Opinion ID: 3049934
Heading Depth: 1
Heading Rank: 12

Heading: mcnair’s sentence 92

Text: McNair was sentenced to concurrent 60-month sentences on one bribery conspiracy count (Count 1) and ten substantive bribery counts (Counts 2-3, 5-12) from the McNair trial and one bribery conspiracy count from the USI case (Count 32).93 The district court ordered McNair to pay restitution of $851,927 to the Jefferson County Commission and a special assessment of $1,200 but no fine. This restitution represented $376,927 in bribes to McNair by Dawson and the Pugh, Rast, and Dougherty defendants, and $475,000 in bribes to McNair by the USI contractors.94 On appeal, McNair challenges only the restitution part of his error. As noted before, McNair, RAST, Bobby Rast, Danny Rast, FWDE, and Dougherty adopt all arguments of all defendants as to all issues. In his cumulative error claims, Swann adopts all arguments of all defendants as to all issues. After review and oral argument, we conclude there is no reversible error as to any of these listed issues or as to any other conviction-related issues raised by any defendants. 92 Defendants McNair, Swann, and PUGH appeal their sentences. Defendants Roland Pugh, RAST, Bobby Rast, Danny Rast, FWDE, and Dougherty do not appeal their sentences. 93 McNair pled guilty to Count 32 in the USI case. In his plea agreement, he waived the right to “challenge any sentence so imposed or the manner in which the sentence was determined.” Thus, McNair waived his right to challenge his sentence as to Count 32. See United States v. Johnson, 541 F.3d 1064, 1067 (11th Cir. 2008), cert. denied, 129 S. Ct. 2792 (2009) (“[A] waiver of the right to appeal a sentence necessarily includes a waiver of the right to appeal the restitution imposed.”). Accordingly, we consider McNair’s sentence on only Counts 1, 2-3, 5-12 in the McNair case. The district court did not tie or link the restitution to Count 32 so we reject the government’s argument that McNair has waived his right to challenge the restitution. 94 This $851,927 consisted of: (1) $142,921 from PUGH ($11,709 for concrete work; three $20,000 payments; $4,820 carpet purchase; $17,200 in handrails; $5,000 retirement payment; and $44,192 check to George Word for McNair’s Arkansas home); (2) $84,566 from RAST ($52,990 in construction work by Mosley; $5,866 for security 119 sentence.95
McNair’s presentence investigation report (“PSI”): (1) assigned McNair a base offense level of 10, pursuant to U.S.S.G. § 2C1.1 (2001); (2) added 2 levels because McNair’s conduct involved more than one bribe, pursuant to § 2C1.1(b)(1); and (3) added 24 levels because the net profit or benefit ($67,980,043)96 to the contractors in connection with their bribes of McNair was gate; $5,300 in carpet installation by Gilley; $5,500 in landscaping by Bailey & Sons; $1,775 in plumbing by Buchanan; $5,000 retirement payment; and $8,135 for Alaskan cruise); (3) $133,040 from FWDE ($74,220 to Bailey for supervision; $5,000 retirement payment; $50,000 check to George Word for Arkansas home; and $3,820 for construction work on guard shack); (4) $16,400 from Dawson for an audio visual system; and (5) $475,000 from USI ($335,000 in cash and $140,000 paid on bogus invoices). In the restitution amount, the district court included bribe amounts from some of the counts either that were not submitted to the jury (such as counts involving the Arkansas home and the three $5,000 payments after McNair’s retirement) or on which McNair was acquitted (such as cash bribes). In our earlier recitation of the jury’s verdict, we used the amount of the bribe listed in the Indictment. During trial or at sentencing, the government proved that some bribe amounts actually were higher. For example, the Indictment as to Swann alleged the amount paid to Stanger was $24,176, but the ultimate amount proved was $28,839. The Indictment as to McNair alleged the amount paid to Bailey was $27,434, but the ultimate amount proved was $74,220. 95 This Court reviews de novo “the legality of an order of restitution,” and reviews for an abuse of discretion the determination of the restitution “value” of lost or destroyed property. United States v. Robertson, 493 F.3d 1322, 1330 (11th Cir. 2007). This Court reviews for clear error “factual findings underlying a restitution order.” Id. 96 McNair’s PSI calculated this $67,980,043 as follows: (1) from July 2000 to October 2002, RAST received $82,668,465 through County contracts and earned an average profit of 17.5%, yielding $14,466,981 in profit; (2) from October 1999 to November 2002, FWDE received $19,647,100 in County contracts and earned an average profit of 12%, yielding $2,357,652 in profit; (3) from August 1999 to March 2002, PUGH received $109,015,665 in 120 between $50 million and $100 million, pursuant to §§ 2B1.1(b)(1)(M) and 2C1.1(b)(2)(A).97 A total offense level of 36 and a criminal history category of I yielded an advisory guidelines range of 188-235 months’ imprisonment. The PSI pointed out the total value of the bribes received by McNair was $889,962 and that restitution was mandatory, “pursuant to 18 U.S.C. § 3663A(a)(1).” The PSI reviewed McNair’s financial records and determined his net worth was $497,163, calculated as follows: Assets Cash Assets  Checking Accounts $379.00 Insurance, Cash Surrender Value $10,521.00 Subtotal: $10,900.00 Unencumbered Assets Motor Vehicles $22,500.00 Subtotal: $22,500.00 Equity in Other Assets  Residence $96,000.00 McNair Investments (McNair Studio Bldg.) $379,455.00 Subtotal: $475,455.00 County contracts and earned an average profit of 43.61%, yielding $47,541,731 in profit; (4) from November 2000 to March 2001, Dawson Engineering received $2,108,283 in County contracts and earned an average profit of 12%, yielding $252,993 in profit; and (5) from February 1999 to February 2002, USI received $28,005,724 in County contracts and earned an average profit of 12%, yielding $3,360,686 in profit. 97 The PSI for McNair used the November 1, 2001 edition of the United States Sentencing Commission Guidelines Manual (the “Sentencing Manual”). 121 Total Assets $508,855.00 Unsecured Debts  Credit Card Debt $11,242.00  Internal Revenue Service $450.00 Total Unsecured Debts $11,692.00 Net Worth $497,163.00[98] Notably, McNair’s net worth is largely due to his equity of $379,455 in McNair’s studio building that was improved with the bribe money.99 The PSI stated that McNair’s monthly household income was $5,850, with monthly expenses of $4,109, resulting in net monthly cash flow of $1,741, calculated as follows: Income Defendant’s Social Security $1,779.00 Defendant’s Jefferson County Retirement $1,794.00 Spouse’s Social Security $826.00 Spouse’s Teachers Retirement $1,451.00 Total Income: $5,850.00 Necessary Living Expenses 98 The PSI states: “Items marked with an asterisk () represent [McNair’s] half of assets or obligations shared jointly with his spouse.” 99 The PSI’s net worth calculation does not include McNair’s partial ownership of certain Arkansas property, which the PSI described as follows: In addition to the above, the defendant indicated that he owns a one-twelfth share (along with his siblings) of his parents’ home-place in Fordice, AR. The property includes 50 acres, the parents’ original home, and a dwelling built in 2001. He indicated that the value of the property is approximately $300,000, so his share would be approximately $25,000. However, the property would be difficult to sell due to its joint ownership. 122 Home Mortgage $1,990.00 Groceries, Supplies $377.00 Utilities $664.00 Telephone $62.00 Transportation $240.00 Auto Insurance $89.00 Clothing $53.00 Medical $200.00 Credit Card Minimum Payments $434.00 Total Expenses: $4,109.00 Net Monthly Cash Flow $1,741.00 McNair filed three sets of written objections to parts of the PSI, and the PSI was revised twice, resolving some objections. McNair’s main unresolved objections were his claims that the government failed to show: (1) that there was any victim owed restitution; and (2) that $889,962 was the amount of loss incurred by Jefferson County. In his written objections, however, McNair did not claim that he lacked the financial ability to pay restitution at all or in the amount of $889,962.100
At sentencing, McNair again claimed the government failed to identify any victim and failed to show any identifiable losses by Jefferson County or any connection between the bribes and the County’s losses. McNair ultimately 100 McNair filed no objection to ¶¶ 154-157 of the PSI that set forth all of this financial information. 123 conceded he had received $851,927 in things of value but only for purposes of the guidelines imprisonment calculations.101 McNair maintained that no restitution should be awarded, because the government had not shown the County suffered a loss in that $851,927 amount or any amount for that matter. McNair’s counsel argued that under “Title 18, 3663, the Mandatory Victims Restitution Act, that the Government is required to show losses connected to victims, and that the amount of bribes paid to Mr. McNair does not constitute losses to victims, and that there’s been no showing of that. . . .” McNair contended “the amount of bribes paid to us is in no way connected to whatever losses these victims may or may not have sustained.” McNair claimed there was no showing that $851,927 was the loss to the County. Citing “3663(B)(ii)” twice, McNair also argued the district court should not order restitution because the complexity and prolongation of the sentencing process in identifying victims and determining the amount of losses attributed to those victims outweighed the need to provide restitution. We pause to point out here that 18 U.S.C. § 3663 is the Victim & Witness Protection Act (“VWPA”), not the 101 Contrary to the government’s arguments, McNair’s counsel repeatedly objected to the victims’ identities and loss amounts for the basis of restitution. For example, McNair’s counsel stated: “We have agreed, for guidelines calculations, concerning that amount, but we do not believe that that is an appropriate figure or that there is any appropriate figure for restitution in this case. And there is no basis legally to — for the Court to impose that kind of restitution order in this matter.” 124 Mandatory Victims Restitution Act (“MVRA”), and the substance of McNair’s argument comes from the VWPA.102 And as discussed later, the district court’s judgment effectively refers to the VWPA. During the sentencing hearing, McNair again did not claim he lacked the financial ability to pay restitution at all or in the amount of $889,962 referenced in the PSI. Ultimately, the district court found the Jefferson County Commission was the identifiable victim and found the amount of loss suffered was $851,927, reasoning: [C]ommon sense seems to me that, in any business, it doesn’t intentionally go into business for the purpose of losing money; that the evidence in all of these cases clearly shows that there was a great deal of profit to be earned from these sewer contracts. And it seems to me, commonsensically, that if you pay a certain amount of money as bribe money, whether it’s cash or for services performed, you’re going to add that back into the contracts or the bills submitted to the Jefferson County Commission which pays the bills, in the first instance. It is how they do business. Stated more clearly, it is a cost of business, a direct cost of business that it paid and made up for, at some point, by the Jefferson County Commission directly, and then indirectly to the rate payers of Jefferson County.[103] 102 Section 3663(a)(1)(B)(ii) is part of the VWPA and provides: (ii) To the extent that the court determines that the complication and prolongation of the sentencing process resulting from the fashioning of an order of restitution under this section outweighs the need to provide restitution to any victims, the court may decline to make such an order. 18 U.S.C. § 3663(a)(1)(B)(ii). Although citing “3663(B)(ii),” McNair’s counsel argued the substance of § 3663(a)(1)(B)(ii). 103 Judge C. Linwood Smith sentenced McNair after Judge Robert B. Propst conducted the 125 Recognizing the sewer construction contracts were awarded through a bidding process, the district court found that “the benefit to the bribe payors did not necessarily accrue in the awarding of those contracts in the first instance, but, rather, the benefit accrued during the performance phase of the work that they were engaged to perform through change orders, through agreements to additional payments due to change orders, and things of that nature.” The district court also found, “[a]t some point, any direct cost of business is going to be added back by the bribe payors in the bills, the padded bills, that are submitted to the Jefferson County Commission,” and “therefore, the Jefferson County Commission, in the first instance, which paid those bids, is an identifiable victim.” The district court reduced McNair’s total offense level by 10 levels from 36 in the PSI to 26. Specifically, the district court reduced the 24-level enhancement in the PSI to a 14-level enhancement under §§ 2C1.1(b)(2)(A) and 2B1.1(b)(1)(H). For the § 2C1.1(b)(2)(A) calculation, the district court used the $851,927 in bribes the contractors made to McNair, not the $67,980,043 in net profits or benefits the contractors received.104 After determining McNair’s offense level was 26 and McNair trial. 104 The guidelines provide that for an offense where the benefit received or loss to the government is more than $400,000 but not more than $1 million, a defendant’s offense level will increase 14 levels. U.S.S.G. §§ 2C1.1(b)(2)(A), 2B1.1(b)(1)(H) (2001). Section 2C1.1 governs the offense level for bribery of public officials but also uses, in part, the theft table in § 2B1.1. 126 criminal history category was I, the district court determined that the advisory guidelines range was 63 to 70 months’ imprisonment.105 The district court sentenced McNair to 60 months’ imprisonment for each count, to run concurrently, followed by two years’ supervised release, and ordered restitution of $851,927 to the Jefferson County Commission and a special assessment of $1,200. Although the advisory guidelines fine range was $20,000 to $135,960,086, the district court did not impose any fine. After noting its review of the PSI’s financial information, the district court stated it imposed restitution but no fine, as follows: I reviewed the financial information provided in your presentence investigation. And in reliance upon that information, I find that you do not have the financial ability to pay even a minimum guideline fine. Further, the imposition of such a fine would unduly burden your wife, who is totally dependent upon you for not just physical and spiritual, but financial support. Therefore, no fine will be imposed. I do order, however, as I must order, that you pay to the United States a special assessment in the aggregate amount of $1,200. You also are ordered to pay restitution in the amount of $851,927. That is due to the Jefferson County Commission at the address shown in paragraph 172 of your presentence report. 105 McNair objected to the PSI’s failure to accord McNair a reduction for acceptance of responsibility. The district court overruled that objection. McNair does not appeal the district court’s calculation of his advisory guidelines range as 63 to 70 months’ imprisonment. In addition, the government has not challenged the district court’s use of the bribe amounts, as opposed to the net profits amounts, as the basis for the enhancement calculation under § 2C1.1(b)(2)(A), nor McNair’s advisory guidelines range. So we assume for present purposes that the use of the bribe amounts and the guidelines range were proper. 127 At sentencing, the district court did not expressly state the statutory basis for its order of restitution. However, the district court’s judgment states that, “pursuant to the Victim & Witness Restitution Act,” the court finds the Jefferson County Commission is a victim of McNair’s criminal conduct, has sustained a loss in the amount of $851,927, and orders restitution in the amount of $851,927.106
The VWPA, 18 U.S.C. § 3663, provides that: The court, when sentencing a defendant convicted of an offense under [Title 18] . . . other than an offense described in section 3663A(c),[ 107] may order . . . that the defendant make restitution to any victim of such offense, . . . (B)(i) The court, in determining whether to order restitution under this section, shall consider– (I) the amount of the loss sustained by each victim as a result of the offense; and 106 We reject the government’s argument that the district court imposed restitution under the MVRA. The PSI recommended the district court order restitution under “18 U.S.C. § 3663A(a)(1),” which is the MVRA. Although referring to the MVRA, McNair’s attorney (in the sentencing hearing) cited sections in the VWPA and made arguments premised on the substance of the VWPA (§ 3663). And the district court’s judgment references the “Victim & Witness Restitution Act.” Although this reference used “Restitution” instead of Victim & Witness Protection Act, it more closely resembles the VWPA than the MVRA. The government never objected to that reference and never moved to correct it. Thus, we conclude the district court imposed restitution under the VWPA. 107 The VWPA, under which restitution is discretionary, excepts offenses in § 3663A(c), which is the MVRA, under which restitution is mandatory. We sua sponte note there is a potential issue of whether bribery is “an offense against property” covered by § 3663A(c) and whether the MVRA applies to bribery crimes. 18 U.S.C. § 3663A(c). Nothing herein should be read as implying the answer to that question. We review the VWPA only because that is the only thing the district court referenced in McNair’s sentence. 128 (II) the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant’s dependents, and such other factors as the court deems appropriate. . . . (2) For the purposes of this section, the term “victim” means 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, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant’s criminal conduct in the course of the scheme, conspiracy, or pattern. 18 U.S.C. § 3663. “The government bears the burden of demonstrating the amount of the victim’s loss by a preponderance of the evidence.” United States v. Futrell, 209 F.3d 1286, 1290 (11th Cir. 2000) (citing 18 U.S.C. § 3664(e), which states, “Any dispute as to the proper amount or type of restitution shall be resolved by the court by the preponderance of the evidence.”). However, “[t]he burden of demonstrating the financial resources of the defendant and the financial needs of the defendant’s dependents shall be on the defendant.” 18 U.S.C. § 3664(e); see United States v. Twitty, 107 F.3d 1482, 1494 n.14 (11th Cir. 1997) (stating the burden rests on the defendant to demonstrate lack of financial resources by a preponderance of the evidence).
McNair argues that the government failed to prove any losses suffered by the County. We disagree. For starters, the evidence showed McNair received $851,927 in goods, services, labor, materials, and money as a result of the bribery 129 scheme. Further, during the same time period, the contractor-defendants received hundreds of millions of dollars in payments under their County contracts and made millions of dollars in profits.108 And the district court did not clearly err in finding that the contractors essentially recouped their bribe money by adding it back to their sewer and engineering contract bills as a cost of doing business with the County. See United States v. DeVegter, 439 F.3d 1299, 1303 (11th Cir. 2006) (“Assuming the bribe achieves its intended result, the benefit would usually exceed the bribe.”); see also Futrell, 209 F.3d at 1292 (concluding the district court did not abuse its discretion in ordering restitution under the MVRA based on “approximation” of loss resulting from defendants’ fraud). The district court’s determination is consistent with Supreme Court precedent stating that when a public official acquires an ill-gotten benefit as a result of his office, the government suffers losses in that amount. See United States v. Carter, 217 U.S. 286, 305-06, 30 S. Ct. 515, 520 (1910).109 108 See supra note 96. 109 In Carter, the Supreme Court stated: It is not enough for one occupying a confidential relation to another, who is shown to have secretly received a benefit from the opposite party, to say, “. . . you cannot show that you have sustained any loss by my conduct.” Such an agent has the power to conceal his fraud and hide the injury done his principal. It would be a dangerous precedent to lay down as law that unless some affirmative fraud or loss can be shown, the agent may hold on to any secret benefit he may be able to make out of his 130 McNair next contends the district court erred by failing to consider his financial ability to pay restitution and by not making an explicit finding that he had the financial ability to pay restitution of $851,927. We can locate no place in this voluminous record where McNair claimed in the district court that he lacked the financial ability to pay restitution or the $889,962 amount of restitution recommended in the PSI and sought by the government. See Jones, 289 F.3d at 1265. Because McNair raises this issue for the first time on appeal, we review it only for plain error. United States v. Rodriguez, 398 F.3d 1291, 1298 (11th Cir. 2005). We may not correct an error the appellant failed to raise in the district court unless there is: “‘(1) error, (2) that is plain, and (3) that affects substantial rights.’” Id. (quoting United States v. Cotton, 535 U.S. 625, 631, 122 S. Ct. 1781, 1785 (2002)). If the preceding three conditions are met, we may exercise discretion to correct a forfeited error, but only if “(4) the error seriously affects the fairness, integrity, or public reputation of judicial proceedings.” Id. (quotation marks omitted). agency. The larger interests of public justice will not tolerate, under any circumstances, that a public official shall retain any profit or advantage which he may realize through the acquirement of an interest in conflict with his fidelity as an agent. If he takes any gift, gratuity, or benefit in violation of his duty, or acquires any interest adverse to his principal, without a full disclosure, it is a betrayal of his trust and a breach of confidence, and he must account to his principal for all he has received. Carter, 217 U.S. at 305-06, 30 S. Ct. at 520. 131 McNair has not shown plain error for several reasons. First, “[d]istrict courts are not obliged to make explicit factual findings of a defendant’s ability to pay restitution if the record provides an adequate basis for review.” United States v. Dabbs, 134 F.3d 1071, 1084 (11th Cir. 1998) (quoting Twitty, 107 F.3d at 1493); accord United States v. Fuentes, 107 F.3d 1515, 1529 n.27 (11th Cir. 1997); United States v. Remillong, 55 F.3d 572, 574-78 (11th Cir. 1995); United States v. Hairston, 888 F.2d 1349, 1353 (11th Cir. 1989) (stating, “[i]f the record provides an adequate basis for . . . review, the court need not assign specific reasons for its decision to order full restitution. If the record is insufficient, reasons must be assigned.”) (quotation marks omitted).110 “‘In order to warrant a reversal of the restitution order, the challenging party must show that the record is devoid of any evidence that the defendant is able to satisfy the restitution order.’” Dabbs, 134 F.3d at 1084 (quoting United States v. Davis, 117 F.3d 459, 463 (11th Cir. 1997)). However, “we will not uphold the district court’s exercise of discretion if the record is devoid of any evidence that the defendant is able to satisfy the restitution order.” Remillong, 55 F.3d at 574. Second, the record is not devoid of any evidence of McNair’s ability to 110 Since 1989 this Court has agreed “with the courts that have declined to adopt a rigid rule requiring district courts to make findings of fact whenever they impose an order of restitution under the VWPA.” Hairston, 888 F.2d at 1352. 132 satisfy the restitution order. The PSI set forth McNair’s finances in detail, the district court said it had reviewed that financial information, and McNair did not contest the facts as to his finances. There is no dispute that McNair has equity of $379,455 in his studio building, which was built in part using the bribe money. The studio value could reduce the restitution from $851,927 to $472,472. In addition, McNair has a net cash flow of $1,741 per month, which is about the size of his monthly Jefferson County retirement check of $1,794. That retirement check alone permits McNair to pay $21,528 annually toward the restitution. Five years of $21,528 payments annually would equal over $100,000 in restitution. The unique problem in this case, however, is that McNair is now 84 years old.111 Although the PSI states McNair “reports no current medical problems or prescription medications taken on a regular basis,” it would take McNair 21.94 years at $21,528 per year to pay the remaining $472,472 left in restitution. Therefore, the record does not necessarily show that McNair has the financial ability to pay the full $851,927 in restitution. Nonetheless, under the fourth prong of plain error review, we conclude any error does not seriously affect the fairness, integrity, or public reputation of judicial proceedings because (1) McNair, not the government, has the burden to prove lack 111 The PSI states McNair’s date of birth is November 22, 1925. 133 of financial ability to pay the restitution in full; (2) the district court did not impose any fine but only restitution; (3) McNair does not dispute that he received $851,927 in goods, services, materials, labor, and other things of value; (4) no one, not even the district court if we remanded for further findings, knows how long McNair will live and continue to receive his monthly Jefferson County pension and thus be able to pay some restitution each month; and (5) the party owed this restitution is the same party currently paying McNair $1,749 per month, making it eminently fair to recapture these payments as restitution for as long as they are made. Given all of the unique circumstances in this case, McNair has not shown plain error in the district court’s restitution order. McNair also challenges the restitution order on the ground that United States v. Booker, 543 U.S. 220, 125 S. Ct. 738 (2005), requires that the factual predicate for restitution be found by a jury beyond a reasonable doubt. McNair’s Booker challenge is foreclosed by our precedent. United States v. Williams, 445 F.3d 1302, 1310 (11th Cir. 2006) (“Booker does not apply to restitution orders.”), abrogated on other grounds by United States v. Lewis, 492 F.3d 1219, 1222 (11th Cir. 2007). We thus reject this argument.112 112 McNair objected to this statement in the PSI: “Theo Lawson, County Attorney for Jefferson County, AL, appeared at the sentencing in U.S. v. Dougherty, (05-61, 05-544) and indicated that the county requests restitution in each of these cases on the amount of the bribes.” On appeal McNair claims the PSI’s inclusion of this “testimony” violated his right to 134 For the first time on appeal, McNair also claims the district court erred in ordering any restitution because co-defendant Roland Pugh was not ordered to pay restitution. We review this claim for plain error. See United States v. Rodriguez, 398 F.3d 1291, 1298 (11th Cir. 2005). Seven of McNair’s co-defendants were ordered to pay restitution, to wit: PUGH ($239,652), Bobby Rast ($141,000), Danny Rast ($141,000), RAST ($141,000), Swann ($355,533), FWDE ($225,149), and Dougherty ($225,149). McNair has shown no plain error in this regard.113 For all these reasons, we affirm the restitution order as to McNair.