Court Opinion

ID: 11968
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:09:31+00
Date Added: 2024-06-11T13:32:46.604227
License: Public Domain

REVISED
                 IN THE UNITED STATES COURT OF APPEALS

                               FOR THE FIFTH CIRCUIT

                               _____________________

                                    Nos. 96-30641
                                         96-30699
                                         96-30700
                                  Summary Calendar
                               _____________________

UNITED STATES OF AMERICA,

                                                          Plaintiff-Appellee,

                                      versus

CONNIE S. LEWIS, PATSY E. LEWIS, and
MARION FRANCIS RICHEY,

                                           Defendants-Appellants.
_________________________________________________________________

     Appeals from the United States District Court for the
                  Western District of Louisiana
________________________________________________________________

                                 December 11, 1996

Before GARWOOD, JOLLY, and DENNIS, Circuit Judges.

PER CURIAM:
      Appellants Connie S. Lewis, Patsy E. Lewis, and Marion Francis

Richey pled guilty to charges arising from a long-standing food

stamp fraud scheme.           The Lewises’ two sons, Jason and Carson, also

pled guilty; they do not appeal.            Following a sentencing hearing,

the   district        court    sentenced    the   five   defendants   to   make

restitution      to     the    Department    of   Agriculture,   among     other

penalties.    Connie Lewis and his wife, Patsy Lewis, were each

required to make restitution in the amount of $4,005,399, jointly
and severally liable with the other co-defendants.          Richey was

ordered to make restitution in the amount of $414,947, jointly and

severally liable with the other co-defendants. Connie Lewis, Patsy

Lewis and Richey appeal the district court’s determination of the

amount of restitution, alleging various errors.        Having reviewed

the briefs and the record, we conclude that the district court did

not err, and we therefore affirm.

                                  I

     The Lewis family conducted its illegal operations at two

family-run   meat   markets,   Lewis   Meat   Market   in   Alexandria,

Louisiana, and Lewis Meat and Slaughter in Pollock, Louisiana. The

Alexandria store began accepting food stamps in 1988; the Pollock

store accepted stamps beginning in 1992.      In the spring of 1995,

Richey, Connie Lewis’ cousin, became involved with the Alexandria

store with the intent of taking over the business when Lewis

“retired.”   In June 1995, Richey applied for authorization to

accept food stamps in the name of CENLA Meats.    The application was

denied, but Richey continued to work at the Alexandria store and to

participate in the food stamp fraud conspiracy.

     The scheme was simple.     Rather than supplying food to food

stamp recipients, the Lewises would illegally purchase food stamp

coupons in exchange for cash at a substantial discount to the face

value of the coupons. The defendants would then redeem the coupons

for their full face value, falsely certifying that they properly

                                  2
accepted the coupons in exchange for equivalent amounts of eligible

food items.

     During the relevant period, the two stores redeemed a total of

$4,216,209 in food stamp coupons.         Of this total, $436,786 was

redeemed between June 1995 and October 1995, the period during

which Richey was an active participant in the conspiracy.              The

coupons redeemed during this period were redeemed by the Pollock

store, because the Alexandria store was no longer authorized to

accept food stamps. The evidence indicated that the defendants had

purchased many of these coupons in Alexandria, and then illegally

transferred them to the Pollock store.

     In order to calculate the amount of restitution required by

the Victim and Witness Protection Act (the “VWPA”), 18 U.S.C. §§

3663 and 3664, the district court deducted five percent from the

full face value of coupons redeemed during the period over which

each defendant participated in the conspiracy.         The five percent

represented the most generous estimate suggested of the portion of

redemptions that represented legitimate exchanges for food.

                                    II

     The   Lewises   argue   that   the   district   court   should   have

calculated the required restitution from the face value less the

amount they actually paid in cash to food stamp recipients.           The

Lewises insist that the VWPA “requires that [they] be given credit

for the value of the part of the property that was returned to the

owner at the time of the illegal transaction.”       Connie S. Lewis Br.

                                    3
at 9-10.     The Lewises cite various cases in which defendants’

restitution was reduced by the amount of property or value that was

returned to the victim of the crime.

       The Lewises paid approximately 78% of the coupons’ face value

in cash to food stamp recipients.           On this basis, they argue that

more than $3 million was “returned.”           The Lewises cite 18 U.S.C.

§ 3663(b)(1), arguing that this limits the amount of restitution

the court may permissibly order to approximately $800,000.

       Under 18 U.S.C. § 3663(b)(1)(A), the court may order the

defendant    to    “return   the   property    to    the   owner     or     someone

designated by the owner.”          If the property cannot feasibly be

returned,    the   defendant    shall   make   restitution      in     an      amount

equivalent to the value of the property, “less the value (as of the

date the property is returned) of any part of the property that is

returned.”    18 U.S.C. § 3663(b)(1)(B)(ii).

       This provision does not help the Lewises, because they mistake

the nature of the “property” at issue.          The VWPA permits the court

to order a defendant to make restitution to “any victim.”                         The

Lewises    illegally   obtained    “property”       in   two   steps      of   their

criminal scheme: they illegally obtained food stamps coupons from

indigent individuals, and they illegally obtained cash redemptions

from   the   United    States   Department     of    Agriculture.           Whether

criminally complicit food stamp recipients could be considered

“victim owners” for restitution under the VWPA is unclear, but they

are not the victim to whom the district court ordered restitution.

                                        4
The victim here is the Department of Agriculture, and the illegal

cash payments that the Lewises made to food stamp recipients does

not constitute a “return” of the cash redemption they fraudulently

obtained from the Department.

     The amount of “profit” the Lewises made from their illegal

scheme is irrelevant to the amount of restitution that is owed.

The Lewises illegally obtained in excess of $4 million from the

Department of Agriculture, and the Department has suffered a real

loss in that amount.    The purpose of the food stamp program is to

provide nutritional    food,    not    cash,    to   needy    families.     The

defendants have thwarted that purpose.               While the defendants’

expenses in conducting their illegal operation undoubtedly reduced

the profit they gained, those expenses did not alleviate the loss

to the Department of Agriculture. The Lewises’ argument is without

merit, and we conclude that the district court properly ordered

restitution in the full face amount of the coupons illegally

redeemed.

                                   III

     Marion   Richey   argues   that      the   district     court   improperly

“extrapolated” information for the Alexandria store between 1988

and August 1993 to determine the amount illegally redeemed during

the months in 1995 when he was a member of the conspiracy.                Richey

further argues that the 5% credit for legitimate sales was too

small because the evidence “would indicate that more than five

                                      5
percent of the food stamp transactions would be for legitimate

sales of meat.”    Richey Br. at 7-8.

     Under 18 U.S.C. § 3664(d), the government bears the burden of

proving the amount of restitution owed by a preponderance of the

evidence, and the district court is to resolve disputes as to the

proper amount of restitution.           Without deciding that such an

“extrapolation” would be improper in the absence of more definite

evidence, we observe that Richey mistakes the method of calculation

employed by the district court.

     At the sentencing hearing, Special Agent Gerald Burkhalter

testified concerning the facts revealed by the Department of

Agriculture’s investigation of the illegal scheme.            Burkhalter

testified to the dollar amount of food stamp coupons that the Lewis

family redeemed in each month of the conspiracy. Burkhalter stated

that between June 1995 and October 1995 the Lewis operation,

through the Pollock store,1 redeemed a total of $436,786.        Rec. 4,

24-25.    No   extrapolation   of   data    from   earlier   periods   was

performed.     As an active and knowing member of the conspiracy,

Richey is responsible for this entire amount, without regard to

whether the stamps in question were illegally purchased at the

Pollock store or at the Alexandria store where he worked.

    1
     At this point in the conspiracy, the Alexandria store was no
longer authorized to accept food stamps. Despite this, Richey and
others continued to purchase food stamps coupons in Alexandria.
The defendants would then illegally transfer the coupons to the
Pollock store to be redeemed.

                                    6
     Richey’s second challenge to the $415,947 restitution award is

an assertion that the government failed to prove that only five

percent of the sales were legitimate.          This argument is without

merit.   The government’s financial analysis indicated that between

two and three percent of food stamp coupon redemptions represented

legitimate sales.    Jason Lewis agreed that this figure was correct

to the best of his knowledge.          Carson Lewis testified that he

believed the figure was three to four percent.         Rec. 4, 32.      The

presentence report accepted a figure of 2.5 percent, and then

generously doubled it to five percent to account for possible

error.   The district court adopted this figure.

     The court was required to resolve the factual dispute by a

preponderance   of   the   evidence.     The   defendants   presented   no

evidence that a figure higher than five percent was appropriate.

When asked whether two to five percent would be a “fair accounting”

Richey himself did not deny that it was, but simply suggested that

they were trying to “build up” the meat business with more sales.

Rec. 4, 44.     Neither Richey nor any other defendant offered

evidence that more than five percent of the food stamp redemptions

represented legitimate sales.     The district court did not clearly

err in determining that the government had shown by a preponderance

of the evidence that five percent was the appropriate figure.

     Richey’s final argument is that the district court abused its

discretion in ordering restitution in an amount he is unable to

pay. We find this argument unpersuasive. In determining an amount

                                   7
of restitution to be paid, the district court considers not only a

defendant’s   present   financial   resources,   but   also   his   future

ability to pay.    United States v. Schinnell, 80 F.3d 1064, 1072

(5th Cir. 1996).   The defendant bears the burden of persuading as

to any mitigating financial factors under § 3664(a). United States

v. Matovsky, 935 F.3d 719, 722 (5th Cir. 1991).         Richey has been

regularly employed over most of his life, and presented no evidence

that he will be unable to pay the restitution imposed over time.

We find that the district court did not abuse its discretion in

declining to depart downward from the restitution recommended in

the presentence report.

                                    8
                                IV

     We conclude that the district court properly determined the

amount of restitution to be made by the defendants to the victim of

their crime, the United States Department of Agriculture.      The

sentences imposed by the district court upon Connie S. Lewis,

Patsy E. Lewis, and Marion Francis Richey are therefore

                                                  A F F I R M E D.

                                9