Opinion ID: 205321
Heading Depth: 3
Heading Rank: 3

Heading: Pescatore's Challenge to the $3 Million Requirement

Text: Pescatore's contention that the Judgment is in error to the extent that it orders him to pay more than $2,559,611.79 is also subject to plain-error review and is far more problematic. In the original judgment entered in November 2003, the order that Pescatore pay restitution in the amount of $3 million did not include or incorporate any identification of Pescatore's victims or determination of each victim's loss. Hence that judgment's order that Pescatore pay restitution did not comply with the MVRA. Pescatore did not appeal to complain of that defect. More importantly, when the government asked the district court to amend the original judgment by appending the PSR Loss Chart itemizing Pescatore's victims and their losses, which would apparently bring the Judgment into compliance with § 3664(f)(1)(A), Pescatore did not ask the district court to also amend the original $3 million figure so that the restitution ordered would not exceed the $2,559,611.79 in losses listed in the Loss Chart. Nor, after the amended Judgment was filed in January 2009, did Pescatore appeal to complain that the Judgment required him to pay more in restitution than the $2,559,611.79 the government had proven in losses. Rather, he waited until October 2009 to complain of the Judgment, i.e., six months after being notified that the DOJ would not relieve him of his restitution obligation, and nine months after the Judgment was filed. Accordingly, Pescatore's present challenge to the Judgment's order that he pay $3 million in restitution cannot be sustained unless he meets the plain-error test, described in Part II.B.2. above. We conclude that he meets the first three elements of that test, but not the fourth. Given the government's concession on this appeal that it proved losses totaling only $2,559,611.79, the amended Judgment's retention of the order that Pescatore pay $3 million in restitution was error. And in light of the authorities cited above, that error is plain. Further, there can be no doubt that, at least at the time the Judgment was amended and itemized only $2,559,611.79 in losses, the error affected Pescatore's substantial rights, for it required him to pay some $440,000 more than the MVRA authorized. But these are just the threshold conditions that, if met, permit us to exercise [our] discretion to notice a forfeited error . . . only if [] the error seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings. Johnson, 520 U.S. at 467, 117 S.Ct. 1544 (internal quotation marks omitted) (emphasis added). In the present case, if Pescatore had proceeded to make timely payment of $2,559,611.79, we would, in the interest of justice, recognize that his restitution obligation was satisfied; or if he had timely paid the ordered $3 million, we would conclude that justice entitled him to a refund. In fact, however, Pescatore, without obtaining a stay of the Judgment, simply flouted it. He moved on December 22, 2009and renewed his motion on December 31, 2009for a stay of the Judgment's requirement that he pay on or before December 31, 2009; but the court did not grant a stay. Pescatore nonetheless made no payment at or before that first deadline. At the January 29, 2010 argument on Pescatore's request to reduce the restitution obligation, the courtdespite repeatedly noting that Pescatore ha[d]n't complied with the order of this court (Motion Tr. 24), was nearly 30 days overdue ( id. at 20, 23; see, e.g., id. at 24, 25), and ha[d]n't even produced a dollar in good faith ( id. at 28)granted Pescatore a new 30-day period in which to make a restitutionary payment ( see id. at 20). That 30-day period ended on March 1, 2010, and nothing in the record suggests that Pescatore made any payment by that date. After his March 1, 2010 deadline had passed, Pescatore asked this Court to grant him a stay. That motion was promptly denied on March 5. No party has informed us that Pescatore has made any payment yet. We note also that following this Court's denial of a stay, Pescatore made no effort whatever to expedite this appeal; instead he missed several filing deadlines, two of which resulted in dismissals (followed eventually by reinstatements) of the appeal. As a consequence of the lack of any urgency on Pescatore's part, this appeal was not submitted for decision until January 2011, nearly a year after the denial of his request to modify the restitution order, and more than 10 months after the expiration of the new 30-day period granted him at the January 2010 hearingwhen he was already in noncomplianceto make payment in full. Although the fact that the government had shown losses totaling only $2,559,611.79 means that the Judgment's order for restitution in the amount of $3 million was in error, it is fundamental law that that error did not give Pescatore the right simply to ignore the court's order. It is a basic proposition that all orders and judgments of courts must be complied with promptly. If a person to whom a court directs an order believes that order is incorrect the remedy is to appeal, but, absent a stay, he must comply promptly with the order pending appeal. Maness v. Meyers, 419 U.S. 449, 458, 95 S.Ct. 584, 42 L.Ed.2d 574 (1975) (emphasis added). [A]n order issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly and proper proceedings. This is true without regard even for the constitutionality of the Act under which the order is issued. United States v. United Mine Workers of America, 330 U.S. 258, 293, 67 S.Ct. 677, 91 L.Ed. 884 (1947) (footnote omitted); see, e.g., Howat v. Kansas, 258 U.S. 181, 190, 42 S.Ct. 277, 66 L.Ed. 550 (1922) (until [the] decision of a court of competent jurisdiction is reversed for error by orderly review, either by itself or by a higher court, its orders based on its decision are to be respected); SEC v. Charles Plohn & Co., 433 F.2d 376, 379 (2d Cir. 1970) (It is axiomatic that a court order must be obeyed, even assuming its invalidity, until it is properly set aside. (internal quotation marks omitted)). In light of Pescatore's election to disregard these principles and disobey the Judgment, although we agree that he cannot be compelled to pay more than $2,559,611.79 as pure restitution, we cannot conclude that he has met the final prong of the plain-error test so as to require that he be given immediate relief from the $3 million figure, for a defendant's unexcused failure to comply with a restitution order has monetary (as well as other potential) consequences. See, e.g., 18 U.S.C. §§ 3572 (penalties), 3612 (penalties and interest); 3613 (civil enforcement), 3613A ( inter alia, modification of supervised release terms; contempt of court), 3614 (resentencing). The consequences most relevant to this appeal are the accrual of interest and penalties with respect to restitution payments not made when due. If a restitution payment of more than $2,500 is not made as ordered by the court, [i]n general[, t]he defendant shall pay interest, 18 U.S.C. § 3612(f)(1). In addition, a payment of restitution is delinquent if a payment is more than 30 days late, and is in default if a payment is delinquent for more than 90 days. 18 U.S.C. §§ 3572(h) and (i). The penalties for delinquency and default are substantial: If a fine or restitution becomes delinquent, the defendant shall pay, as a penalty, an amount equal to 10 percent of the principal amount that is delinquent. If a fine or restitution becomes in default, the defendant shall pay, as a penalty, an additional amount equal to 15 percent of the principal amount that is in default. 18 U.S.C. § 3612(g) (emphases added); see also id. § 3612(i) (Payments relating to fines and restitution shall be applied in the following order: (1) to principal; (2) to costs; (3) to interest; and (4) to penalties.). These penalties for default and delinquency are not paid to the defendant's victims, but rather become assets of the United States Treasury. See Administrative Office of the United States Courts, Guide to Judiciary Policy vol. 13, § 810.50.10(a)(2) (Aug. 3, 2010) (Interest assessed on restitution is paid to the victim. Any penalty assessed on restitution is deposited into Miscellaneous Fines, Penalties, and Forfeitures Fund. . . .). Assuming that Pescatore has made no restitutionary payments during the pendency of this appeal, he has accumulated obligations of interest on the $2,559,611.79, as well as penalties that are sizeable. Thus, it is not clear that $3 million will exceed the sum of his victims's losses, the statutory interest to which the victims are entitled because of his delay in making payment, and the statutory penalties that may be applicable on account of that delay. In all the circumstances, although we agree that Pescatore cannot be compelled to pay more than $2,559,611.79 as pure restitution, we cannot conclude that he has met the final prong of the plain-error test in any way that requires that he be given immediate relief from the requirement that he pay $3 million. We note that Pescatore acknowledged in his plea allocution that his chop shop operation began in 1987 and ended in mid-2004. Thus, his victims have been without compensation for their losses for the better part of a decade, or longer. We conclude that, in light of the choices made by Pescatore throughout this case, including:  his initial agreement to pay no less than $3 million in restitution,  his failure to timely object to or appeal from the amended Judgment to challenge its retention of the $3 million restitution obligation despite the amendment identifying victims whose losses totaled only $2,559,611.79,  his failure to challenge the accuracy of the PSR Loss Chart before sentencing, at sentencing, or upon the government's request that the Loss Chart be made part of the Judgment,  his unsubstantiated challenges to the accuracy of the Loss Chart, made in conclusory fashion, more than a year late, and without even an offer of proof,  his tortoise-like pace in pursuing relief, both in the district court and on this appeal, to achieve delays that he had requested and been denied,  his decision, having repeatedly been denied a stay, simply to disobey the Judgment, and  the fact that his failure to make any payments by the court-imposed deadlines will require him to pay interest on, and expose him to the possibility of restitution-related penalties of 10 and 15 percent of, any unpaid portion of $2,559,611.79, we conclude that the interests of justice, fairness, and the public reputation of judicial proceedings are best served if Pescatore remains required to make the ordered $3 million payment, subject to his right to a refund of any moneys remaining after his victims have been paid restitution, with interest, and after whatever applicable restitution-related penalties have been satisfied.