Opinion ID: 779007
Heading Depth: 2
Heading Rank: 2

Heading: Restitution: Proper Victim and Payment Schedule

Text: 75 The district court ordered Caldwell to pay restitution in the amount of $1,377,830.52 to the treasurer of Mississippi during incarceration, with any remaining balance to be paid in thirty-two equal monthly installments during supervised release, beginning the first full month of supervision. Caldwell challenges the district court's restitution order on two grounds: (1) there was no evidence that the state of Mississippi is a victim entitled to restitution under the applicable law, and (2) the financial information that Caldwell submitted to the court indicates that he does not have the ability to make the payments as required by the schedule imposed by the district court. 76 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. United States v. Hughey, 147 F.3d 423, 436 (5th Cir.1998). In the instant case, the district court imposed restitution under the Victim and Witness Protection Act, 18 U.S.C. § 3663 et seq. (2000) (the VWPA), which provides for mandatory restitution to victims of certain offenses, including mail fraud. Id. § 3663A(a)(1), (c)(1)(A)(ii). As Caldwell's claim that Mississippi is not a victim under the VWPA challenges the legality of the district court's restitution order, we address this claim first, and our review is de novo. See United States v. Mancillas, 172 F.3d 341, 342 (5th Cir.1999). 77 The VWPA defines a victim as a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme..., any person directly harmed by the defendant's criminal conduct in the course of the scheme. 18 U.S.C. § 3663A(a)(2). Thus, the VWPA's definition of victim serves to restrict[] the award of restitution to the limits of the offense. Mancillas, 172 F.3d at 343 (internal quotations and citation omitted). In Caldwell's case, there is ample evidence in the record supporting the district court's determination that Mississippi was directly and proximately harmed by the commission of Caldwell's offenses. 78 Caldwell's contention that Mississippi is not a victim of his offenses appears to be based on the assumption that his actions as CEO and chairman of the board of Magnolia Venture could have directly and proximately harmed only Magnolia Venture, which according to Caldwell is a private, and not a state, entity. We find this notion implausible. It is undisputed that Magnolia Venture was created by state statute and funded by state bonds. The bond director for the Mississippi State Treasury testified at Caldwell's trial that the interest on the Magnolia Venture bonds is paid out of the state treasury's general fund, which consists of tax revenues. Similarly, the district court noted at Caldwell's sentencing that the state treasurer had sent letters to the court express[ing] his outrage on behalf of the [state] and informing the court that when the bonds mature, the state will have paid over $14,000,000 in interest. 18 79 Furthermore, Magnolia Venture was created, and the money from the bond issue provided to Magnolia Venture, for the statutory purposes of, inter alia, creating new jobs for Mississippi and enhancing tax revenue for the state. MISS.CODE ANN. § 57-77-3 (1996). As we concluded above, the jury's finding that Caldwell schemed against Mississippi officials and taxpayers to obtain money is sufficiently supported by evidence indicating that Caldwell fraudulently diverted Magnolia Venture's money to himself and his companies instead of expending it in accordance with these statutory purposes. Accordingly, we find it clear that the district court's designation of Mississippi as a victim of Caldwell's offenses is proper under the VWPA. 80 Caldwell also challenges the district court's restitution order on the ground that the payment schedule is improper. Pointing out that his adjusted gross income was $43,692 in 1997 and $72,072 in 1998, Caldwell argues that he does not have the ability to comply with the payment schedule. We review the propriety of the district court's restitution payment schedule for abuse of discretion. See Hughey, 147 F.3d at 436. The VWPA instructs sentencing courts to order restitution to each victim in the full amount of each victim's losses as determined by the court and without consideration of the economic circumstances of the defendant. 18 U.S.C. § 3664(f)(1)(A). The court must take the defendant's financial situation into account, however, in determining the manner in which, and the schedule according to which, the restitution is to be paid. Id. § 3664(f)(2). The VWPA sets forth the following mandatory factors to be considered in determining a restitution payment schedule: 81 (A) the financial resources and other assets of the defendant, including whether any of these assets are jointly controlled; 82 (B) projected earnings and other income of the defendant; and 83 (C) any financial obligations of the defendant; including obligations to dependents. 84 18 U.S.C. § 3664(f)(2). 85 We will reverse a district court's restitution payment schedule only if the defendant demonstrates that it is probable that the district court failed to consider one of the mandatory factors and the failure to consider that factor influenced the court. United States v. Schinnell, 80 F.3d 1064, 1070 (5th Cir.1996). We find that Caldwell has not met this burden. The district court relied on the financial information in Caldwell's presentence report, including that the majority of the defendant's assets are jointly owned with his wife, that he has been the sole financial provider [for his wife and two children] in recent years, and that [d]espite considerable income from 1994 through 1996, the defendant and his wife appear to have accumulated a fairly substantial amount of personal debt and have little equity in their home. The payment schedule, although stringent, does not indicate a probability that the district court failed to consider these aspects of Caldwell's financial situation. The schedule does not require any specific amounts to be paid while Caldwell is incarcerated, but only that the balance be paid in thirty-two equal monthly installments after he is released. Further, the district court specified that interest would not accrue on Caldwell's restitution obligation. 86 According to the presentence report, after Magnolia Venture's board terminated him, Caldwell obtained employment at a computer resale company where he earned a salary of $97,000 in 1997. It is thus reasonable to assume that he will have a significant earning potential after his release from prison. While meeting the payment schedule may require considerable frugality on Caldwell's part, the schedule is not an abuse of the district court's discretion in light of Caldwell's financial circumstances. Further, as the government points out, if Caldwell finds himself unable to make payments under the schedule at some point in the future, the district court may adjust the schedule as the interests of justice require. 18 U.S.C. § 3664(k). We thus affirm the district court's restitution order. 19