1 Violations of 18 U.S.C. § 513 (a) and 18 U.S.C. § 513 (b), respectively. UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 98-40700

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

REY REYES MANCILLAS,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Texas

April 9, 1999

Before WISDOM, STEWART, and DENNIS, Circuit Judges.

PER CURIAM:

Background

Rey Reyes Mancillas pleaded guilty to one count of knowingly possessing counterfeited

securities and one count of knowingly possessing implements designe d to make counterfeited

securities with t he int ent that they be so used. 1 Mancillas was sentenced to serve 33 months in

custody, three years of supervised rele ase, a $200 mandatory special assessment, and restitution

totalling $5 0,266.16 to five different check cashing entities. Mancillas appeals, asserting that the

restitution component of his sentence is illegal. We reverse and remand.2 32 F.3d 171 (5th Cir. 1994).

3 18 U.S.C. § 3663A.

4 United States v. Chaney , 964 F.2d 437, 451 (5th Cir. 1992).

-2- Facts

In December of 1997, Richard Campos was arrested after passing a fraudulent insurance

check at a Corpus Christi check cashing outl et. Campos advised the Corpus Christi police that he

had cashed the check for the appellant, Rey Mancillas. The United States Secret Service then began

to investigate Mancillas for counterfeiting. During the course of their investigation, the Secret

Service identified several other individuals who had cashed checks for Mancillas in t he Houston,

Austin, and San Antonio areas.

Acting on this information, the agents obtained a warrant to arrest Mancillas and to search

his home. During the course of the search, the agents discovered blank counterfeit checks and

equipment for the producti on of counterfeit checks. Mancillas was arrested, and later indicted on this

two-count indictment. Mancillas eventually pleaded guilty to both counts of the indictment.

Discussion

After pleading guilty as charged, Manci llas o bjected to the restitution component of the

presentence investigative report. Mancillas argued at sentencing, and argues now on appeal, that the

check-cashing outl ets were not “vict ims” of these crimes, as their losses were not directly tied to the

conduct underlying the elements of the offense. Mancillas cited the district court to the opinion of

this Court in United States v. Hayes in support of this contention. 2 The government contends that

the sentence is a proper one under the Mandatory Victims Restitution Act (MVRA). 3 We review

the legality of a restitution order de novo

. 45 32 F.3d 171, 173 (5th Cir. 1994).

6 The Anti-terrorism Effective Death Penalty Act amended the already-existing VWPA (18

U.S.C. § 3663) and created the new MVRA (18 U.S.C. § 3663A).

-3- In Hayes

, the defendant was convicted o f po ssessing, on a specific date outlined in the

indictment, credit cards stolen from the U.S. mail. The district court then ordered Hayes to pay

restitution for credit card charges made during the period before that date. This Court held that the

defendant’s specific conduct which was the basis for his conviction, possessing stolen credit cards,

could not be used as a basis for restitution owed for the prior use of those cards. 5

At Mancillas’s sentencing, the district judge distinguished Hayes in two respects. First, the

district judge noted t hat Hayes was sentenced under the Victim and Witness Protection Act

(VWPA), which has since been amended. 6 Prior to the amendment, a “victim” was anyone directly

harmed as a result of the commission of the offense. Since amended by Congress both 18 U.S.C. §

3663 (the VWPA) and § 3663A (the MVRA) now define a “vict im” as a person “d irectly and

proximately harmed” as a result of the commission of the offense.

The district court also noted that in H ayes

, the defendant was charged with simply possessing

the stolen credit cards. Mancillas, in count of two of the indictment, was charged with possession

of implements for making counterfeited securities with the intent that they be so used. The district

court held that because the amendments enlarged the class of persons who co uld be considered

vict ims by use of the language “directly and proximately” harmed, a nd because count two of the

indictment included an element of “use,” that restitution was proper in this case.

In the time since Mancillas was sentenced, this Court has reviewed the phrase “directly and7 147 F.3d 423 (5th Cir. 1998).

8 Id . at 437

-4- proximately harmed” in the context of the amended VWPA in United States v. Hughey

. 7 In that case

this Court expressly held that, while the amendments to the VWPA expanded the definition of

“victims” to include conspiracy cases, “restrict[ing] the award of restitution to the limits o f t he

offense, however, still stands.” 8 We see no reason to apply this reasoning to the amended VWPA and

not to the MVRA. Thus, the district court’s reasoning that H ayes is distinguishable because of the

language “direct and proximate” is erroneous.

We next address the issue of “use.” The district court held that “use” of the implements to

make counterfeit securities was an element of the crime, thus making restitution proper. The plain

language of the statute co nt radicts this reasoning. 18 U.S.C. § 513 (b) in pertinent part, reads:

“Whoever... possesses... an implement designed for or particularly suited for making a counterfeit or

forged security with the in t ent t hat it be so used shall be punished” in accordance with the further

statutory provisions. The language in question, “the intent that it be so used,” plainly refers to f uture

use of the implements, in much the same way that possession with the intent to distribute contraband

refers to future distribution.

The government argues that the element of intent to use could only be proved through the

introduction of evidence of prior use, whi ch wo uld t hen allow the jury to infer the defendant’s

intention reg arding fut ure use. The government further argues that this prior conduct is thus so

intertwined with the conduct forming the basis for the indictment as to make restitution proper. We

find this argument unpersuasive. Mancillas’s possession of the implements with the intent to use them

in the future can in no way be said t o direct ly and proximately have caused a previous harm,9 To re-visit the example of contraband distribution, under the government’s theory, no one

could be convicted of possession with the intent to distribute cocaine without evidence that they had

distributed cocaine in the past. Clearly, this is not so. There are several methods which can be used

to prove intent. One example is the inculpatory statement o f the accused. While the contents of

Mancillas’s statement to the police are not before this Court, should the case have gone to trial it

would likely be at least one method of proof the government would have used.

-5- specifically, the harm to the check-cashing companies. Further, the government’s contention that

prior acts are the only way to determine future intent is erroneous. By that logic, Mancillas could not

have the i nt ent t o use the implements until after he had already used them at least once, thereby

limiting the enforcement of this statute to repeat offenders. 9

Conclusion

We therefore hold that a defendant sentenced un der t he provisions of the MVRA is only

responsible for restitution for the conduct underlying the offense for which he has been convicted.

In the case before us, the district court erroneously concluded that an element of future use of the

implements in the offense charged was sufficient to hold the defendant responsible for past uses of

these implements.

The restitution component of Mancillas’s sentence is illegal, and is hereby VACATED. The

ruling of the district court with regard to restitution is REVERSED and REMANDED for sentencing

consistent with this opinion.