provide a basis for a departure when present to such an exceptional degree that it cannot be characterized as typical or ‘usu al’” ( citation om itted)); United Stat

es v. D eMonte , 25 F.3d

343, 346 (6th Cir. 1994) (sta

ting that “

we have a cknowledg ed that re stitutionar y pay ments may constitute ‘exceptional circumstances’ that j ustify a downward departure” (citing United States v. Brewer , 899 F.2 d 503, 509 (6 th Cir. 19 90)); United States v. Bean , 18 F.3d 1367, 1369 (7th Cir. 1994) (“Undoubtedly there a re circum stances th at would j ustify using § 5K2. 0 to [depar

t downwa rd on the ba sis of restitution] beyond [the] two levels [of r eduction provided by § 3E1.1].”); United States v. Oligmueller , 198 F.3 d 669, 672 (8 th Cir. 19 99) (aff irming a district c ourt’s d ownwar

d departure on the bas is of extraordinary restitutio n7 Our conclusion also appears consistent with the law in the First and D.C. Circuits. See

United Sta tes v. Riv

era , 994 F.2d

942, 956 ( 1st Cir. 199 3) (holdi ng that “ ordinary

restitution circumstances . . . do not warrant a downwar d departure,” but stating in dicta that “a special need of a v ic ti m f

or re st it ut io n, an d t he su rr ou nd in g p ra ct ic al it ie s, mi gh t, in an un us ua l c as e, ju st if y a departu re” (c itations om

itted)); see also United States v. Rhodes , 145 F.3d 1375, 1382

–83 (D.C. Cir. 1998) (find ing Hairston ’s rule p ersuasi ve in conc luding that post-c onviction rehabil itation is a discouraged factor). 11 because “[w] e have previously held that cases can fall outside the heartland when there are extraor

dinary efforts at restit

ution” (ci ting United States v. Garlich , 951 F.2d 161, 163 (8th Cir . 1991)); United States v. Miller , 991 F.2 d 552, 553–54 ( 9th Cir. 1993) (holding tha

t district courts may dep art downw ard on the b asis of restitutio n when it ( 1) “s hows acc eptance o f responsi bility, ” (2) “

was substa

ntially greater than that cont emplated by the Commission when draftin g section 3E1.1,” and (3) “ the ma gnitude of t

he depart ure [is] comm

ensuratewith the l evel of the defendant’s acceptance of responsibility”). 7 In particular, we conclude that the Sentencing Comm ission never prohibited the distric t court fr

om con sidering A

ppellees’ extraord

inary restitutio n as a basis for downwardly departing from the sentencing guidelines because we are persuaded

by the Fourth Cir

cuit’s m ode of ana lysis in Hairston , 96 F.3d at 107–08. There, the Fourth Circuit was presented with the question whether extraordi nary restitut ion was a di scouraged or prohib ited facto r. Id. at 107. In Koon , the Supr

eme Court had instructed that “ [i]f t he specia l factor

is a12

discourage d factor, or an enco uraged fa ctor alr eady t aken into a ccount by the applicable Guideline, the court should depart only if the factor is present to an exceptional degree o r in som e other w ay m akes the c ase different from the ordinary case where the fa ctor is present.” Koon , 518 U.S. at 96, 116 S. Ct. a t 2045 (citat

ion omi tted). A

pplying Koon , the Fourth Circuit concluded extraord inary restitutio n was not a

forbidden factor be cause “ [n]ow here in the Guidelines is restitution listed as a proscribed factor.” Hairston , 96 F.3d at 10 7. Likewise, the Fourth Circuit also noted that restitution was not expressly listed as a discour aged or enco uraged fact or for depart ure from the guid elines. Id. Howeve r, the F ourth Circuit recogni zed resti tution was listed as a factor support ing reduc tion with in the gu idelines

. Id. (citing U .S.S. G. § 3E 1.1, cm t. n.1(c) ( 1995)). A ccordingly , this ques tion appear ed to fall through the c racks of the rigid c ategorie s set fort h in Koon because t

he Senten cing Com

missio n did not seem to discourage, prohibit, or encourage departures on the basis of extraordinary restitution. To resolve this dilemma , the Fourth Circuit crafted a new rule: “ When the Com missio n designate s a facto r as a bas is for a reduction within the Guidelines, this implies that the factor is discouraged as a basis for departure from the Guide lines, or

alternat ively, that the f

actor is encouraged

—at least as a basis for reduction—but has already been taken into account.” Id.8 The 1997 s entenci ng gui delines d

irect dis trict cou

rts that “ [i]f the def

endant c learly demonstrates acceptance of re sponsibility for his offense, dec rease the offense level by 2 levels.” U.S.S.G. § 3E1.1(a) (1997). In dete rmining whether the defendant clea rly acc epted responsi bility , Applica

tion Note 1 (c) instr

ucts distr ict cour ts that an a

ppropria te consid eration is whether the defendant made “voluntary payment of re stitution prior to adjudication of guilt.” U.S.S.G. § 3E1.1, cmt. n.1(c) (1997).

9 Two further arguments bear me ntion. First, contrary

to the Government’s contention, Appellees’ compliance with their legal duty to pay restitution before

sentencing under the plea agreement does not transform their re stitution into a prohibited factor. In Hoffer , this Court held that a de fendant ’s acqui escenc e in a civil forfe iture re quiring him to disg orge $ 50,000 of profits from drug trafficking wa s a prohibited factor on which to depart downward. 129 F .3d at 1204. We explicitly decline to extend Hoffer to cases involving restitution as a basis for departure, because Appellees’ restitution required under their plea agreement is not analog ous to mandatory forfeit ure. App ellees voluntari ly sought loans from family members. The plea agree ment did not require them to take this additional action. In short, Appe llees’ voluntary a ctions in obtaining loans were not a prohibited factor under Hoffer because they

do not fall within Hoffer ’s rubric. Second, t he rece nt amendm ent to the

sentenc ing gu

idelines, in light o f the PROTE CT Act, sheds no light on our analy sis. U.S.S.G. app. C, amend. 651, at 347 (2003). Even if the recent amendment now prohibits district courts from departing dow nward on the basis of extraordinary re stitution, see U.S.S.G. § 5K2.0(d)(2) (2003) (prohibiting district courts from departi ng base d on the “d

efenda nt’s acc eptance

of responsibility

”); id. § 5K2.0(d)(5) (prohibiting district c ourts from depart ing base d on the “d

efenda nt’s fulf illment of restitution obliga

tions only to the extent required by law inc luding the guidelines (i.e., a departure may not be based on unexceptional efforts to remedy the harm caused by

the offense)”), our conclusion that extraord inary restitution is merel

y a discoura ged fa ctor unde r the 1997 guideli

nes dispos es of its relevance. Since we already concluded that extraordinary restitution was merely discour aged under the 1997 guidelines, the current amendme nt is a substantive change that cannot be applied retroactively

. See U.S.S.G. § 1 B1.11(b )(2) (1 997); see also United States v. Descent , 292 F.3d 13 We agree with the Fourth Circuit’ s statement of this rule. Like Hairston , we note in the instant cas e that alt hough the 1997 s entencing g uidelines do not list restitut ion as a pro hibited factor for dep arture from the gu idelines , U.S.S.G. § 5H1.1–5H 1.12 (1997) , restit ution is liste d as a fac tor supporting reductio n within the guidelines, U.S.S.G. § 3E 1.1, cmt. n. 1(c) (1997). 8 We therefore conclude that extraordinary restitution is a discouraged factor. 9703, 707–08 (11th Cir. 2002). 14

Still, the Government argues that departures based on restitution paid after adjudica tion of guilt

are prohi bited rath er than dis couraged b ecause th e Sentenc ing Commission has pr ohibite d departu res on the b asis of so cio-econo mic status. U.S.S .G. § 5H 1.10 (1997) . We disagree . On thecontrary , we co nclude extraord inary restitutio n paid after adjudi cation of g uilt is not a forbidden f

actor for two r easons. F irst, if

departures based on extraord inary post-adj udication restitution were forbidden by § 5H1.10, then departures based on extraordinary pre-adjudication restitution would also be forbidden—restitution always involves money , which n ecessar

ily im plicates s ocio-econ omic s tatus. Bu t this distinc tion would be il logical be cause we already held that pr

e-adjud ication re stitution is merely a discouraged factor. Second, distinguishing between defendants who paid restitution before adjudica tion and those

who paid a fter adj udication, ironicall y, w ould violate § 5H1.10’s prohibition of departures based on socio-economic status. If extraord inary restitutio n were a

basis of de

parture a vailable o nly to th ose defendant s who wer

e able to c ollect eno ugh money to pay restitutio n before pleading gui lty, this would di scrim inate against those de fendants w ho were too poor to coll ect enough m oney to pay restitution un til after pleading guilty.15

Significa ntly, although Appellees a re not ric h, they

started pa

ying re stitution before a djudicat

ion by tendering $50, 000 of their life savings with the ir guilty plea, but were f inanciall y unabl e to com

plete their restitu

tion until they obtained a large num

ber of loa ns in the three short m

onths betwe en adjudi cation and sentencing. If Appellees had been rich, they w ould have tendered the entire

amoun t of

the ir re sti tut ion befo re th ey pl ed g uil ty. In short, we ref

use to fol low the Gove rnment’s sugges tion tha t we discrim inate against Appel lees’ s ocio-econ omic s tatus for t he sake of

rem aining neutral with respect to all defendants’ socio-economic status. I nstead, we are persuaded by the comm

ents of the late Senior Circuit Judge Celebrezze: [A] de fendant . . . should

be judged

by his a ctions. T

he fact t hat he may have some econom

ic me ans should ne ither be he ld for him or against him . To sugge st that when a defend ant is aff luent, his attempts at restitution can never qualify as an e xceptional circum stance[] is as repug nant to equal protecti on ideology as to hold the lack of

ability to make rest itution against an indigen t defendan t. It is clear that in some cases, the methods by whi ch a defe ndant make s restituti on may

qualify as an exce

ptional cir

cumst ance, a

bove and bey ond what is considere d in the Gui delines. United Stat

es v. D eMonte , 25 F.3d 343 , 355 (6th Cir. 1994) (C elebrezze, J., concurring in part and dissenting in part). B. Whethe r Appelle es’ Res titution W as Extraord

inary Enoug

h16

Havi ng d ecid ed t hat ext rao rdi nar y pos t-ad judi cati on r est itu tio n is merel y a discourage d, not prohi

bited, fa ctor upon w

hich to depa

rt downw ard, we

proceed t o discuss whe ther Appe llees’ paym ent of re stitution w as extrao rdinary enough to remove it from

the heartland of restitution cases and warrant a downward departure. See Koon , 518 U. S. at 96, 116 S. Ct. at 2045; Hoffer , 129 F.3 d at 1201

. Although thi s is a very

close issue , we co nclude the district c ourt proper ly foun d Appellee s’ pay

ment o f restitu

tion was e xtraordina

ry eno ugh to rem

ove it from

the heartlan d of cases because i t demo nstrated t heir sincere rem

orse and a cceptanc e of resp ons ibi lit y. Instead of creating concrete legal rules with which to determ ine whether particular paym ents of restitution are extraordinary enough to warrant downward departur es, cour

ts have looke d to a wide

range of factors, such as the degree of voluntarine ss, the ef

forts to w hich a def

endant went to ma

ke restitu tion, the percentage of funds restored , the tim ing of the restitution, and wheth er the defendant ’s motive demonstrat es sincere re morse and accept ance of resp onsibil ity. See, e. g. , Oligmueller , 198 F.3 d at 672 (em phasizing timing, voluntarine ss, eff orts at restit ution, and p ercentage of funds restored ); Hairston , 96 F.3d

at 108–09 (emp hasizing the

percentage of funds restored , effor ts at rest itution, vol

untariness , timing , and motive); DeMonte , 25 F.3d at 347 (emphasizing voluntariness);17

Lieberm an , 971 F.2 d at 996 (em phasizing timing a

nd percent age of fun ds restored). We bel ieve this is the pro per inqui ry. Emph asizing the

voluntarine ss, tim

ing, and m

otive of A

ppellees’ restitutio n, the Government argues this case rem ains within the heartland because Appellees did not pay restitution until after they had been crim inally indicted, as part of a negotiat ed plea agre ement, and in th e hope of rece iving a red uced sent ence. Appellee s, on the ot

her hand, empha size their restitutio nary e fforts, percentage of funds rest ored, an d their sinc ere rem orse, an d suggest fou

r factor s that rem

ove this case from the

heartlan d. First , Appell ees perso nally b enefitte d from only ab out two-thirds of the loss $268,037.18 loss, yet they provided restitution for the entire loss caused

by the fraud. Second, they c ame up with this money by liqui dating three-f ourths of th eir life

savings and o btaining nea rly $20 0,000 in loa

ns from friends a nd family. Third, Mrs. Kim pass ed a lie de tector te st and woul d not have pled guilty

to her m isdem eanor cha

rge and bor

rowed ne arly $200,000 exc ept to show her e xtrem e remorse. F ourth, A ppellees be gan ma

king restit

ution on the

same day they we re adju dicated gui lty and paid the re st before

sentencing . Fifth, Appellees’ reason for m aking restitution was their sincere remorse. Compa ring the G overnm ent’s f

actors to A

ppellee’ s factors , the Governm ent’s f actors ar e less signi ficant tha

n Appelle es’ fa ctors. We agree with18

the Government that the timing of Appellees’ paym ent—specifically, their failure to pay restitution before criminal indictm ent, and only pursuant to a negotiated plea agre emen

t—cuts against the volun tariness o f their a ct and m ilitates against granting a downwar

d departure. How ever, w e see no ne ed to draw a bright line rule that l imits departur es based on extraord inary restitutio n to those de fendants who paid restitution before indictment and not pursuant to a plea agreement. S uch a rule w ould im

perm issibly

favor ec onomic ally pr

ivileged de fendants w

ho have readily available funds. A dditionally , the distr ict court a

lready rejec ted the Government’s fac tual argument that Appellees’ m otive was to receive a reduced motive. After c onsidering the evidence before it, the district court concluded that Appellee s were m

otivated by

rem orse and “

the em barrassm ent, the h umilia tion, the shame, the sor

row” the y felt about their actions. We ca nnot find tha

t the district c ourt was c learly

erroneou s when it m

ade this factual find

ing. Instead, Appellee s’ fac tors are more significa nt and bala

nce in fav or of granting a departur e from the guidelines. Fir st, Appe llees paid roughly 140 percent o f the am

ount from which the y pers onally

benefitte d. Even t

hough Appellee s had agre ed to pay restitutio n for the w

hole amount of the f

raud in the ir plea agreement, the fa ct that they made and carried out their comm itment to pay back money they never recei ved simply demonstrat es their ex traordina ry remorse.19

Second, like the district court, we are im pressed at the lengths to which Appellees went in obt aining the m

oney to make

restitutio n. Appel lees dipped significa ntly into their l ife saving s and volunta rily u ndertook an

enorm ous am ount of debt, to wit, almost $2 00,000. T

hird, Mr s. Kim

particula rly w ent out of her way

to demons trate her

rem orse beca

use, despi te passing a

lie detec tor test a

nd pleading guilty to a mi sdeme anor char ge, she so licited he r relatives to secu re enorm ous loans to pay

off her r estitution ob ligation. Fourth, A ppellees also began pa

ying what the y cou ld b y liq uid ati ng $ 50, 000 of t hei r li fe sa vin gs w hen the y ple d gu ilt y, and then paid the balance of their restitution obligation three short months later at sentencing. Finally, it is significant that the district court found as a fact that Appellee s’ rea son for making restitution wa s their sinc ere rem orse. S imply

put, Appellee s are therare de fendants w ho dem onstrated their extr aordinar y rem orse and acce ptance of responsibil ity by

makin g extraor

dinary restitutio n. IV. CONCLUSION For the f oregoing re asons, ext

raordina ry re stitution, whether

paid befor

e or after adjudi cation, is merely a discouraged factor on whi ch to depa rt downward. Furtherm ore, the district c ourt proper

ly foun d that Appe llees’ paym ent of restitutio n was extr

aordinar y enough to remove this ca se from the heart land and20

justify a downwa

rd depart ure beca use it dem

onstrated Appellee s’ sincere rem orse and acce pta nce of re spo nsi bil ity. AFFIRMED.21

NANG LE, D istrict Jud

ge, conc urring: I concur in the opinion in this case because t he Panel v ery c arefully

finds that “ extraord

inary restitutio n” is m erely

a “di scouraged” and not a “ prohibited” factor. Additionally, the Panel corr ectly finds that the District Court’s findings are subject to the clea

rly e rroneous r

ule. I w rite only to em phasize the

closeness of the quest ion and t he narrow and limited basis for the affirmance h erein. As stated in the opinion and as reflected in the facts before the District Court, the remorse of the defendants wa s truly “extra ordinary.” Indeed, in m ore th an 3 0 yea rs a s a d is tri ct j ud ge, I ha ve n eve r pa rti cip ate d i n, o r ha d b rou gh t to my attention, any previous case in which a defendant’s restitution justified a departure downwar d. This 30 -yea

r period in cluded ca ses occur ring well before t he Sentencing Guidelin es were adopted (w

herein a d efendant’ s restituti on could arguably have support ed a lesser s entence). The Pane l confirm s the four f actors tha t support the

Distric t Court’ s finding that the de fendants w ere motivated by rem orse. I t should also b e noted tha t the defendant s had no assur

ance that their re stitution ef

forts would be rew arded by the District Court at sentencing, since the government clearly indicated in the plea agreement that i t would op pose such a downward de parture.22

The distr ict judge had the oppor

tunity t o assess, face-t o-face, the Kim s’ remorse in making full restitution. Based upon the totality of the circumstances and t he pre sence of fact ors in dicat ive o f the Ki ms’ remorse, the Di stric t Cou rt’s finding re garding ext

raordina ry re stitution is n ot clearl y err oneous.