Opinion ID: 2738168
Heading Depth: 2
Heading Rank: 3

Heading: Calculation of Loss and Restitution Amounts

Text: Defendant asserts that the district court imposed a procedurally unreasonable sentence by improperly calculating loss and restitution amounts owed to the BWC, SSA, and Ohio Edison.
“Whether imposition of restitution is permissible under the circumstances is reviewed de novo, but the amount of restitution is reviewed for abuse of discretion.” United States v. Kumar, 750 F.3d 563, 566 (6th Cir. 2014). See also United States v. Wendlandt, 714 F.3d 388, 393 (6th Cir. 2013) (internal quotation marks omitted) (this Court “review[s] a district court’s sentence for abuse of discretion, whether inside, just outside, or significantly outside the Guidelines range, and for both procedural and substantive reasonableness.”). We may only find that an abuse of discretion occurred if “a ruling is based on an error of law or a clearly erroneous finding of fact, or when the reviewing court is otherwise left with the definite and firm conviction that the district court committed a clear error of judgment.” Kumar, 750 F.3d at 566. In making such a determination, this Court “review[s] the district court’s factual findings for clear error and its legal conclusions de novo.” United States v. Angel, 576 F.3d 318, 320 (6th Cir. 2009). Restitution is used as a remedy “not to punish the wrongdoer, but to restore the victim, whose recovery is therefore limited to actual losses proximately caused by the wrongdoing.” Kumar, 750 F.3d at 567. In fact, “[t]he restitution statutes authorize restitution for losses to victims and ‘require[] that the restitution award be based on the amount of loss actually caused 28 No. 13-3315 by the defendant’s offense.’” United States v. Healy, No. 11-CR-138-KKC, 2012 WL 3483296, at  (E.D. KY Aug. 13, 2012) (quoting Boring, 557 F.3d at 713) (brackets in original). Defendant alleges that the district court improperly calculated the amount of loss suffered by BWC, Ohio Edison, and the SSA, which led to an inaccurate offense level computation and an inappropriately high restitution award. On the other hand, “[t]he method used to calculate loss is reviewed de novo.” Wendlandt, 714 F.3d at 393. “When applying section 2B1.1(b)(1) to determine the amount of loss, the district court need only make a reasonable estimate of the amount” based on the available evidence. United States v. Jones, 641 F.3d 706, 712 (6th Cir. 2011) (internal quotation marks omitted). The government’s burden before the district court was to prove the amount of loss by a preponderance of the evidence. Id. “[A] trial court’s finding as to amount [of loss] will be upheld on appeal unless ‘outside the universe of acceptable computations.’” United States v. Poole, No. 98-6606, 188 F.3d 510 (table) 1999 WL 644147 at  (6th Cir. 1999) (quoting United States v. Fleming, 128 F.3d 285, 287 (6th Cir. 1997)). Finally, as Defendant points out, “[a]n error with respect to the loss calculation is a procedural infirmity that typically requires remand.” Warshak, 631 F.3d at 328 (6th Cir. 2010)).
The district court examined the record before calculating the loss amount in this case. The court stated, I do find by a preponderance of the evidence supports the Government’s position in regard to the fact that they not only zero in on a specific period and not the whole period, which Ms. Stephens-Miller received benefits, but that also there was sufficient evidence in the record from trial testimony, and as suggested by the Assistant United States Attorney, to support the fact that during the period in question that she was able to work. This was not a one-day or a two-day kind of thing, but it was something she did throughout the period, which they focused on. 29 No. 13-3315 Some of that came from her; some of it came from other items of evidence, and some of it came from the surveillance. Even though it was a limited period of surveillance, it produced evidence that went beyond that period. So I find that a preponderance of the evidence does support a finding that should be the ten-level enhancement. (R. 94, 3/12/2013 Sentencing Tr., at PageID# 722–23.) The court adopted the loss amount calculations set forth in the PSR to find that the victims (SSA, BWC, and Ohio Edison) lost $170,047.47 between August 1996 and June 2008 due to Defendant’s misrepresentations regarding her ability to work.6 With that in mind, the district court started out with a base offense level of 7, and then added ten levels pursuant to U.S.S.G. § 2B1.1(b)(1)(f), which states that ten levels are to be added where the loss amount is more than $120,000. The district court varied downward to ten months of imprisonment and three years of supervised release for each charge, to run concurrently. Additionally, the district court awarded restitution in the amount of $170,047.47. Defendant asserts that the district court erred in adopting the total amount of loss from the PSR. First, she claims there is insufficient evidence of her work-related conduct during the entire period from 1996 through 2008 for the district court to have found by a preponderance of the evidence that she was entitled to absolutely no benefits during that period. Specifically, Defendant claims that because the stores were not open all day, every day throughout the twelveyear period, because the government did not conduct surveillance during the entire period, because she did not receive compensation for whatever work she did complete during that time, and because there was no expert testimony presented by the government to assess a monetary 6 Specifically, the PSR stated that the impact on the victims consisted of the following amounts: $18,083.00 from the SSA between 2006 and 2008, $88,075.08 from BWC from September 1, 1996 through the termination of benefits in 2008, and $63,259.39 from Ohio Edison between September 1, 1996 and the termination of benefits in 2008. 30 No. 13-3315 value to her conduct in the stores, “[t]he suggested total loss calculation is overstated and predicated upon the mistaken belief that [Defendant] consistently engaged in prohibited volunteer or work activity” during the period in question. Pet’r’s Br. at 45. Defendant does not point to any authority from this Court or any other court requiring the government to establish a monetary value through expert testimony. Instead, the sentencing judge need only make a reasonable estimate, and “is in a unique position to assess the evidence and estimate the loss based upon that evidence.” United States v. Josic, 324 F. App’x 472, 477 (6th Cir. 2009) (quoting U.S.S.G. § 2B1.1 cmt. 3(C)). During Defendant’s trial, the government presented a great deal of evidence suggesting that Defendant was not entitled to any benefits during the latter portion of the twelve-year period, from 2005 through 2008. Although there is much less evidence available in the record regarding her activity from 1996 through 2005, we must review the district court’s assessment of the evidence and estimation of the loss amount for an abuse of discretion, and there appears to be enough evidence in the record to establish that Defendant worked throughout the relevant time period. In 2006, Defendant admitted to the BWC undercover agents that she had been running her store for nine years, and that admission thus covers the period from approximately 1997 through 2006, when the BWC’s investigations began. Her own statement, therefore, demonstrates that Defendant was at least able to and did do some amount of work during that time period. Dawkins testified that on a number of occasions before 2004, she and her daughter went to the store to purchase some African clothes for her daughter’s wedding. On each occasion, Defendant met her at the store and assisted her as she shopped, and Defendant made and sold to her the crown used in her daughter’s wedding. Dawkins also stated that Defendant made an offer in 2000 to go into business with her when the store was located on North Main. 31 No. 13-3315 (Id.) Also in the record and described above is Bryant’s testimony regarding the 1996 “Brides of Color” magazine, which featured Devotice’s products and a gown that was designed by Defendant herself. Although Defendant asserts in her brief that the government failed to present any evidence that Defendant volunteered or worked in any store between 1998 and 20057, her admission to Bryant that the store had been operating for the past nine years and the fact that Dawkins purchased articles from Defendant sometime before 2004 indicates that she did, in fact, work or volunteer during that time period. While there is no evidence in the record to demonstrate that Defendant received remuneration during this time, that is not relevant for determining whether Defendant was working or able to work. In fact, neither Defendant nor Dawkins received remuneration for their work in the store during the relevant time period. Although Defendant and Dawkins were in the business because they “enjoyed the fashion,” Dawkins explained that she “knew that in five years [she] figured it would be making some money somewhere along the line, but at that particular time, no, it did not matter then because [she] was working towards that goal.” (R. 122, 12/7/2012 Trial Tr., at 1548–49.) Although Barbara Marshall, a supervisor of health and absence management at Ohio Edison, testified that “work would be any type of employment where an individual’s providing a service or consultation, an occupation, business, where they’re receiving some form of remuneration for the service,” (R. 121, 12/6/2012 Trial Tr., at PageID# 1226), Michael Pagan, an operations supervisor at the SSA, testified that even if an individual does not receive any income, the SSA can still calculate the value of work. He explained that “work [put] into a business is still going to have some value, even if the company’s taking a net loss for the 7 Defendant’s witnesses indicated that Devotice closed in 1998 and did not reopen until 2005. 32 No. 13-3315 year, it’s still going to have some value. It’s still considered work and we’ve got to figure out whether or not it’s substantial or not because if it’s substantial you no longer meet the definition of disability.” (Id. at PageID# 1251) Based on the evidence available to the court, a reasonable inference could have been made that neither Dawkins nor Defendant were paid for their work because they were reinvesting money in the store to grow the store’s business and eventually turn a profit. And this could still qualify as work. The relevant consideration is whether Defendant was able to and did work during the time period, not whether she worked a full-time or part-time job. Had Defendant been able to produce records indicating that she only worked part-time, the district court could have considered those records in making its loss-amount calculation. Instead, Defendant did not present any evidence indicating the amount of time she spent working or volunteering in the store. The government put forth some evidence that Defendant was taking responsibility for the store at various points during the period from 1996 through 2008; the court assessed this information, and adopted the calculation set forth in the PSR. Although the government did not present evidence that Defendant worked every day during that twelve-year period, there was sufficient evidence for the court to find by a preponderance of the evidence that Defendant was able to work from 1996 through 2008 and that “[t]his was not a one-day or a two-day kind of thing, but it was something she did throughout the period.” (R. 94, 3/12/2012 Sentencing Tr., at PageID# 723.) Second, Defendant claims that even if she was only entitled to some of the benefits she received from 1996 through 2008, this Court’s decisions in Boring and United States v. Waldren, 431 F. App’x 374 (6th Cir. 2011), require the district court to adjust the loss amount calculation. Defendant argues that “[t]he suggested total loss calculation is overstated and predicated upon 33 No. 13-3315 the mistaken belief that [Defendant] consistently engaged in prohibited volunteer or work activity” during the entire period in question. Pet’r’s Br. at 45. Boring and Waldren require the district court to calculate a restitution award “equal to the total amount [Defendant] received minus the amount [s]he received when [s]he was legitimately . . . unable to work. Boring, 557 F.3d at 713. “The rationale behind [the Boring] decision was that restitution must account for loss that was actually caused by the defendant’s false statements.” Waldren, 431 F. App’x at 378. This does not necessarily require an offset in all cases. In the instant case, the jury convicted Defendant based on her conduct charged in the indictment, for which there was evidence to demonstrate that Defendant was able to work to some extent during the relevant time period. (R. 1, Indictment, at PageID# 3 (“Beginning on or about September 1, 1996, to June 7, 2008, . . . the defendant, BERNICE D. STEPHENSMILLER, devised and intended to devise a scheme and artifice to defraud and obtain money and property from Ohio BWC by means of false and fraudulent pretenses, representations and promises.”).) This is the period during which she was not entitled to benefits. In Boring, the district court initially calculated the restitution amount as the entire amount lost over the period of time while the defendant received benefits. This Court held that the calculation was improper because there was a period of time within that larger period during which the defendant was actually entitled to receive benefits. Therefore, the Boring Court remanded the case because “[t]he district court may not include in its calculation of a restitution award the worker’s compensation payments to which Boring was legitimately entitled, since those do not constitute losses to the victim and thus are not properly the subject of restitution.” 557 F.3d at 714. 34 No. 13-3315 In the instant case, the district court only calculated the restitution amount based on the amount lost by the victims during the time for which the jury convicted. The “offset” had already occurred because the district court did not award restitution for all of the benefits Defendant received between 1976, when she first began receiving benefits, and 2008. Defendant carried the burden of “persuading th[e] Court that the evaluation of the loss was not only inaccurate, but outside the realm of permissible calculations.” United States v. Gray, 521 F.3d at 543. Defendant has failed to carry this burden, and because we may only reverse under the abuse of discretion standard if we are “left with the definite and firm conviction that the trial court committed a clear error of judgment,” United States v. Batti, 631 F.3d 371, 379 (6th Cir. 2011), we must affirm the district court’s loss calculation because it was not outside the realm of permissible calculations. III.