Court Opinion

ID: 172969
Source: CourtListenerOpinion
Date Created: 2010-08-14 19:03:21+00
Date Added: 2024-06-11T17:25:22.456915
License: Public Domain

FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                December 15, 2009
                   UNITED STATES COURT OF APPEALS
                                                Elisabeth A. Shumaker
                                                                    Clerk of Court
                                TENTH CIRCUIT

 UNITED STATES OF AMERICA,

              Plaintiff - Appellee,                      No. 09-3087
 v.                                                       (D. Kansas)
 LARRY W. WILLIAMS,                          (D.C. No. 6:08-CR-10199-1-WEB-1)

              Defendant - Appellant.

                           ORDER AND JUDGMENT *

Before HENRY, ANDERSON, and TYMKOVICH, Circuit Judges.

      On September 16, 2008, Larry W. Williams was charged with one count of

wire fraud, in violation of 18 U.S.C. § 1343. More specifically, the Indictment

charged Mr. Williams with using his position at Molded Fiber Glass Construction

Company (“MFGCC”) to fraudulently manipulate MFGCC’s payroll records to

inflate the amount of money owed to him, and he then caused funds to be

transferred electronically from MFGCC into several bank accounts owned by him.

      *
        This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
The Indictment alleged Mr. Williams thereby illegally obtained the sum of

$719,529.32.

      Mr. Williams pled guilty on January 15, 2009, and was sentenced to thirty-

three months’ imprisonment and assessed restitution in the amount of

$744,529.32. Mr. Williams appeals the amount of restitution ordered, arguing

that two errors made the restitution amount larger than it should be. Because we

agree with Mr. Williams as to one of the errors, we reverse the order of restitution

and remand this matter to the district court to enter a correct restitution amount in

accordance with this opinion.

                                  BACKGROUND

      As indicated above, Mr. Williams pled guilty to one count of wire fraud.

He filed a Petition to Enter Plea of Guilty, in which he admitted that he

“transmitted or caused to be transmitted, via electronic wire fund transfer the

approximate sum of $719,529.32 from the payroll account of MFGCC to an

account owned by me, in violation of Title 18, United States Code, § 1343.”

Petition at 1-2, R. Vol. I at 8-9. Mr. Williams’ Plea Agreement contained the

following factual recitation of the basis for his guilty plea:

             Beginning in August of 1999 and continuing through July 26,
      2006, in the District of Kansas, Larry Williams was the controller of
      Molded Fiber Glass Construction Company (MFGCC). While in this
      position Larry Williams was responsible for maintaining the payroll
      records of MFGCC. While serving in this capacity, Larry Williams

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      inflated the amount of money owed to him by his employer and
      caused electronic fund transfers from the payroll account of MFGCC
      into one of several bank accounts owned by Larry Williams. The
      government claims, but the defendant does not admit, that the total
      amount of loss suffered by MFGCC is $ 719,529.32. The defendant
      will object to claims based upon the statute of limitations in addition
      to factual reasons why he is not liable for certain claims.

Plea Agreement at ¶ 2, R. Vol. 1 at 16.

      In preparation for sentencing under the United States Sentencing

Commission, Guidelines Manual (“USSG”), the United States Probation Office

prepared a presentence report (“PSR”). The PSR stated that the amount of

restitution should be $744,529.32, which was based upon a statement from

MFGCC’s insurance carrier that it had paid a claim in that amount. See PSR at

¶ ¶ 83-86, R. Vol. II at 17. Mr. Williams objected to the PSR restitution

calculation, since that loss amount was different from that identified

($719,529.32) in the Indictment, the Petition to Enter Plea of Guilty and the Plea

Agreement, and because he claimed it included amounts which should be

excluded. More particularly, Mr. Williams argued that restitution in the amount

of $719,529.32 was unlawful because $129,728.78 of that loss was barred by the

statute of limitations since it represented losses attributable to conduct occurring

prior to August of 2003. He further argued that the losses identified as relating to

the MFG Trust Fund, in the amount of $5,208.29, and the CITI account, in the

amount of $13,300, should be excluded from the restitution order because he had

no knowledge of either one of those accounts.

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      At Mr. Williams’ sentencing hearing, the district court announced its

intention to enter a restitution order against Mr. Williams in the sum of

$744,329.32, although the court noted Mr. Williams’ objections to that amount.

The government conceded that it did not have any evidence to present in support

of the losses to the MFG and the CITI accounts (totaling $18,508.29), nor any

evidence explaining the difference between the loss identified in the PSR and the

loss identified in the Indictment, Petition to Enter Guilty Plea and the Plea

Agreement. 1

      Mr. Williams reiterated his objection, based on the statute of limitations, to

including any losses occurring prior to August of 2003 (i.e., $129,728.78). The

district court found that the statute of limitations did not bar a restitution order for

the pre-August 2003 losses and overruled Mr. Williams’ objection regarding the

MFG Trust Fund and the CITI accounts. The court subsequently ordered

Mr. Williams to pay restitution in the sum of $744,529.32. This appeal followed.

      As indicated above, Mr. Williams makes two arguments in support of his

claim that the district court erred in assessing restitution at $744,329.32: (1) the

      1
       The record in this case is, quite frankly, somewhat confusing as to how
certain monetary figures were derived. And while the government’s concession
referred to in text is not nearly as clearly stated in the record of the sentencing
hearing, we take comfort from the government’s statement in its brief that, at the
sentencing hearing, “[t]he government announced that it did not have any
evidence to present in support of the losses to the MFG Trust Fund and the CITI
accounts, $18,508.29, nor upon the difference between the loss identified in the
PSR and the Indictment, Petition to Enter Guilty Plea and Plea Agreement.”
Appellee’s Br. at 3.

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government presented no evidence regarding the difference between the loss

identified in the PSR and the loss identified in the pleadings, nor in support of the

losses to the MFG Trust Fund or the CITI account; and (2) the statute of

limitations bars holding Mr. Williams responsible for $129,728.78 of the total

loss. We agree with the first argument and disagree with the second.

                                   DISCUSSION

      “Generally, we review the district court’s application of the Mandatory

Victims Restitution Act de novo, review its factual findings for clear error and

review the amount of restitution awarded for abuse of discretion.” United States

v. James, 564 F.3d 1237, 1242 (10th Cir. 2009) (quoting United States v. Gallant,

537 F.3d 1202, 1247 (10th Cir. 2008) (footnote omitted)).

      I. MFG Trust Fund/CITI Account:

      This issue is easily resolved, as the government agrees that the claimed

losses relating to the MFG Trust Fund and the CITI account should not have been

included in the restitution order, because the government failed to present any

evidence of such losses. Furthermore, the government also agrees that the district

court erred in including in the restitution order the difference between the amount

stated in the pleadings ($719,529.32) and the amount stated in the PSR and

adopted by the district court ($744,529.32). With that error corrected, we leave it

                                          -5-
to the district court to make a precise calculation of the restitution award. We

remind the court, however, that “[a] restitution order must be based on actual

loss, which the government bears the burden of proving.” United States v.

Parker, 553 F.3d 1309, 1323 (10th Cir. 2009). And although a district court may

accept any undisputed portion of a defendant’s PSR as a finding of fact, United

States v. Robertson, 568 F.3d 1203, 1214 (10th Cir. 2009), it may not do so for

disputed portions of the PSR. United States v. Orr, 567 F.3d 610, 615 (10th Cir.

2009) (holding that the district court may not rely on facts alleged in the PSR, if

the government’s evidence does not support those allegations). We now turn to

whether any part of that total amount should be excluded on statute of limitations

grounds.

      II. Statute of Limitations:

      The Indictment in this case was filed in September 2008. Under 18 U.S.C.

§ 3282(a), a five-year statute of limitations applies. Accordingly, Mr. Williams

argues that any restitution for activities occurring before August of 2003 is barred

by the statute of limitations. The district court rejected this argument, holding

that the “Indictment charged the defendant with engaging in wire transmissions as

part of a scheme to defraud . . . [and that] when the defendant is convicted of a

crime in which a scheme is an element, the court under Section 3663A must order

the defendant to pay restitution for all losses the victims suffered as a direct result

                                          -6-
of the scheme, even if the losses were caused by conduct outside the statute of

limitations.” Mem. & Order at 2, R. Vol. 1 at 24 (citing United States v.

Dickerson, 370 F.3d 1330 (11th Cir. 2004)). We agree with the district court for

the reasons it provided. See United States v. Valladares, 544 F.3d 1257, 1269

(11 th Cir. 2008) (“[T]his Court [has] interpreted the statutory definition of

‘victim’ in § 3663A(a)(2) with respect to the crime of wire fraud and held that the

district court ‘must . . . order the defendant to pay restitution to all victims for the

losses they suffered from the defendant’s conduct in the course of the scheme,

even where such losses were caused by conduct outside the statute of

limitations.”) (quoting United States v. Dickerson, 370 F.3d 1330, 1342 (11th Cir.

2004)).

          Additionally, however, we conclude that Mr. Williams’ pre-August 2003

conduct may not be outside the statute of limitations. In his Petition to Enter Plea

of Guilty and in his Plea Agreement, Mr. Williams admitted that “[b]eginning in

August of 1999 and continuing through July 26, 2006," he “devised a scheme” to

defraud his employer. See Petition to Enter Plea at 1, R. Vol. 1 at 8 (emphasis

added). By his own admission, Mr. Williams’ scheme was ongoing, and “the

statute of limitations is no bar if there is an ongoing scheme continuing into the

five year period.” United States v. Jensen, 608 F.2d 1349, 1355 (10th Cir. 1979).

      Mr. Williams argues we should examine individual discreet transactions to

determine whether any of the loss is time-barred, citing United States v.

                                          -7-
Reitmeyer, 356 F.3d 1313 (10th Cir. 2004), in support thereof. Reitmeyer is, as

the government points out, distinguishable from Mr. Williams’ situation.

Reitmeyer involved the Major Fraud Act, 18 U.S.C. § 1031(a)(1). That Act

“prescribes fines and imprisonment under certain circumstances for ‘[w]hoever

knowingly executes, or attempts to execute, any scheme or artifice with the

intent-(1) to defraud the United States; or (2) to obtain money or property by

means of false or fraudulent pretenses, representations, or promises.’” Reitmeyer,
356 F.3d at 1317 (quoting 18 U.S.C. § 1031(a)). Accordingly, “[u]nder the plain

language of the Act, an offense is each knowing ‘execut[ion]’ or ‘attempt[ed]

execu[tion]’ of a scheme of artifice to defraud.” Id. The Act thus focuses on

“executions” of a scheme. See id. (“the Act contemplates prosecution of multiple

counts when there are multiple ‘executions’ of a single scheme.”).

      The Wire Fraud statute at issue in this case, by contrast, focuses on the

scheme itself, and not individual executions of that scheme. Thus, Mr. Williams

admitted to devising a scheme, pursuant to which he defrauded his employer of

money during the period of time covering August of 1999 until he was caught in

July of 2006. Mr. Williams’ offense was a continuing offense, whereas “the

‘execution’ of a scheme under the Major Fraud Act is not a ‘continuing offense’

for statute of limitations purposes.” Id. at 1322. We therefore hold that the

district court properly concluded that Mr. Williams perpetrated a single fraudulent

scheme upon his employer and that he must pay restitution for all losses suffered

                                         -8-
by MFGCC. Because we found error in the precise calculation of the restitution

amount, we remand this matter to the district court to ascertain and impose a

corrected restitution amount.

                                   CONCLUSION

      For the foregoing reasons, we REVERSE and REMAND for further

proceedings consistent herewith.

                                              ENTERED FOR THE COURT

                                              Stephen H. Anderson
                                              Circuit Judge

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