Opinion ID: 683222
Heading Depth: 4
Heading Rank: 1

Heading: ex post facto effect of 1990 VWPA amendment.

Text: 43 The version of the VWPA in effect at the time of DeSalvo's sentencing would normally control. Hughey v. United States, 495 U.S. 411, 413 n. 1, 110 S.Ct. 1979, 1981 n. 1, 109 L.Ed.2d 408 (1990). DeSalvo contends, however, that the District Court's application of the post-amendment version of the VWPA to her case 3 violated the U.S. Constitution's ex post facto clause. 4 DeSalvo's contention is based on a claim that the conduct underlying her conviction, and upon which she was indicted, had ended by the effective date of the 1990 amendment. Should we find that the 1990 amendment did effect a substantive change in the law of restitution and that DeSalvo's underlying conduct had ended by the time the amendment took effect, it is clear that the District Court's sentencing order would be a violation of the ex post facto clause, and thus, would have to be vacated for resentencing under the pre-amendment VWPA. See Miller v. Florida, 482 U.S. 423, 430, 107 S.Ct. 2446, 2451, 96 L.Ed.2d 351 (1987) (noting that for the ex post facto prohibition to apply, the law must apply to events occurring before its enactment and must disadvantage the offender affected by it); United States v. Baker, 25 F.3d 1452, 1457 n. 7 (9th Cir.1994) (noting that if the 1990 amendment to the VWPA effected a substantive change, it could not be invoked in sentencing for conduct taking place before that date). 44 In order to find a violation of the ex post facto clause, we will first have to find that the conduct underlying DeSalvo's conviction terminated before November 29, 1990 (the amendment's effective date). Second, we will have to determine that the amendment effected a substantive change in the law, subjecting DeSalvo to the possibility of a harsher penalty than was provided for under the pre-amendment law. See Dobbert v. Florida, 432 U.S. 282, 292, 97 S.Ct. 2290, 2298, 53 L.Ed.2d 344 (1977). 45
46 To determine whether the District Court's use of the amended version of the VWPA violated the ex post facto clause, we must examine the indictment itself to determine when the charged conduct took place. DeSalvo argues that the conduct underlying her conviction, as charged in the Government's indictment, ended in October, 1990, prior to the effective date of the 1990 amendment to the VWPA (November 29, 1990). Thus, she claims that the District Court should have sentenced her to restitution under the pre-amendment statute, which would have limited restitution to the loss attributable to the specific conduct underlying the conviction, that is, $68,384.36. See United States v. Sharp, 941 F.2d 811, 815 (9th Cir.1991). The Government responds to DeSalvo's contention by asserting that the conduct charged in its indictment continued through October, 1990 and into 1991, beyond the effective date of the 1990 amendments to the VWPA. 47 In DeSalvo's indictment, the preamble to both the conspiracy to defraud, and the mail fraud charges reads the same: Beginning at a date unknown to the Grand Jury but not later than April 23, 1990 and continuing through October 1990 in the State and Northern District of California and elsewhere ... 5 DeSalvo contends that this language in the indictment indicates that the conduct underlying her conviction was over by the end of October, 1990, one month before the effective date of the 1990 amendments to the VWPA. This is thus the basis for her ex post facto claim. 48 The Government counters by making two assertions: (1) that the word through as used in the indictment means continuing past October, 1990, and (2) that additional language specific to the mail fraud charges indicates that the indictment did contain allegations of conduct continuing past the November 29, 1990 effective date of the VWPA amendment. 49 Rule 7(c) of the Federal Rules of Criminal Procedure requires that an indictment be a plain, concise, and definite written statement of the essential facts constituting the offense charged. Fed.R.Crim.P. 7(c)(1). The indictment should be read in its entirety, construed according to common sense, and interpreted to include facts which are necessarily implied. United States v. Givens, 767 F.2d 574, 584 (9th Cir.), cert. denied, 474 U.S. 953, 106 S.Ct. 321, 88 L.Ed.2d 304 (1985); United States v. Anderson, 532 F.2d 1218, 1222 (9th Cir.), cert. denied, 429 U.S. 839, 97 S.Ct. 111, 50 L.Ed.2d 107 (1976). When, as in this case, a defendant does not challenge the sufficiency of the indictment until after the verdict, the court will generally review it under a more liberal standard. 6 See United States v. Zavala, 839 F.2d 523, 530 (9th Cir.), cert. denied, 488 U.S. 831, 109 S.Ct. 86, 102 L.Ed.2d 62 (1988). 50 The Government's contention that use of the phrase through October, 1990 in the indictment should be interpreted as meaning at least through October, 1990 is plausible, if not readily apparent. The Government supports its interpretation by citing additional language in the indictment charging DeSalvo with mail fraud. Specifically, the indictment alleged that it was a part of the [mail fraud] scheme to cease operations of H.W. Care [HWC] after a sufficient number of 'lost charge audits' drew regulatory scrutiny and to recommence the scheme using fictitious business names. The Government argues that since it is uncontested DeSalvo did recommence business under a different name in 1991, the scheme alleged in the indictment continued past the effective date of the 1990 VWPA amendment, and the amended version of the Act should therefore apply. 51 While the Government's interpretation of the indictment may be reasonable, some courts have expressed particular concern with the sufficiency of an indictment when it alleges the existence of a scheme, and such a scheme is an element of the crime with which a defendant is charged. 7 In the context of a restitution order, the Seventh Circuit, in United States v. Bennett, 943 F.2d 738 (7th Cir.1991), stated: The scheme concept is by its nature an amorphous one, and may only support an award of restitution if it is defined with specificity. A contrary rule would allow vague allegations of a scheme to support restitution based upon broad, unsubstantiated conduct. Id. at 741; see also United States v. Turino, 978 F.2d 315, 318 (7th Cir.1992) (stating that in order to sentence a defendant to pay restitution, the initial indictment must specifically define the fraud scheme), cert. denied, --- U.S. ----, 113 S.Ct. 2969, 125 L.Ed.2d 668 (1993); United States v. Brothers, 955 F.2d 493, 497 (7th Cir.) (same), cert. denied, --- U.S. ----, 113 S.Ct. 142, 121 L.Ed.2d 94 (1992). The Seventh Circuit's restrictive reading of the indictment in restitution sentences stems from the Supreme Court's holding in Hughey v. United States that the conduct underlying the offense of conviction establishes the outer limits of a restitution order. 495 U.S. 411, 420, 110 S.Ct. 1979, 1984, 109 L.Ed.2d 408 (1990). 52 Thus, unless the mail fraud scheme on which DeSalvo was indicted was described in sufficient detail in her indictment, restitution based on that scheme must be restricted. As to the Government's claim that a broader scheme should be implied, the Hughey Court's restrictive interpretation of the VWPA precludes such speculative awards. Bennett, 943 F.2d at 741. 53 Recognizing the special concerns raised by restitution awards in the context of mail fraud, we adopt the Seventh Circuit's approach and read DeSalvo's indictment narrowly. 8 This approach places the burden on the Government, which has control over the drafting of the indictment, to include language sufficient to cover all acts for which it will seek restitution. More importantly, a restrictive reading will prevent the Government from using vague allegations of a scheme to support restitution based upon broad, unsubstantiated conduct. Bennett, 943 F.2d at 741. In the present case, the Government gives no justification for its failure to specifically allege that the scheme on which it was indicting DeSalvo continued into 1991. Nor does it support its contention that the phrasing April 23, 1990 and continuing through October 1990  indicated an intent to cover conduct in 1991, other than by saying that such an interpretation is a plausible one. Adopting the Seventh Circuit's rationale for giving an indictment alleging a scheme a restrictive reading, the Government's interpretation must fail. 54 We therefore interpret DeSalvo's indictment as alleging a scheme ending in October, 1990, before the effective date of the 1990 VWPA amendment. So finding, the District Court should have applied the pre-amendment version of the VWPA, assuming as discussed below, that the amendment effected a substantive change in the law of restitution and thereby subjected DeSalvo to the possibility of a harsher sentence. 55
56 In Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990), the Supreme Court held that under the pre-1990 amendment version of the VWPA, restitution could only be ordered for the loss caused by the specific conduct that is the basis of the offense of conviction. Id. at 413, 110 S.Ct. at 1981. The Defendant in Hughey was indicted on several counts of unauthorized credit card use and several counts of theft by a postal worker. After pleading guilty to a single count of unauthorized credit card use, Hughey was nonetheless sentenced to restitution for all of the charges underlying his indictment. Id. at 413-14, 110 S.Ct. at 1981-82. The Supreme Court's decision overturning this broad restitution sentence left open the question of how broad a restitution sentence could be imposed when the conduct of which a defendant was convicted involved a criminal scheme or conspiracy. See United States v. Cronin, 990 F.2d 663, 666 (1st Cir.1993). Taking the position of a majority of other circuits, we interpreted Hughey to say that even where the offense of conviction involves a conspiracy or scheme, restitution must be limited to the loss attributable to the specific conduct underlying the conviction. United States v. Sharp, 941 F.2d 811, 815 (9th Cir.1991); see also United States v. Pivorotto, 986 F.2d 669, 673 n. 5 (3d Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 90, 126 L.Ed.2d 58 (1993); United States v. Jewett, 978 F.2d 248, 252 (6th Cir.1992); United States v. Wainwright, 938 F.2d 1096, 1097-98 (10th Cir.1991); United States v. Stone, 948 F.2d 700, 703-04 (11th Cir.1991). But see United States v. Bennett, 943 F.2d 738, 741 (7th Cir.1991) (interpreting Hughey to say that restitution could be awarded for injuries caused by a criminal scheme that were not part of the specific offense underlying the conviction). 57 When Congress amended the VWPA in 1990, it appeared to overrule this Court's decision in Sharp. 18 U.S.C. Sec. 3663(a)(2); see United States v. Soderling, 970 F.2d 529, 533 n. 8 (9th Cir.1992). The relevant provision of the 1990 VWPA amendment states, 58 For the purpose of restitution, 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. 59 18 U.S.C. Sec. 3663(a)(2). Section (a)(2) acts to clarify the definition of victim in Section (a)(1), which states, The court, when sentencing a defendant convicted under this title ... may order, in addition to ... any other penalty authorized by law, that the defendant make restitution to any victim of such offense. 18 U.S.C. Sec. 3663(a)(1). 60 Most cases examining the impact of the 1990 VWPA amendment have found that it effected a substantive expansion of the previous law of restitution, in that it partially overruled the Supreme Court's restrictive interpretation of the VWPA in Hughey. United States v. Cronin, 990 F.2d 663, 666 (1st Cir.1993) (noting that Congress has amended the statute in favor of broad restitution); United States v. Jewett, 978 F.2d 248, 252 (6th Cir.1992) (same); United States v. Seligsohn, 981 F.2d 1418, 1422 (3d Cir.1992) (noting that the 1990 amendment was intended to change the Hughey interpretation of the statute by enlarging the courts' power to order restitution beyond that permitted by Hughey ); United States v. Arnold, 947 F.2d 1236, 1237 & n. 1 (5th Cir.1991) (suggesting that the 1990 amendment increased the restitution penalty available). But see United States v. Welsand, 23 F.3d 205, 207 (8th Cir.1994) (stating that the 1990 amendment does not explicitly extend the contours of the word 'offense' ). We have previously acknowledged in dicta the substantive impact of the 1990 VWPA amendment, United States v. Jackson, 982 F.2d 1279, 1282 n. 1 (9th Cir.1992) (noting that this Court's restrictive interpretation in Sharp has been overruled by the 1990 VWPA amendment). 61 Thus, the consensus of courts addressing the issue is that the 1990 VWPA amendment did have a substantive impact on the amount of restitution a court could order when a defendant is convicted of an offense involving a scheme, conspiracy, or pattern. Despite some statements to the contrary, see United States v. Baker, 25 F.3d 1452, 1457 n. 7 (9th Cir.1994), and Welsand, 23 F.3d at 207, we will accept the majority view that the 1990 VWPA amendment did have a substantive impact on the law of restitution. 62 Finding that the conduct DeSalvo was charged with did not continue past the effective date of the 1990 amendment to the VWPA, and that that amendment did have a substantive impact on the law of restitution, we must reverse the restitution order imposed as part of DeSalvo's sentence in that it violates the ex post facto clause of the United States Constitution. 9 Thus, DeSalvo's restitution sentence in the amount of $970,166.75 shall be overturned and the case be remanded to the District Court for resentencing pursuant to the pre-amendment version of the VWPA.