NOT RECOMMENDED F OR F ULL-TEXT PUBLICATION File Na me: 12a1126n.06 Nos. 10-3773, 11-3523 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT

UNI TED STATES OF AMERI CA, ) ) Plaintiff-Appellee , ) ON APPEALFROM THE U NI TED ) STATES DI STRI CT COURT FOR THE v ) SOUTHERN DI STRI CT OF OH I O ) ROBERT L . SCHW ARTZ , ) ) Def endant- Appellant. )

Before: CLAY and WHITE , Circuit Judges; and HO OD, District Judge. * HOOD, District J udg e. Def endant- Appellant Robert Schwar tz appea ls from the district court’s forf

eiture money judgme nt and from the district court’s order enfor cing a writ of g arnishment to satisfy the restitution order ed in the judgme nt. Schwar tz argues that the district court err ed when it order ed en forcement of a writ of g arnishment over his objections beca use it allowed the g overnme nt to collect on restitution that was not, in his ey es, y et due and owing

. Be ca u s e t h e lang uag e in the judgme nt allowed for a sum cer tain of restitution to be due immediately , there is no merit to his argument. Schwar tz also argues that the district court err ed when it enter ed a final order of forf eiture without enter ing a preliminary order of forf eiture as require d by Fe d. R. Crim. P. 32.2. Any err or was, howeve r, harmless beca use the final single -stag e forf eiture proce eding provided all the proc ess due to Schwa rtz with respect to for feiture by Fe d. R. Crim. P . 32.2.

The Honora

ble J oseph M. Hood, United States District J udg e for the Easter n District of Kentucky , * sitti ng by desig nation.Acc ording ly , we AF F IRM the decision of the district court with respe ct to the enfor ceme nt

of the wr it of g arnishment and the forf eiture judg ment. I. Schwar tz was char g ed in May 2009 in an I nformation with one count of mail fra ud and one count of filing a false fede ral income tax return. (R. 1, I n formation.) I n the I nformation, the g overnme nt also g ave Schwar tz notice of its intent to seek a forf eiture money j u d g ment of $2,492,469, the amount of Schwar tz’s fra udulent proce eds, as well as its intent to forf eit a list of rea l proper ties that constitute or that wer e derive d from proce eds trac eable to Schwar tz’s mail fra

ud, up to a value of

$2,492,469. (I d.) I n J une 2009, Schwar

tz pleade d g uilty , pursuant to a plea ag ree ment, to both the mail fra ud and tax felo n y v i o l at ions as char g ed in the I nformation. (R. 2, Plea Ag ree ment; R. 19, Chang e of Plea Tr.) I n t h e p l ea agr ee ment, Schwar tz ag ree d that the fra

ud loss was $2,492,469 and that the mandatory restitution to the Hada ssah Hospital would be in that amount. (R. 19, Chang e of Plea Tr., pp. 24-26.) The plea wa s silent as to forfe iture. At his sentenc ing hear ing, Schwar tz admitted that the statement of fac ts in support of his g uilty plea was true and acc urate

. Schwar tz was an attorney in Cincinnati who, in 2003, was g iven power of attorney to handle the financ ial aff airs of his wea lthy and elder ly friend and client, Be verly Her sh. (I d., pp. 32, 37.) Schwa rtz prepa red severa l codicils to her will and also dra fted thre e trust ag ree ments. Upon Ms. Her sh’s death, h er es t ate was to be distributed as follows: 20 perc ent to Hada ssah Hospital; 30 perc ent to the Her sh Charitable Trust; and 50 perc ent to the Her sh Revoca ble Trust. (I d.) Ms. Her sh died in 2005 and Schwar tz was named executor of her estate. (I d., p. 33.) I n 2006, Schwar

tz filed estate- tax returns indicating that Hada ssah Hospital was to rec eive $2,502,469,

2that the Hersh Charitable Trust was to rec eive $3,756,703, an d t h e Hersh Revoca ble Trust was to

rec eive $6,261,172 from Ms. Her sh’s estate. (I d.) Howeve r, Schwar tz never advised the Hada ssah Hospital of the exten t o f M s. Her sh’s g ift and only made three distributions to Hada ssah totaling $210,000. (I d., pp. 34-35.) Schwar tz fra udulently distributed over $9 milli on thro u gh t h e Her sh Revoca ble Trust, most of which went to Schwar tz, which he used for persona l expenditures and asset purcha ses for f

amily members, e mploy ees, f

riends and c lose associates. (I d., p. 34.) Whil e no preliminary order of forf eiture was ever reque sted or enter ed, on J une 7, 2010, the day befor e Schwa

rtz’s sentencing , the g overnme nt filed a motion for a forf eiture money judgme nt in the amount of $2,492,469 pursuant to Rule 32.2(b)( 1)(A) and (c) (1) and disavowed any intention to seek forf

eiture of the five (5) parc els of rea l proper ty ref ere nced in the Information. (R. 41, Motion for Money J udg ment.) On J une 8, 2010, the district court sentenc ed Schwar tz to 48 months in prison, followed by three y ear s of supervised rele ase. (R. 43, J udg ment.) The district court order ed that Schwar

tz pay a $10,000 fine and $3,227,686 in restitution, as follows: $2,292,469 to Hada ssah, due immediately , and $935,217 to the I nterna l Revenue Service , due upon Schwar tz’s rel ease to supervision. (I d., pp. 5-6; R. 51, Sentencing T r. , pp. 49-50.) The district court order ed that, if Schwar tz was working in a non-UNI COR or g rade 5 UNI COR job while incar cer ated, he would have to pay $25 per quarte r toward restitution, and that, if Schwar tz was working in a g rade 1-4 UNI COR job while incar cer ated, he would have to pa y 50 perc ent of his monthly pay toward restitution. ( R. 43, J udg ment, p. 6, R. 51, Sentencing Tr., p 50.) The district court a lso ordere d that, “[u] nless the court has expressly order ed otherwise

. . . [,] pay ment of criminal monetary penalties is due during imprisonment.” (R. 43, J udg ment, p. 6, R. 51, Sentencing Tr., p 49.)

3Wit h respe ct to the motion for forf eiture, Schw artz’s counsel initially stated t hat S chwa

rtz had ag ree d to the forf

eiture an d defe rre d to the g overnme nt on how it wanted to proce ed on the forf eiture at the sentenc ing. (I d.) However, Schwartz’s counsel then objected to the gover nment’s motion for a forf

eiture money judgme nt based on Schwar tz’s conce rn that it might adver sely aff ect the ability of Hada ssah to rec eive full restitution. (I d., pp. 58-59.) Schwar tz’s counsel also objected

on the g rounds that the g overnme nt’s motion for a forf eiture money judgme nt was not made part of the plea ag ree ment and that there had not been a preliminary order of forf eiture, as require d by Rule 32. 2 , Fe d er al Rules of Criminal Procedur e. (I d., pp. 59-60.) The g overnme nt responde d that a preliminary order of forf

eiture under Rule 32.2 was not require d wher e the g overnm en t wa s o n l y

s ee k i n g a forf

eiture money judgme nt. (I d., p. 60.) The district court then order ed a $2,492,46 9 forf eiture money judgme nt ag ainst Schwar tz. (I d., p. 61.) Schwar

tz filed a timely Notice of Appea l on J une 22, 2010. (R. 45, Notice of Appe al.) I n October 2010, the gover nment filed an a

pplication for a

writ of gar

nishment direc ted t o Foundation Ba

nk, pursuant to 28 U.S.C. § 3 2 0 5 (a), on the g rounds that Schwar tz had an unpaid judgme nt debt of restitution order ed by the district court and that Foundation Ba nk was in possession and control of funds owned by Schwar tz that the g overnme nt soug ht to apply toward satisfac tion of that judgme nt debt of re s t i tution. (R. 59, Application for Writ of Garnishment.) The district court g rante d the writ. (R. 60, Orde r for Writ of Gar nishment; R. 61, Writ of Gar nishmen t

. ) Fo l l o wi ng Schwar tz’s objection, full briefing , and a hear ing on t h e i s s ue, the mag istrate judge repor ted and

rec ommended to the di strict court that the W rit of Garnishment be enforce d on J an u ar y 14, 2011. (R

. 88, Gar

nishment Hea

ring Tr.) The dist rict court enter ed an order on April 21, 2011, adopting the m ag istrate judge ’s Report and Recommendation, overr uling Schwar

tz’s objection to the

4rec omme n d at i o n , an d order ing that the Writ be enfor ced. (R. 82, Orde r). This timely appea l

followed. II. Schwar tz argues that the writ of g arnishment was improperly enfor ced beca use, based on 18 U.S.C. § 3612(c) , the g overnme nt may only collect unpai d re s t i t u t i on. He rea sons that the full amount is not y et due beca use he is making periodic pay ments toward his restitution as set forth in the judgme nt and, thus, the g overnme nt has no basis to g arnish Schwar tz’s I RA accounts held by Foundation Ba

nk. Howeve r, Schwar

tz ignor es that the judgme nt pro v ides that “[Schwartz] shall pay ... restitution of $2,292,469, which shall be due immediately .” [R

. 43, J udg ment, p. 6]. Whil e the judgme nt pr ovides for periodic pay ments to be applied to his monetary obligation e ach quarte r while Schwar

tz is employ ed during his incar cer ation, the exis tence of the pay ment schedule does not chang e the fac t that $2,292 , 4 6 9 in restitution to Hada ssah was immediately due upon entry of judgme nt. T h e d i s trict court may order that the defe ndant pay the entire amount of restitution i n o n e lump sum or i n partial pay ments set forth in a pay

ment schedule

. 18 U.S.C. § 3612(c)

. Her e, the majority of the restitution order ed , $ 2 , 2 9 2 , 469, was due immediately upon sentenc ing, with a smaller amount due to the I RS at a later date. Beca use S chwa

rtz did not pay that portion of t he restituti on due to Hada ssah at the time the judgme nt was imposed, that amount beca me an unpaid debt that the g overnme nt could seek to collect immediately by all available and rea sonable means. 18 U.S .C. §§ 3612, 3613; 18 U.S.C. § 3664(m)(1) (A)( ii); 28 U.S.C. § 3205(a) ; United St ates v. Mill er , 588 F. Supp. 2d 789, 795–96 (W.D. Mich. 2008). Acc ording ly , we AF F IRM the district court’s or der e nforc ing the writ of g arnishment.

5III.

Schwar tz complains that he was surprised when he received the United S tates’ moti on for entry of a final order because there had never been a request for o r entry of a preliminary order of forf eiture in the matter and beca use the pl ea ag ree ment addre ssed restitution but not forf eiture. Be cause forf

eiture had not been addre ssed by these means ear lier, he believed that the United States had abandone d forf

eiture. He a

rgues that he w as har

med by the omission of the preliminary order of for feiture beca

use he w as unable to “ rese arc h the applicable law and respond” and did not have

an opportunity to “neg otiate a lesser amount as part of the Plea Ag ree ment” since he did not rea liz e that forf eiture would still be an issue at t he concl u s i o n o f t h e m att er. Schwar tz fails, however, to articulate any specific objections or arguments based on the law that he would have prese nted ag ainst the awa rd or a mount of forfe iture if he ha d been g iven an e arlier opportunity

to do so. A. As a threshold matter, Schwar tz sug g ests that the district court err ed in enter ing the forf eiture money judgme nt beca

use it was not provided for in the plea ag ree ment. His argument rests, howeve r, solely on case law in which this Cou rt fo u n d that a district court err ed when it failed to enter a judgme nt of forf

eiture in keeping with an element of the parties’ plea ag ree ment, which the court had acc epted. See United States v. Skidmore , 998 F.2d 372, 376 (6th Cir. 1993) (holding that specific perf

ormanc e of the plea agree ment was appropr iate reme dy wher e the district court had brea ched it by ex ci s i n g a key provision of the ag ree ment conce rning forf eiture)

. Schwar

tz’s plea ag ree ment included no promise by the gover nment to exclude or di smiss the forfei t u re co u nt, nor was ther e any ag ree ment as to what sentenc e the Court mig ht impose. For feiture is an eleme nt of

6the sentenc e. As a result, Schwar tz can hardly complain on these g rounds, and his relianc e on Skidmore is inapposite at best. B. Nex t, Schwar

tz arg ues that the forf

eiture provision contained in the judgme nt should be

vacated beca

use a preliminary order of forf eiture was never enter ed by the district court as require d by Fe d. R. Crim. P. 32.2. Rule 32.2 provides that “[ i ] f t h e co urt finds that proper ty is subject to forf eiture, i t must promptly enter a preliminary order of forf eiture setting forth the amount of any money j udg ment, direc ting the forf eiture of specific proper

ty , and direc ting the forf

eiture of any substitut e proper

ty if the g overnme nt has met the statutory criter ia.” Fe d. R. Crim. P. 32.2(b)( 2)(A) (empha sis added)

. Wit h respe ct to timing, the district court must enter the preliminary order , unless impractica l to do so, “suff iciently in advanc e of sentenc ing to allow the parties to sug g est revisions

o r m o d ifications befor e the order become s final,” which occur s at sentenc ing. Fe d. R. Crim

. P

. 32.2(b)( 2)(B ), 32.2(b)( 4)(A)

. Thus, the district court err ed by failing to enter a preliminary forf eiture order . Havingconsidere d the mag nitude of that er ror in the contextof this case , we c onclude that it was harmless. Whil e the failure to enter a preliminary order befor e sentenc ing and judgme nt, i.e., in a timely fashion per Rule 32.2, does n o t d eprive the district court of authority to enter a final order of forf eiture, see United States v. Martin , 662 F.3d 301, 308 (4th Cir. 2011), cert. denied __ S. Ct. __, 2012 WL 950228 (April 16, 2012) (quoting Dolan v. United States , ___ U.S. ___, 130 S. Ct. 2533 (2010)) , “‘[p]rocedura l due proce ss require s t hat an individual rec eive adequate notice and proce dures to co n t es t the deprivation of property rig hts’ that result from criminal forfeiture under 21 U.S.C. § 853.” United States v. Shakur , 691 F.3d 979, 988 (8th Cir. 2012) (quoting United States

7v. Smith , 656 F.3d 821, 827 (8th Cir. 2011) , cert. denied , ––– U.S. ––––, 132 S. Ct. 1586 (2012))

.

Thus, with respec t to tim ing, the district c ourt should e nter a preliminary order , unless impractica l to do so, “suff

iciently in advanc e of sentenc ing to allow the parties to sug g est revisions or modifications befor e the order become s final,” which occur s at sentenc i n g. Fe d

. R

. Crim. P. 32.2(b)( 2)(B ), 32.2(b)( 4)(A)

. Howeve r, a “pre liminary ” order of forf eiture is final as to a criminal defe ndant’s rig hts in the items or amounts to be forf eited. See Fe d. R. Crim. P. 32.2(c) (2) (“When [any ] ancillar

y proce eding ends, the court must enter a final order of forf eiture by amending the preliminary

order as nec essar

y to acc ount f

or any third-par

ty rig hts. I f no third party files a timely petition, the preliminary order become s the final order of forf eiture if the cou rt fi nds that the d efe ndant .

. . had an interest in the property that is forf eitable under t he applicable st at u t e. ”) ; s ee United States v. Gross , 213 F.3d 599, 600 (11th Cir. 2000) (holdin g t h at the preliminary order of forf eiture was final and appea lable beca use the preliminary order finally deter mined the defe ndant’s rig hts in the forf

eited proper

ty). I t is that preliminary order which invites third parties to make claims of interest with respe ct to the item or items to be forf eited in proce eding s consistent with Fe d. R. Crim. P. 32.2(c)

. Thus, it matters not whether the motion for and the order enter ed by the district court in this case wer e styled “pre liminary ” or “fina l” beca use the eff

ect was the same for Schwar tz. Hi s interest in the proper ty could be adjudicate d with all due proce ss by virtue of the s i n gl e proce eding which was conclude d with a final order of forf eiture, assuming he did rec eive notice and an opportunity

to be hea rd duringthat proce eding

. Schwar tz offe rs nothing to establish that he was denied adequate proce dural due proce ss—notice and the opportunity to be hear d—in this situation, even thoug h he argues that he was surprised when he rec eived the United States’ motion for entry of a final order beca

use he thought

8that the United S tates had decide d not to pursue the claim of forf eiture a g ainst him in t he abse nce of a preliminary order of forf eiture. That surprise, howeve r, does not rise to the level of a constitutional wrong . Nor has Schwar tz provided this Court with any specific , colora ble objections that he would have made to a preliminary order of forfeiture had it been soug ht or enter ed or w ith respe ct to the final order of forf eiture if more time had been available to him, nor has he denied that the forf eiture amount order ed was equal to the amount of loss cause d by his fra ud. Moreove r, in its

own revie w, this Court has not unear thed any prejudice to Schwar tz cause d by the prosec ution and the district court’s f

ailure. On the whole, Schwar

tz rec eived all of the proce ss require d in this instance

. Schwar tz had notice of the g overnme nt’s intent to seek forf eiture by virtue of the forf eiture provision in the I nformation lodge d ag ainst him. See 18 U.S.C. § 981(a) (1)( C); 28 U.S.C. § 2461(c)

. Schwar tz does not deny that he was on notice of what amount would be subject to for feiture , that he re ceive d the motion for entry of a final o rder of forf eiture in advanc e of the hear ing on the matter, or that the district court provided him with an opp o rt unity to make objections to the fac t and amount of fo rf eiture at the sentenc ing hear ing. As require d by Rule 32.2, the district court deter mi n ed t h e amount of money that Schwar tz was required to pay by ref ere ncing items in evidence , such as the written plea ag ree ment. Fe d. R. Crim. P. 32.2(b)( 1)(A) , (b)( 1)(B ). He does not deny that the United States offe red and the di strict court relied upon adequate factual support for a for feiture judgme nt in the amount of $2,492,469, the amount of the forf eiture awa

rded, or that he alre ady ag ree d in the plea a g ree ment that said amount was the amount of actual loss c aused by his f raud in de termining restitution. See United States v. Riddell , 329 F. App’x 328, 329 (6th Cir. 2009) (citing United States

v. Simpson , 538 F.3d 459, 465–66 (6th Cir. 2008), and United States v. Finkley , 324 F.3d 401, 404

9(6th Cir. 2003)) (re cognizi ng that a d i s trict court “must base its order of restitution on actua l

losses.”); (R. 2, Plea Ag ree ment, ¶10 and Statement of Fa cts; R. 19, Chang e of Plea Tr., pp. 32–37). Thus, any err or i n failing to enter a preliminary

order of for feiture in this m atter is har mless. Fed. R. C ri m . P

. 5 2(a) (stating that “[a]ny err or, defe ct, irregularity , or varia nce that does not aff

ect substantial rig hts” is harmless er ror a nd “must be disreg arde d”). Whil e not articulated in his briefs, at oral argument and in a subsequent supplemental letter of authority filed pursuant to Fe d. R. App. P. 28(j), Schwar tz hints that, if g iven the opportunity below, he would argue that the district court could not order both forf eiture and restitution. To the extent that Schwar

tz makes this a

rg ument, we do not f

ind it persua sive. Whil e not addre ssing this question direc tly , this Court has discussed the differ ent purposes of restitution and forf eiture, which

are not mutually

exclusive,

. . . [f] orfe iture and restitution are distinct reme dies. Restituti on is reme dial in nature , and its g oal is to restore the victim’s loss. For feiture , in contra st, is punitive; it seeks to disgor g e any profits that the offe nder rea liz ed from his illega l activity

. Given their distinct nature and goals, restituti on is calc ulated based on the vi ctim’ s l o s s , while forf eiture is base d on the offe nder’ s g ain. United St ates v. Boring , 557 F.3d 707, 714 (6th Cir. 2009) (quoting United St ates v. W ebber , 536 F.3d 584, 602–03 (7th Cir. 2008)); see also United States v. Dierke r , 417 F. App’x 515, 523–25 (6th Cir. 2011) (dec iding that both forf eiture and restitution wer e corr ectly deter mined). Other circ uit courts that have addre ssed this issue have overw helmingly deter mined that a district court may order restitution and forf

eiture, and that both are often mandatory

. United States v. Kalish , 626 F.3d 165, 1 6 9 (2d Cir. 2010) (“We see no infirmity in the

. . . imposit ion of both a forf eiture reme dy and a restitution reme dy

. These reme dies are authorized by separ ate statutes, and their simult aneous imposit ion offends no c onstitut ional provision.”); United States v. Alalade , 204 F.3d 536, 539–41

10(4th Cir. 2000); United States v. Taylor , 582 F.3d 558, 567 (5th Cir. 2009) ; United States v. Leahy ,

464 F.3d 773, 793 n.8 (7th Cir. 2006) (“While we rec og nize to the untrained ey e, this might appea r to be a ‘double dip,’ restitution and forf eiture serve di ff

er en t g oals, and we have approve d of [ordering both restitution and forf eiture] i n t h e p as t .”); United States v. Newman , 659 F.3d 1235, 1241 (9th Cir. 2011); United States v. McG inty , 610 F.3d 1242, 1247 (10th Cir. 2010); United States v. Browne , 505 F.3d 1229, 1280- 81 (11th Cir. 2007). To be clea

r, this Court does not condone the fa ilure to se ek or enter a preliminary order of for fe i t u re . Howeve r, in this limit ed instance, wher e the United States soug ht a money judgme nt forf eiture, Sch wa rt z had agr eed to the amount of fraud l oss in the pl ea ag ree ment, and the district

co u rt provided a hear ing, at which the g overnme nt fac tually supported its motion for forf eiture judgme nt and Schwar

tz had an opportunity to object, the absenc e of a preliminary order of forf eiture did not affe ct Schwar

tz’s subst antial rig hts, and the district court’ s err or wa s harmless. Acc ording ly , we AF F IRM the judg ment of the district cour t with respec t to forfe iture. IV. For the fore g oing r easons, we AF F IRM the district court’s judg ment and orde r.

11