1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-27-1995

USA v Carrara

Precedential or Non-Precedential:

Docket 94-5204

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Recommended Citation

"USA v Carrara" (1995). 1995 Decisions. Paper 63.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/63
 

 UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

 

No. 94-5204 

 

UNITED STATES OF AMERICA 

V. 

NICHOLAS CARRARA, 

 Appellant 

 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY 

(D.C. Criminal No. 91-00537-2) 

 

 

Submitted Under Third Circuit LAR 34.1(a) 

December 1, 1994 

Before: HUTCHINSON and NYGAARD, Circuit Judges

and SEITZ, Senior Circuit Judge

(Opinion Filed: February 27, 1995) 

MICHAEL N. PEDICINI, ESQUIRE 

Courthouse Plaza 

60 Washington Street 

Morristown, NJ 07960 

Attorney for Appellant 

FAITH S. HOCHBERG, ESQUIRE 

United States Attorney 

GLENN J. MORAMARCO, ESQUIRE 

Assistant United States Attorney 

970 Broad Street 

Newark, NJ 07102 

Attorneys for Appellee 

 
 OPINION OF THE COURT 

 
NYGAARD, Circuit Judge. 

 Appellant, Nicholas Carrara, served as president of 

Omega Network Systems, Inc., which provided various labor unions, 

municipalities, and other companies with administrative services 

for health care claims. Carrara engaged in two unrelated 

fraudulent schemes for which he was charged: a Woodbridge 

Township embezzlement scheme and a Teamsters kickback scheme. 

During his trial, Carrara pleaded guilty to a one-count 

information charging him with a dual conspiracy: (1) making 

kickback payments to one Zingone; and (2) misappropriating 

$650,000 in Woodbridge Township insurance funds. 

 On appeal, Carrara contends that the government's 

refusal to move for a downward departure under the United States 

Sentencing Guidelines § 5K1.1 was punitive and violated his 

constitutional rights; that the government's failure to recommend 

a departure breached the government's plea agreement with him; 

that even though he breached the agreement, it should not be 

nullified because the government still benefitted from his 

cooperation; and, that the disparity between the sentence imposed 

on Carrara and the sentences imposed on his co-defendants makes 

his sentences unlawful. On these issues, we will affirm. On 

Carrara's claim that the district court failed to make the 

required factual findings to support its restitution order, 

however, we will reverse and remand. 
I. 

 Carrara entered into a cooperating plea agreement with 

the government that required him to disclose truthfully all 

information on all matters into which the United States 

Attorney's Office inquired. Carrara also agreed to provide 

truthful testimony to the Grand Jury and at trial. Additionally, 

he agreed that if he gave any materially false information or 

testimony, his plea agreement would be void. For the 

government's part, it agreed that if Carrara fully complied with 

the terms of the agreement, it would file a § 5K1.1 motion, 

seeking a downward departure from Carrara's sentencing guideline 

range. 

 Carrara cooperated with the government and gave 

information by which the government was able to convict several 

individuals. That is undisputed. Nonetheless, the government 

did not file a § 5K1.1 motion for a cooperation departure, and at 

sentencing Carrara received no benefit for his cooperation. 

Carrara's departure issues are resolved against him by an 

affidavit he filed, which he now admits was materially false, 

because in filing it he breached his plea agreement and relieved 

the government of its obligations. 

A. 

 The government had filed a motion to disqualify 

Carrara's counsel based upon a conflict of interest. Carrara 

filed a cross motion seeking to withdraw his guilty plea, 

requesting that the court order the U.S. Attorney's Office to 

recuse, and urging the court to dismiss the indictment against 
him. In support of his motion, Carrara filed an affidavit 

stating that although he pleaded guilty he was actually innocent. 

In his affidavit, Carrara accused the government of trying to 

pressure him into lying when it did not like the information he 

provided. Based upon his affidavit, his newly alleged innocence 

and the government's misconduct, Carrara sought to withdraw his 

guilty plea. This affidavit, however, created more problems for 

Carrara than it solved and placed Carrara in a real dilemma: if 

the affidavit were true, his earlier trial testimony was perjury; 

if the trial testimony were true, the affidavit was perjury. In 

sum, Carrara is "hoisted by his own petard." 

 Because of the several twists and turns of events, the 

district court held what amounted to a full Rule 11 hearing when 

Carrara reaffirmed his guilty plea. During the hearing, Carrara 

affirmed on the record that he knew what he was doing and that 

his plea was voluntary; that he understood the penalties he was 

facing, and he affirmed the factual basis for his guilty plea. 

The government also recorded its position on Carrara's decision 

to reaffirm his guilty plea and its decision not to file a 

§ 5K1.1 motion for a downward departure for Carrara.1 

 The district court pointed out that when Carrara 

reaffirmed his guilty plea, he was aware that the government was 

not going to file a § 5K1.1 motion. The court added that even if 

 

1. The government did agree to take the position that, even 

despite the false affidavit, Carrara's equation should not be 

enhanced two points for obstruction of justice and in fact should 

be reduced two levels for acceptance of responsibility. 
the government had filed the motion, "I would have denied it, for 

it is within my discretion to do so." At issue before us is 

whether the government's refusal to file a § 5K1.1 motion is a 

breach of its agreement with Carrara. What Carrara seeks is 

specific performance of that agreement. 

 B. 

 It is axiomatic that it is within the government's 

discretion whether to seek a § 5K1.1 departure for substantial 

cooperation. Moreover, a claim by a defendant that he has 

"merely provided substantial assistance will not entitle a 

defendant to a remedy...or an evidentiary hearing." Wade v. 

United States, 112 S.Ct. 1840, 1844 (1992) (holding that courts 

have authority to review and grant a remedy to defendants who can 

show the prosecutor's refusal to file a substantial-assistance 

motion "was based upon an unconstitutional motive." Id.) 

Nonetheless, as in this case, once the government makes an 

agreement with a defendant to file a motion, it is bound by the 

terms of the agreement. It is a simple matter of contract law. 

United States v. Moscahlaidis, 868 F.2d 1357, 1360 (3d Cir. 

1989). What Carrara seems to ignore, however, is that the 

agreement works both ways. Not only must the government comply 

with its terms and conditions, but so must he. Here it is 

undisputed that Carrara violated the agreement, his allegations 

of pressure from the government notwithstanding, because he 

supported his motion to withdraw his guilty plea with a 

materially false affidavit. 
 Carrara seeks to absolve himself of this (or these) 

falsehoods by contending that he filed the affidavit upon advice 

of ineffective counsel. This may be a reason, but it is not an 

excuse. The fact of the matter is -- he lied. Having done so, 

he cannot come before the court with unclean hands and request 

that the government now be ordered to perform his version of 

equity. Specific performance requires that the court enforce 

every portion of the agreement, which most specifically here 

includes the government's right to withhold its motion because 

Carrara gave false testimony. 

 The plea agreement explicitly states: 

 Nicholas Carrara shall truthfully disclose 

all information concerning all matters about 

which this office inquires of him. Nicholas 

Carrara shall make himself available at all 

reasonable times requested by representatives 

of the Government and shall truthfully

testify in the grand jury and at any trial as 

to any subject about which he is questioned. 

Appendix, 15 (emphasis added). It further provides: 

 Should Nicholas Carrara withdraw from this 

agreement . . . or should it be established 

that Nicholas Carrara has given materially 

false, incomplete, or misleading testimony or 

information or otherwise has violated any 

provision of this agreement, the agreement 

and its benefits to Nicholas Carrara shall be 

null and void. 

Appendix, 16 (emphasis added). Finally, the agreement gives an 

unambiguous warning that if Carrara were to provide misleading or 

false testimony, he would be prosecuted for perjury. This 

underscores a basic premise of the plea agreement; that is, he 
must provide the government with truthful and reliable 

information that will aid it. 

C. 

 We also reject Carrara's argument that it is unfair for 

the government to reap the benefits of the plea agreement and 

avoid its responsibilities to him. In short, given Carrara's 

breach, the government no longer has any responsibility to 

request downward departure. Moreover, to the extent that the 

government benefitted from information Carrara provided, the 

government was also put in the unenviable position of having to 

ascertain what aspects of Carrara's testimony were true and what 

were lies. Carrara entered into the plea agreement and then 

violated it. He must now endure the results of his dishonesty. 

D. 

 For all of the foregoing, we conclude that the 

government's actions in refusing to file a § 5K1.1 motion were 

proper. Where, as here, the government is not controlled by an 

agreement, it has the power but not the duty to file a 

§ 5K1.1 motion. Wade v. United States, 112 S.Ct. at 1843. 

Where, as here, the assistance rendered is flawed because of the 

defendant's dishonesty, the government is fully justified in not 

filing a motion.2 

 

2. Carrara also contends that the disparity between his sentence 

and that imposed upon others is contrary to the policy of the 

sentencing guidelines, and requests that his sentence be vacated 

and the matter remanded for resentencing. We will affirm on this 

issue as well. Carrara was sentenced to a 46-month term of 

imprisonment. This is within the sentencing guideline range of 

41 to 51 months, and a sentencing disparity among co-defendants 

is not a proper basis upon which to base a departure from the 
II. 

 Finally, appellant contends that the district court 

erred by ordering him to pay $650,000 in restitution. He does 

not challenge the victims' losses, but contends only that the 

court's award is not supported by a finding that he is 

financially able to pay restitution. On this issue the 

government concedes error, and after careful examination of the 

record we agree that the district court erred. See United States 

v. Palma, 760 F.2d 475, 480 (3d Cir. 1985). 

 Historically restitution has occupied a prominent 

penological position. It predates fines and prison, and in the 

earliest penal codes, it was always awarded to the victim of a 

property crime -- usually in addition to punishment.3 

Restitution has customarily been awarded to answer various 

penological concerns. It is primarily restorative and is 

supposed, at least partially, to replace victims in the financial 

position they occupied before the offense was committed against 

them. See generally S.Rep No. 532, 97th Cong.2d Sess. 30, 

reprinted in 1982 U.S.C.C.A.N. 2515, 2536-39. In that sense, 

restitution is also remonstrative, and, where indicated, will 

require that offenders disgorge their illgotten gains. United 

States v. Woods, 986 F.2d 669, 678-81 (3d Cir. 1993). Then too, 

(..continued) 

guidelines. In sum, there is simply no support for appellant's 

position on this issue. 

3. The Code of Hammurabi, King of Babylon ca. B.C.E. 2285-2242, 

imposes the death sentence for 27 crimes, and restitution 

sentence for over 50 crimes. Trans. C.H.W. Johns, M.S., 

Edinburgh, (1905). 
restitution is rehabilitative because it permits or indeed 

requires that offenders personally face what they have done and, 

at least partially, atone for their legal transgressions by 

direct action in the form of a positive personal performance.4 

Congress requires, however, that when restitution is indicated 

the district court consider both the loss sustained by the victim 

and the offender's financial resources, financial needs, and 

present and potential earning ability. 18 U.S.C. § 3664(a). 

 The question whether the district court erred here is 

very close, however, because at sentencing defense counsel 

introduced no financial evidence of Carrara's ability to pay. He 

argued, nonetheless, that Carrara did not have any personal 

assets to make restitution. Significantly, he also informed the 

court that Carrara had another attorney assisting in filing 

claims against insurance companies that provide coverage to Omega 

Network Systems, seeking funds from them to repay the 

embezzlement victims. By letter, Carrara's civil attorney 

informed the district court that the insurance proceeds 

"arguably, may well provide [Woodbridge] with restitution." He 

added that there also "exists a reasonable probability that a 

recovery against [other] third party defendants...will be 

obtained." 

 The district court then ordered Carrara to pay 

restitution, but added that Carrara would be credited for 

 

4. See Richard E. Laster, Criminal Restitution: A Survey of its

Past History and an Analysis of its Present Usefulness, 5 U. 

Rich. L.Rev. 71, 80-82 (1970). 
payments made by insurance companies or third parties. In doing 

so, it appears that the district court may well have 

appropriately considered the aims and goals of restitution. 

Moreover, although New Jersey law follows the general rule that 

"an insurer may not contract to indemnify an insured against the 

civil consequences of his own wilful act," Vargas v. Hudson 

County Bd. of Elections, 949 F.2d 665, 673 (3d Cir. 1991) quoting

Ambassador Ins. Co. v. Montes, 388 A.2d 603, 606 (1978), it, 

nonetheless, has no public policy prohibiting an indemnity in the 

unique circumstances presented here, if Carrara does not benefit 

and an innocent third person will receive the protection afforded 

by the insurance. Ambassador, 388 A.2d at 606-607 (1978). 

 The difficulty is that under the court's restitution 

order, if Carrara were not successful with these third-party 

payers, he would be liable for the entire amount. Defense 

counsel argued that Carrara is currently indigent. That, 

however, is not determinative. Congress recognized that 

indigency may be temporary and that even an indigent offender may 

be compelled to pay restitution, if necessary, during the period 

of up to five years after incarceration. 18 U.S.C § 3572(d). 

Hence, the district court was required to make the necessary 

factual findings on all factors bearing on Carrara's current and 

future ability to pay it. United States v. Logar, 975 F.2d 958, 

961-64 (3d Cir. 1992). 

 The restitution order is not adequately supported here 

because the district court did not make specific findings whether 

third-party payers exist, which the record suggests is so, or 
whether Carrara is able to pay without them, which the records 

suggests is not so. Moreover, if restitution or its amount is to 

be conditioned upon payments from insurance companies or third 

party payers, or if Carrara's liability has an upper limit, the 

order must expressly say so. Finally, the court must structure 

the award so that no portion of Carrara's restitutionary burden 

is relieved by payments from insurance proceeds. Ambassador 388 

A.2d at 606-607. Because the district court's order is not so 

conditioned, limited or supported, we will remand the cause and 

allow the district court to make the necessary inquiries and 

findings. 

III. 

 In sum, we affirm the district court's sentence except 

as to restitution. We will vacate the portion of Carrara's 

sentence awarding restitution and remand the cause to the 

district court, giving it the opportunity to hear evidence and 

make factual findings sufficient to support the order at issue, 

or in the alternative, to enter a new order in an amount and upon 

conditions it deems both appropriate and not inconsistent with 

this opinion.