IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 15-10555

UNITED STATES OF AMERICA, 

 Plaintiff - Appellee

v.

DOYLE BRENT SHEETS, 

 Defendant - Appellant

ELIZABETH SHEETS; JORDAN PAIGE SHEETS; KRISTIN WHITNEY 

SHEETS; TATUM ELIZABETH SHEETS, 

 Appellants

Appeal from the United States District Court

for the Northern District of Texas

Before STEWART, Chief Judge, and REAVLEY, and DAVIS, Circuit Judges.

CARL E. STEWART, Chief Judge:

Defendant-Appellant Doyle Brent Sheets (“Sheets”) pleaded guilty to an 

offense related to a scheme to defraud the United States Department of 

Education (“DOE”). The district court ordered each defendant involved in the 

scheme to pay restitution in various amounts. When the district court 

indicated that it intended to return certain garnished funds to Michael Otto

(“Otto”), one of Sheets’ co-defendants, the Government requested that Otto’s 

garnished funds be applied to the overall outstanding restitution obligation.

United States Court of Appeals

Fifth Circuit

FILED

February 10, 2016

Lyle W. Cayce

Clerk

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The district court denied the Government’s request and returned the garnished 

funds to Otto. Sheets appeals the district court’s denial of the Government’s 

proposed application of restitution payments. We REVERSE.

I. BACKGROUND

Sheets, the former president of American Commercial Colleges, Inc. 

(“ACC”), was convicted of misprision of a felony in violation of 18 U.S.C. § 4 for 

concealing knowledge of ACC’s theft of government funds in violation of 18 

U.S.C. § 641.1

A.

Beginning in 2005, ACC, on behalf of its students, submitted hundreds 

of claims to the DOE for Federal Student Aid (“FSA”) program funds and 

received millions of dollars in student loans and grants. The DOE is charged 

with the responsibility of operating, administering, and regulating the various 

FSA programs throughout the country. Students who are eligible for financial 

assistance may apply for assistance in the form of grants and loans to pursue 

post-secondary education. Once a student is deemed eligible for aid, an 

educational institution may use the student’s FSA program funds to cover 

tuition and fees for the academic year. Under Title IV of the Higher Education 

Act of 1965, as amended, institutions like ACC are required to derive at least 

10 percent of their revenues from sources other than FSA program funds (the 

“90/10 Rule”).2 In 2007 and earlier, if a school did not meet the 90/10 Rule, it 

 

1 ACC, a proprietary institution, pleaded guilty to the theft of government funds in 

violation of 18 U.S.C. § 641 for its misuse and conversion of fraudulently obtained federal 

student loan and grant funds while Sheets was ACC’s President. As a corporation, ACC acted 

by and through its employees, who are co-defendants in related cases: Sheets, Otto, Bruce 

Alan Reed, Brenda Richardson, Trecia McNelly, and Mary Angelyn Summers. Merrill Lynch, 

Pierce, Fenner & Smith, Inc. serves as the garnishee in this case. 

2 Congress enacted the 90/10 Rule to address perceived issues of widespread fraud by 

proprietary schools. See 138 Cong. Rec. E. 2152 (July 9, 1992) (statement of Rep. Ballenger). 

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was automatically ineligible to receive FSA program funds during the next 

fiscal year. In 2008, during the reauthorization process, the penalty for a 

school’s failure to meet the 90/10 Rule was revised so that a noncompliant 

institution’s eligibility to participate in the FSA programs became provisional 

for the next two years. Any failure to meet the 90/10 Rule thereafter resulted 

in the automatic termination of funds.

In 2010, an investigation revealed that ACC continuously 

misrepresented its 90/10 Rule compliance to the DOE by constructing a 

fraudulent scheme in order to mischaracterize the actual portion of funds each 

of its campuses received as FSA versus non-FSA program funds. Had ACC not 

misrepresented that it was compliant with the 90/10 Rule, it would have been 

ineligible for FSA program funds from fiscal year 2006 until fiscal year 2010.

B.

In separate proceedings, Sheets and his co-defendants were convicted 

and sentenced for their involvement in the scheme. Each was ordered to 

immediately pay the following to the DOE, jointly and severally:

Defendant Sentencing 

Date

Special 

Assessment

Fine Restitution

ACC Oct. 2, 2014 $400 $1,200,000 $972,794.70

Sheets Oct. 2, 2014 $100 $5,000 $972,794.70

Otto Sept. 19, 2014 $100 $5,000 $66,606.48

Reed Sept. 19, 2014 $100 $5,000 $66,606.48

Richardson Oct. 9, 2014 $25 $1,000 $87.02

McNelly Sept. 23, 2014 $25 $1,000 $87.02

Summers Sept. 23, 2014 $25 $1,000 $87.02

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The Presentence Investigation Reports (“PSR”) in Otto’s case and in 

Reed’s case attributed the $66,606.48 loss to the same conduct, with neither 

party making objections to the PSRs. 

In November 2014, following sentencing, the Government applied for a 

writ of garnishment for substantial nonexempt property belonging to Sheets, 

Otto, and Reed. On November 24, 2014, the district court ordered that writs 

of garnishment be issued to recover $50,969.46 from each of Otto and Reed’s 

retirement funds, and $957,257.68 from Sheets’ investment accounts. 

The Government filed a Final Order of Garnishment seeking to obtain 

funds from the defendants. In addition, on February 5, 2015, the Government 

filed a Motion for Order Regarding Application of Payment (the “Restitution 

Motion”), describing the proposed collection of restitution under the Mandatory 

Victim Restitution Act (“MVRA”)3 and confirming that payments would not 

end until either a defendant paid to the upper limit of the liability established 

by the court or the DOE was fully compensated.4 On February 6, 2015, the 

district court granted the Government’s Restitution Motion.5 The court noted 

that because judgments for Reed, Richardson, McNelly, and Summers were 

already satisfied, any receipts from garnishment in the Otto case would be 

applied to satisfy Otto’s fine ($5,000), and then applied toward the joint and 

 

3 The MVRA authorizes a court to order restitution to a person directly and 

proximately harmed as a result of the commission of a defendant’s offense. See 18 U.S.C. § 

3363A(a)(2). 

4 As counsel for Sheets notes, the Government’s Restitution Motion appears to have 

been filed only in the ACC, Otto, and Reed cases, presumably by accident, as the order 

granting the motion (as well as the later order vacating it) was filed in each of the seven 

cases.

5 Through garnishment proceedings, the Government obtained payment of Reed’s 

$100.00 mandatory special assessment, $5,000.00 fine, and $66,606.48 in restitution. See 

Satisfaction and Release of Judgment filed Feb. 9, 2015, in Criminal No. 5:14-CR-082-01-C, 

United States v. Bruce Alan Reed.

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several restitution imposed on ACC ($972,794.70). The Otto payment would 

therefore not count as an overpayment and would help to diminish any 

remaining payment required by Sheets and ACC.

On February 24, 2015, and acting sua sponte, the district court vacated 

its prior order and denied the Government’s Restitution Motion. The court 

ordered that instead of applying payments received on behalf of Otto to the 

joint and several liability of ACC, it would return the garnished funds to Otto’s 

garnishee. The court also ordered the Government to show cause as to why 

funds garnished should not be returned to the garnishee.

On March 24, 2015, in the case solely involving Otto, the district court 

ordered that any funds held for the benefit of Otto and subsequently garnished 

beyond the amount owed as a fine by him, were to be returned to the garnishee, 

instead of applied to the overall restitution sum remaining for all defendants. 

Sheets and his intervening family members timely appealed.

The main issue on appeal is whether the district court erred in denying 

the Government’s Restitution Motion, thereby failing to apply the restitution 

sum garnished from Otto against the total loss suffered by the DOE. 

II. STANDARD OF REVIEW

In reviewing an order of restitution, if the restitution was imposed in 

violation of the MVRA, it is illegal, and the proper standard of review is de 

novo. See United States v. Maturin, 488 F.3d 657, 659 (5th Cir. 2007) (citing 

United States v. Adams, 363 F.3d 363, 365 (5th Cir. 2004)). Once we have 

determined that an award of restitution is permitted by the appropriate law, 

we review the propriety of a particular award for an abuse of discretion. 

Adams, 363 F.3d at 365. 

In the alternative, where the defendant has failed to object to either the 

amount of restitution recommended in the pre-sentence investigation report or 

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the district court’s restitution order, thereby denying the court the opportunity 

to identify and correct any errors, we review for plain error. See Maturin, 488 

F.3d at 660. Under the plain error standard, we will correct an error in the 

district court proceeding only if the error was (1) “clear” or “obvious,” and (2) 

affected the substantial rights of the defendant. Id. Where both elements are 

established, we may exercise our discretion to notice a forfeited error, but only 

if the error “seriously affects the fairness, integrity or public reputation of the 

judicial proceedings.” Johnson v. United States, 520 U.S. 461, 467 (1997)

(internal quotation marks omitted). A restitution order that fails to comply 

with statutory requirements, such as a failure to properly apply the restitution 

provisions of the MVRA, may constitute plain error. See, e.g., United States v. 

Ollison, 555 F.3d 152, 164 (5th Cir. 2009); United States v. Trigg, 119 F.3d 493, 

501 n.7 (7th Cir. 1997).

III. DISCUSSION

Sheets challenges the district court’s denial of the Government’s 

Restitution Motion. He argues that the district court committed error in failing 

to apply the restitution sum garnished from Otto against the total loss suffered 

by the DOE.

A victim of a crime has “[t]he right to full and timely restitution as 

provided in law.” See 18 U.S.C. § 3771(a)(6). Under the MVRA, the United 

States may collect restitution owed to victims of criminal offenses. See 18 

U.S.C. § 3664(f)(1)(A); United States v. Phillips, 303 F.3d 548, 550–51 (5th Cir. 

2002). Congress directed the Attorney General to aggressively enforce 

restitution orders with the intent that the Department of Justice would commit 

the resources necessary to ensure that the rights of victims are enforced. See

18 U.S.C. § 3612(c); Phillips, 303 F.3d at 550–51. 

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If the court finds that more than one defendant has contributed to a

victim’s loss, the court has the discretion to find each defendant liable for 

payment of the full amount of restitution, i.e., joint and several liability among 

the defendants. See 18 U.S.C. § 3664(h). In the alternative, the court may 

apportion liability among the defendants to require contribution from a 

defendant solely based on the loss the defendant caused to the victim and the 

economic circumstances of each defendant. See 18 U.S.C. § 3664(h); United 

States v. Scott, 270 F.3d 30, 52–53 (1st Cir. 2001); Trigg, 119 F.3d at 501 

(finding that multiple defendants may be held jointly and severally liable for 

restitution in different amounts, but victims may not recover an amount in 

excess of their loss). 

In some instances, courts apply a hybrid approach in imposing 

restitution—frequently employing a combination of the apportionment of 

liability approach while concurrently making all of the defendants jointly and 

severally liable. See, e.g., United States v. Bogart, 576 F.3d 565, 573–76 (6th 

Cir. 2009); United States v. Hunt, 521 F.3d 636, 640, 649 (6th Cir. 2008); United 

States v. Nucci, 364 F.3d 419, 423-24 (2d Cir. 2004); Scott, 270 F.3d at 52-53; 

United States v. Diaz, 245 F.3d 294, 312 (3d Cir. 2001); Trigg, 119 F.3d at 500-

01 (affirming restitution orders for full amount made joint and several with codefendants who had been ordered to pay restitution for some, but not all of full 

amount).

However, in doing so, courts may not award restitution that would result 

in the payment to the victim of an amount greater than the victim’s loss, nor 

may the district court award restitution to victims that have not been “directly 

and proximately harmed” by a defendant’s offense. See 18 U.S.C. § 

3663A(a)(2); United States v. De Leon, 728 F.3d 500, 506 (5th Cir. 2013).

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As we have stated, we review the legality of a restitution order de novo. 

Maturin, 488 F.3d at 659–60. Sheets argues that the district court erred when 

it denied the Government’s Restitution Motion, thereby preventing any further 

payment from Otto to apply to the overall restitution amount. We agree. 

In denying the Government’s Restitution Motion, the court stated that it 

must treat previously garnished funds belonging to Reed as satisfying the 

restitution ordered from both Otto and Reed and required the court to return 

the sum garnished from Otto to the garnishee. The district court relied

primarily on the Supreme Court’s decision in Paroline v. United States, 134 S. 

Ct. 1710 (2014). In Paroline, the defendant pleaded guilty to possession of child 

pornography, which included depictions of the sexual exploitation of a young 

girl, “A.” 134 S. Ct. at 1716. After the district court declined to award 

restitution to A., who sought restitution for damages suffered as a result of the 

trafficking of the pornographic images depicting her, this court reversed the 

district court’s decision and awarded A. restitution. Id. at 1718. Thereafter, 

the Supreme Court reversed this court’s decision and concluded that A. was 

not entitled to restitution because her remedy is limited to losses suffered by a 

victim that are a proximate result of the offense. Id. at 1730.

In addressing the Government’s response to the district court’s order to 

show cause in the instant case, the court correctly noted that restitution may 

only be ordered in response to a defendant’s conduct that actually caused the 

injury. The court cited Paroline for the proposition that “a court must assess 

as best it can from available evidence the significance of the individual 

defendant’s conduct in light of the broader causal process that produced the 

victim’s losses.” See id. at 1727–28. Using Paroline as a backdrop, the court 

reasoned that because the amount attributable to Otto and Reed’s conduct 

together is $66,606.48, Otto and Reed cannot in turn pay more than this 

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amount combined. The court found that the garnishment of Reed’s account for 

the full $66,606.48 satisfied the restitution amount owed by both defendants.

Paroline, however, did not address the proper apportionment of 

restitution payments where multiple defendants are jointly and severally 

liable for restitution arising from a single scheme. Paroline solely involves the 

issue of whether restitution may be imposed under the circumstances of that 

case, particularly where there is an issue of whether an actual and proximate 

causal link exists, and if so, how the court may determine the necessary 

restitution amount.

A more appropriate mechanism for this court to apply is a hybrid 

approach to restitution payments where multiple defendants are held liable

for injuries caused by a common scheme. For example, United States v. Scott 

directly addresses the issue currently before the court. In Scott, the 

government’s total loss was $37,970.68. Scott, 270 F.3d at 52. The district 

court ordered three co-defendants to pay restitution in different amounts for 

the same loss: $37,970.68, $8,253, and $7,479. Id. The court found that if “the 

defendants are each made liable for the full amount, but the victim may recover 

no more than the total loss, the implication is that each defendant’s liability 

ends when the victim is made whole.” Id. Thus, even where liability of each 

defendant overlaps and the total amount that they are held liable for exceeds 

the victim’s total injury, the MVRA permits the Government to hold any 

individual defendant liable for as much as the court ordered as to that 

defendant, but the government may not collect more from all defendants 

together than will make the victim whole. Id.; see also Trigg, 119 F.3d at 500–

05 (affirming a restitution order where multiple co-defendants were ordered to 

pay restitution in different amounts for their involvement in a theft scheme, 

some of which involved overlapping conduct, but where none of the defendants 

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was individually ordered to pay an amount greater than the total loss caused 

by the conspiracy). The court did not hold that payment by the defendant who 

owed $8,253, for instance, would extinguish any payments owed by the 

defendant required to pay $7,479, merely because liability extended to cover 

conduct under the same scheme. Scott, 270 F.3d at 52.

Similarly, as the Government noted below, United States v. Osborne is 

instructive. In Osborne, the defendant sought credit for restitution payments 

made by his co-defendants. See Osborne, No. 1:06-CR-00006-R, 2010 WL 

4788169, *2 (W.D. Ky Nov. 17, 2010). In declining to hold that the obligation 

was partially or fully satisfied, the court found that the defendant’s obligation 

to pay restitution for damages incurred was not extinguished merely because 

his co-defendants satisfied a part of the judgment arising from their joint

involvement in a conspiracy. Id. 

Sheets seeks the exact collection methodology as provided in Scott and 

Osborne. Here, the district court found that Otto’s obligation was fully 

satisfied based on the earlier payments by Reed. The district court’s concern—

that requiring payment from Otto would render both Otto and Reed 

responsible for restitution in excess of the loss attributable to their conduct—

is misplaced. As in Osborne, payments requested from Sheets, Otto, Reed, and 

the remaining defendants encompass overlapping injuries due to each 

defendant’s conduct. Because the DOE has not yet been fully repaid for its 

damages and Otto’s payments have failed to “eclipse the ceiling for his own 

restitution amount,” Otto’s obligation to repay has not lapsed. See id. Thus, 

any funds received by his co-defendants should be applied to the total sum 

owed by all defendants. In doing so, payments from Otto would also reduce 

the overall sum owed by Sheets. 

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The district court’s analysis similarly does not align with the MVRA’s 

rules regarding liability apportionment. If followed, the decision would 

preclude the Government from apportioning liability using the hybrid 

approach while concurrently making all of the defendants jointly and severally 

liable—an approach which multiple circuits have previously upheld. Bogart, 

576 F.3d at 573; Hunt, 521 F.3d at640, 649; Nucci, 364 F.3d at 423-24; Scott, 

270 F.3d at 52-53; Diaz, 245 F.3d at 312; Trigg, 119 F.3d at 500-01. Ensuring 

that restitution payments from all defendants contribute toward the victim’s 

overall recovery is a simple and uniform means to have victims receive full and 

timely restitution as provided by law and otherwise ensure that decisions of 

our district courts align with the purpose of the MVRA. See, e.g., Phillips, 303 

F.3d at 550–51. Apportioning liability in this way is not solely a benefit to 

Sheets but aids the DOE in promptly recovering for its injuries.

Accordingly, the district court erred in ordering that any funds garnished 

for the benefit of Otto by the garnishee, beyond the amount owed by Reed, be 

returned to the garnishee.6

IV. CONCLUSION

For the reasons stated herein, we REVERSE the district court’s denial 

of the Government’s Restitution Motion and REMAND the case to the district 

court for further proceedings.

 

6 We need not review the district court’s failure to properly apply the MVRA in its 

restitution order for plain error. Sheets failed to object to the court’s denial of the 

Government’s Restitution Motion because he had no opportunity to do so.

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