Opinion ID: 196544
Heading Depth: 3
Heading Rank: 3

Heading: The Victim and Witness Protection Act

Text: 14 Finally, Gilberg claims that the restitutionary sentence overstates victim loss because the class of victims is too broad. He points out that the sentencing court ordered restitution in connection with all thirty-one loans, whereas the indictment charged him in relation to only twenty-one loans. 15 The government concedes that the last criminal conduct involving Gilberg took place no later than June 1990. The Victim and Witness Protection Act (VWPA), 18 U.S.C. §§ 3663-3664 (1990), governs restitution in criminal cases. See, e.g., United States v. DeSalvo, 41 F.3d 505, 511 (9th Cir.1994). In June 1990, the VWPA provided that the district court--in sentencing a defendant convicted of an offense--may order restitution to any victim of such offense. 18 U.S.C. § 3579(a)(1) (1982) (emphasis added); see 18 U.S.C. §§ 3579-3780 (1987), amended by 18 U.S.C. §§ 3663-3664 (1990). In Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990), the defendant had been charged, in multiple counts, with theft and unauthorized use of credit cards, offenses which caused victim losses totaling $90,431. Although Hughey pled guilty to but one count of unauthorized use of a single credit card, which caused $10,412 in victim loss, id. at 414, 110 S.Ct. at 1981, the district court ordered $90,431 in restitution. Reversing, the Supreme Court held that the language and structure of the [VWPA] make plain Congress' intent to authorize an award of restitution only for the loss caused by the specific conduct that is the basis of the offense of conviction. Id. at 413, 422 n. 5, 110 S.Ct. at 1981, 1985 n. 5. 16 Effective November 29, 1990, Congress broadened the VWPA definition of victim, see Pub.L. No. 101-647, § 2509, 104 Stat. 4789, 4863, 4931 (Nov. 29, 1990) (Crime Control Act of 1990) (codified at 18 U.S.C. § 3663(a)(2)), thereby effectively overruling Hughey in part. Section 3663(a)(2) now provides that a victim of an offense that involves as an element a scheme, a conspiracy, or a pattern of criminal activity means any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern. 18 U.S.C. § 3663(a)(2) (emphasis added). See generally United States v. Neal, 36 F.3d 1190, 1200 (1st Cir.1994). 17 The district court ordered Gilberg to make restitution to banks other than the three FDIC-insured banks involved in the twenty-one insured loans which formed the entire basis for the conspiracy and the substantive counts upon which Gilberg was convicted. The parties agree that, under the 1987 version of the VWPA as interpreted in Hughey, the restitution order imposed on Gilberg would be improper, and that approximately $2 million would be the maximum permissible victim loss calculation. 18 The government nonetheless contends that the district court order complies with the 1990 VWPA. See Hughey, 495 U.S. at 413 n. 1, 110 S.Ct. at 1979 n. 1 (normally, the VWPA version in effect at sentencing controls). Gilberg responds that such a retroactive application of section 3663(a)(2) to his pre-November 1990 criminal conduct would violate the Ex Post Facto Clause, U.S. Const. art. I, § 9, cl. 3. See Miller v. Florida, 482 U.S. 423, 430-31, 107 S.Ct. 2446, 2451, 96 L.Ed.2d 351 (1987); see also United States v. Newman, 49 F.3d 1, 10-11 (1st Cir.1995); United States v. Cronin, 990 F.2d 663, 666 (1st Cir.1993). 19 Normally, we review restitution orders only for abuse of discretion. See United States v. Benjamin, 30 F.3d 196, 198 (1st Cir.1994); United States v. Savoie, 985 F.2d 612, 617 (1st Cir.1993). Although a timely challenge to a retroactive application of the 1990 VWPA amendments would present a question of law subject to plenary review, see, e.g., United States v. Guthrie, 64 F.3d 1510, 1514 (10th Cir.1995); DeSalvo, 41 F.3d at 511; United States v. Meacham, 27 F.3d 214, 218 (6th Cir.1994), Gilberg concedes that he did not object at sentencing. Accordingly, we review only for plain error. See United States v. Tutiven, 40 F.3d 1, 7-8 (1st Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1391, 131 L.Ed.2d 243 (1995); United States v. Rodriguez, 938 F.2d 319, 321 (1st Cir.1991). As the Rule 52(b) plain error test announced in Olano, 507 U.S. at 730-37, 113 S.Ct. at 1776-79, applies to sentencing errors, see Benjamin, 30 F.3d at 197; supra Section II.A.1, we apply the Olano plain error criteria to the forfeited victim loss calculation claim asserted by Gilberg on appeal. 4 20 a) Error 21 The first Olano criterion--that there be error, Olano, 507 U.S. at 732-34, 113 S.Ct. at 1777--is readily met here. Retroactive application of VWPA § 3663(a)(2) would violate the Ex Post Facto Clause, since it would make[ ] more burdensome the punishment for [Gilberg's ] crime[s], after [their ] commission .... Dobbert v. Florida, 432 U.S. 282, 292, 97 S.Ct. 2290, 2297, 53 L.Ed.2d 344 (1977) (emphasis added); see also United States v. Johnson, 952 F.2d 565, 585 (1st Cir.1991), cert. denied, 506 U.S. 816, 113 S.Ct. 58, 121 L.Ed.2d 27 (1992). As an order of restitution is part of the criminal sentence, we reject the suggestion that the November 1990 VWPA amendments may be applied against Gilberg. See, e.g., United States v. Jewett, 978 F.2d 248, 252-53 (6th Cir.1992) (rejecting retroactivity argument); see also United States v. Elliott, 62 F.3d 1304, 1313-14 (11th Cir.1995) (same); DeSalvo, 41 F.3d at 515 (same). 22 b) Obviousness of Error 23 The government argues that retroactive application of the 1990 VWPA amendments would not constitute obvious error, see Olano, 507 U.S. at 732-34, 113 S.Ct. at 1777, because this court had yet to weigh in on the retroactivity question by the time Gilberg was sentenced, and other courts of appeals were divided. Compare Jewett, 978 F.2d at 252-53, with United States v. Rice, 954 F.2d 40 (2d Cir.1992); United States v. Arnold, 947 F.2d 1236 (5th Cir.1991) (per curiam). We disagree. 24 The Rice and Arnold cases are factually and legally inapposite to the present context. The retroactivity issue in Rice ultimately turned on a different 1990 VWPA amendment--not implicated in our case--which provided that [t]he court may also order restitution in any criminal case to the extent agreed to by the parties in a plea agreement. 18 U.S.C. § 3663(a)(3) (emphasis added). The plea agreement in Rice expressly provided for restitution both to victims of the dismissed counts and victims of uncharged criminal conduct, Rice, 954 F.2d at 41-42, and the plea predated both the 1990 VWPA amendments and Hughey. Thus, settled Second Circuit precedent supported the expansive victim loss calculation agreed to by Rice. Id. at 44. The Second Circuit rejected Rice's ex post facto argument because (1) Rice must have relied on the more onerous Second Circuit case law, rather than on Hughey, when he agreed to the broad restitution commitment adopted in the plea agreement; and (2) section 3663(a)(3) did not retroactively enhance the punishment for an offense but merely provided that a specified type of plea agreement could be enforced from that point on. Id. 25 The Fifth Circuit employed the same analysis in Arnold, 947 F.2d at 1238 n. 2, noting that section 3663(a)(3) was not retroactive but applied prospectively to validate Arnold's [earlier] plea agreement. The government cites no apposite circuit court authority holding that section 3663(a)(2) applies retroactively to pre-November 1990 criminal conduct. 26 As the government correctly notes, we have yet to address this precise question. In Cronin, 990 F.2d at 663, the government did not contend that section 3663(a)(2) should be applied retroactively to pre-November 1990 conduct, urging instead that Hughey is distinguishable from cases involving convictions for offense[s]--like mail fraud--which require, as an essential element, proof of a broader scheme to defraud. See id. at 666; see also, e.g., 18 U.S.C. § 1341. Given the inherent breadth of the offense of conviction in Cronin, the government argued that VWPA restitution was not limited to losses caused by the particular mailings designated in the individual counts upon which the defendant was convicted, but included all victim losses occasioned by the larger fraud scheme. Noting a circuit split on the issue, we sided with the majority rule, and concluded that Hughey barred the broader restitution order. Cronin, 990 F.2d at 666; see also Newman, 49 F.3d at 11 (applying Cronin pronouncement to wire fraud conviction). 27 The implicit concessions of nonretroactivity in Cronin and Newman apparently stemmed from the government's acknowledgement that retroactive application of section 3663(a)(2) would have had no colorable basis in the decisional law construing the Ex Post Facto Clause. See id. at 11 n. 14 (noting that, [a]s the offenses occurred in 1989 and early 1990, Newman is subject to the restitution statute as it stood prior to amendment in November of 1990). Further, had this court been satisfied that the 1990 VWPA amendments were readily amenable to retroactive application in Cronin and Newman, we could have affirmed those restitutionary sentences on that alternative ground. See United States v. Alzanki, 54 F.3d 994, 1008 (1st Cir.1995), petition for cert. filed, 64 U.S.L.W. 3298 (U.S. Oct. 16, 1995) (No. 95-619) (appellate court may affirm district court on any ground supported by record); cf. also Jewett, 978 F.2d at 252 (finding that Hughey precluded broad restitution order, before addressing VWPA retroactivity question, even though the latter issue had not been addressed by parties). Based on the clear language of the 1987 VWPA and the unanimous circuit precedents rejecting the government's retroactivity claim, see supra Section II.B.3.a, we hold that the error in this case satisfied the obviousness test announced in Olano. 5 See United States v. Weiner, 3 F.3d 17, 24 n. 5 (1st Cir.1993) (noting that a circuit split may rule out a finding that forfeited error was obvious, even if First Circuit has not weighed in on issue). 28 c) Miscarriage of Justice 29 Although Olano entrusts remediation of plain error to the sound discretion of the reviewing court, the courts of appeals should not exercise their discretion unless a forfeited error results in  'a miscarriage of justice,' or  'seriously affect[s] the fairness, integrity or public reputation of judicial proceedings.'  Olano, 507 U.S. at 730-32, 113 S.Ct. at 1776 (citations omitted). 30 In all events, the VWPA expressly limits restitutionary relief to victims of [the] offense [of conviction]. 18 U.S.C. § 3662(a)(1) (emphasis added). A federal court has no inherent authority to order restitution in a criminal case; it may do so only as expressly provided by statute. DeSalvo, 41 F.3d at 511. We have noted that when the district court fundamentally departs from obvious sentencing principles, the situation corresponds mutatis mutandis to one in which a forfeited error may have caused the conviction of an innocent person, the other rubric under which a plain and prejudicial error should be noticed on appeal. United States v. Whiting, 28 F.3d 1296, 1312 (1st Cir.) (citing Olano, at 736-37, 113 S.Ct. at 1779) (emphasis added), cert. denied, --- U.S. ----, 115 S.Ct. 378, 130 L.Ed.2d 328 (1994). Given the particular circumstances of this case, and the substantial $1.6 million reduction in restitution portended by Hughey 's application, we find plain error warranting vacatur of the restitutionary sentence in this case. 6 The restitution award is reduced to $2,107,406.00, comprising the total estimated loss on the twenty-one mortgage loans designated in the indictment. 7 31 The sentence is modified to require restitution in the amount of $2,107,406. The district court judgment is affirmed, as modified.