Court Opinion

ID: 4155932
Source: CourtListenerOpinion
Date Created: 2017-03-28 14:01:00.399782+00
Date Added: 2024-06-11T14:34:38.877306
License: Public Domain

16-193-cr
United States v. Kinney

                           UNITED STATES COURT OF APPEALS
                               FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 28th day of March, two thousand seventeen.

PRESENT: REENA RAGGI,
                 DEBRA ANN LIVINGSTON,
                 SUSAN L. CARNEY,
                                 Circuit Judges.
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UNITED STATES OF AMERICA,
                                                   Appellee,

                          v.                                                 No. 16-193-cr

DEBRA J. KINNEY,
                                      Defendant-Appellant,
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APPEARING FOR APPELLANT:                          AVI SPRINGER (Devin McLaughlin, on the
                                                  brief), Langrock Sperry & Wool, LLP,
                                                  Middlebury, Vermont.

APPEARING FOR APPELLEE:                          WILLIAM B. DARROW, Assistant United
                                                 States Attorney (Gregory L. Waples, Assistant
                                                 United States Attorney, on the brief), for Eric S.
                                                 Miller, United States Attorney for the District
                                                 of Vermont, Burlington, Vermont.

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       Appeal from a judgment of the United States District Court for the District of

Vermont (William K. Sessions III, Judge).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment entered on January 5, 2016, is AFFIRMED.

       Defendant Debra Kinney, former manager of the Border Lodge Credit Union,

stands convicted after a guilty plea to one count of embezzling funds from that savings

organization in violation of 18 U.S.C. § 657. Sentenced to a below-Guidelines prison

term of 36 months, following her sentencing representation that she would “cooperate

fully with the courts in [making] whatever they deem to be just . . . restitution complete,”

App’x 32, Kinney now appeals the $812,329 restitution order subsequently entered by the

district court, challenging both the dollar amount and the process by which that amount

was determined. Our standard of review is abuse of discretion, which we will identify

only where the decision rests upon an error of law or fact or otherwise cannot be located

within the range of permissible decisions. See United States v. Thompson, 792 F.3d
273, 276–77 (2d Cir. 2015); United States v. Gushlak, 728 F.3d 184, 193–94 (2d Cir.

2013).1 In so reviewing Kinney’s challenges, we assume the parties’ familiarity with

1
  The government urges plain error review, arguing that Kinney’s claims were not
preserved below. In the district court, Kinney argued that the government failed to
provide “supporting documentation” for any restitution exceeding the $499,757 claimed
by the National Credit Union Association. App’x 90–91. Assuming that this was
sufficient to “communicate the nature of [Kinney’s] claim[s],” even in the absence of
“precise or detailed legal arguments,” United States v. Huggins, 844 F.3d 118, 121 n.3
(2d Cir. 2016) (internal quotation marks omitted), we nevertheless conclude that she fails
to demonstrate abuse of discretion.

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the facts and procedural history of the case, which we reference only as necessary to

explain our decision to affirm.

1.     Amount of Restitution

       The challenged restitution order was in four parts: (1) $499,757 to the National

Credit Union Administration (“NCUA”); (2) $265,000 to CUMIS Insurance; (3) $2,572

to credit union member Gordon Chadburn; and (4) $45,000 to credit union member Lise

Fournier. Kinney does not dispute the award to CUMIS. Instead, she argues that the

award to NCUA was impermissibly duplicative of that award and that the Chadburn and

Fournier claims were insufficiently documented to be awarded without an evidentiary

hearing. We are not persuaded.

       a.     Duplicative Award

       The Mandatory Victims Restitution Act (“MVRA”) requires a district court to

order restitution in the full amount of a victim’s loss from the offense of conviction. See

18 U.S.C. §§ 3663A(a)(1), 3664(f)(1)(A); United States v. Thompson, 792 F.3d at 278.

The law recognizes that victims’ losses cannot always be identified with “mathematical”

precision and, thus, has approved “a reasonable approximation of losses supported by a

sound methodology.” United States v. Gushlak, 728 F.3d at 196; see also Paroline v.

United States, 134 S. Ct. 1710, 1728 (2014). At the same time, however, the law does

not authorize restitution to victims “in excess of their losses.”        United States v.

Pescatore, 637 F.3d 128, 139 (2d Cir. 2011). Thus, a district court cannot recompense

both a victim and his compensating insurer for the same loss.        See United States v.

Thompson, 792 F.3d at 279.

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      The district court here concluded that a $499,757 award to the NCUA and a

$265,000 award to CUMIS were not so duplicative because the loss to the NCUA far

exceeded the combination of awards to these victims. This conclusion finds support in

the record. The NCUA, the agency that insures members’ deposits in federal credit

unions, including the Border Lodge Credit Union, advised the district court that it had

limited its loss claim to $499,757 (reduced from an original $520,093) not because that

was the amount of loss sustained, but because that was the amount it could trace directly

to Kinney, her family, and their associates. The NCUA advised the district court that it

believed Kinney’s dishonesty to have caused the credit union’s insolvency, resulting in a

total loss of $2,300,051, of which it had thus far documented $1.3 million through

member affidavits and other proof, only $265,000 of which had been covered by CUMIS

(the limit of that insurer’s bond obligation for employee dishonesty and audit expenses).

Thus, the NCUA stated that it thought the amount of funds misappropriated by Kinney to

be “a lot higher” than its loss claim “because of the 33 member share accounts that were

understated by $1,308,987.”    App’x 62.    In the absence of cooperation from these

members, some of whom were relatives or close friends of the defendant who believed

she would “take care of everything for them,” the NCUA’s tracing abilities were limited

by the very nature of Kinney’s embezzlement scheme. Id.

      A defendant’s restitution obligation is not limited to the amount that she has

realized from her crime but, rather, extends to the full loss sustained by victims. See

United States v. Zangari, 677 F.3d 86, 92 (2d Cir. 2012) (holding that measure of

restitution is victim’s loss, not defendant’s gain); United States v. Boccagna, 450 F.3d
4
107, 115 (2d Cir. 2006) (stating that “primary and overarching” purpose of MVRA is “to

fully compensate these victims for their losses and to restore these victims to their

original state of well-being” (internal quotation marks omitted)). Thus, it is no matter

that the NCUA traced only approximately half a million embezzled dollars directly to

Kinney and her associates. The NCUA investigation into and documentation of some

$1.3 million missing from accounts of the insolvent credit union, considered together

with the proof of Kinney’s extensive embezzlement, provided a sufficient factual basis to

support a preponderance finding by the district court that Kinney’s criminal conduct had

caused a total loss so far in excess of the $499,757 NCUA claim and the $265,000 paid

by CUMIS as to preclude any concern of unwarranted duplication in the restitution

awards to both these victims.    Accordingly, we identify no abuse of discretion in these

awards.

       b.     Sufficiency of Chadburn/Fournier Claims

       Kinney argues that the affidavits of Chadburn and Fournier were insufficient to

raise their loss claims above the speculative. Indeed, she argues that the district court

could not rely upon such hearsay statements absent some minimal indicia of reliability.

See United States v. Martinez, 413 F.3d 239, 244 (2d Cir. 2005). The argument fails

because the requisite minimal indicia of reliability were provided by the specificity of the

statements, the fact that those statements were sworn under penalty of perjury, and, more

generally, by the evidence of Kinney’s extensive embezzlement throughout the accounts

of the Border Lodge Credit Union. See United States v. Ibanez, 924 F.2d 427, 429–30

(2d Cir. 1991) (observing that, where “sufficient indicia of reliability” are required to

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corroborate information presented at sentencing, affidavits “[may] themselves” be

sufficient to resolve disputes); United States v. Schwamborn, 542 F. App’x 87, 88 (2d

Cir. 2013) (holding that, under Ibanez, district court did not plainly err in relying on

sworn affidavits alone for determining amount of claimant’s restitution).

       Although Kinney argues that, insofar as Fournier’s and Chadburn’s loss claims

were turned down by the NCUA, they should not have been believed by the district court,

we are obliged to defer on a sufficiency challenge to the district court’s contrary

conclusion, and we cannot say that it abused its discretion in crediting these sworn

accounts consistent with Kinney’s overall criminal conduct. In Chadburn’s case, the

NCUA compensated him for $108,780.27 of his claimed $111,352.76 loss, and Kinney

does not offer reason to credit the NCUA’s decision not to award the $2,572.49

difference at issue. 2   Nor does Kinney offer reason beyond conjecture to discredit

Fournier’s sworn affidavit. She does not, in other words, offer reason to conclude that

the district court abused its discretion in making a preponderance finding, on the record

before it, that the amounts Chadburn and Fournier claimed were more likely than not

valid. See United States v. Ibanez, 924 F.2d at 430. Accordingly, we grant no relief

from this part of the judgment.

2
  Documentation in the record indicates that the additional $2,572.49 claimed by
Chadburn resulted from a dispute with the NCUA over its calculation of the amount to
which he was entitled based on the timing of transfers between accounts. Kinney did
not and does not rely upon that documentation, which, in any event, does not
unambiguously favor either Chadburn’s or the NCUA’s calculations.

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2.    Failure To Conduct Evidentiary Hearing

      Kinney argues that the district court’s failure to conduct an evidentiary hearing on

restitution denied her due process. The law does not support this argument. “[I]n the

context of contested issues regarding the propriety of a restitution award, . . . the

sentencing procedures employed to resolve such disputes are within the district court’s

discretion so long as the defendant is given an adequate opportunity to present his

position.” United States v. Gushlak, 728 F.3d at 194 (internal quotation marks omitted).

      Here, the district court afforded Kinney that opportunity when it allowed her to

submit a memorandum raising any objections to the government’s restitution

calculations. Her two-page submission argued merely that the evidence established that

only $499,757 was attributable to Kinney’s malfeasance and that the evidence supporting

additional losses was “speculative.” App’x 90–91. It stated that “a large sum may also

have been lost through [Kinney’s] nonfeasance.” Id. at 91. The district court did not

abuse its discretion in concluding that no evidentiary hearing was necessary to pursue

those conclusory assertions.      The sworn affidavits supporting Chadburn’s and

Fournier’s claimed losses, as discussed, sufficiently supported a preponderance finding of

their entitlement to restitution for those losses. The NCUA’s report of a total $2.3

million loss, $1.3 million of which was documented as understated accounts, when

viewed in light of the half million dollars in documented embezzled funds, convincingly

supported a preponderance finding that the overall loss was, more likely than not, caused

by Kinney’s criminal conduct and not by simple neglect.         These findings, in turn,

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permitted the district court to order restitution in the lesser total amount of $812,329

without an evidentiary hearing.

3.    Conclusion

      We have considered Kinney’s remaining arguments and conclude that they are

without merit.   Accordingly, the January 5, 2016 judgment of the district court is

AFFIRMED.

                                  FOR THE COURT:
                                  CATHERINE O’HAGAN WOLFE, Clerk of Court

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