Court Opinion

ID: 181264
Source: CourtListenerOpinion
Date Created: 2010-12-16 18:49:09+00
Date Added: 2024-06-11T17:25:54.705765
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 09-4970

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

          v.

KENNETH N. HARVEY,

                Defendant – Appellant.

                            No. 09-5030

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

          v.

MICHAEL G. KRONSTEIN,

                Defendant – Appellant.

Appeals from the United States District Court for the Western
District of Virginia, at Charlottesville.     Norman K. Moon,
Senior District Judge. (3:06-cr-00023-nkm-mfu-1; 3:06-cr-00023-
nkm-2)

Submitted:   November 29, 2010          Decided:   December 16, 2010

Before WILKINSON, AGEE, and KEENAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.

Larry W. Shelton, Federal Public Defender, Frederick T. Heblich,
Jr., Assistant Federal Public Defender, Christine Madeleine Lee,
Research   and  Writing  Attorney,   Charlottesville,  Virginia;
Franklin B. Reynolds, Jr., FRANKLIN B. REYNOLDS, JR., P.C.,
Washington, Virginia, for Appellants.         Lanny A. Breuer,
Assistant Attorney General, Greg D. Andres, Acting Deputy
Assistant Attorney General, Jack Smith, Edward J. Loya, Jr.,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

            A     jury    convicted    Kenneth     N.    Harvey      and    Michael       G.

Kronstein of honest services wire fraud and bribery arising from

a scheme in which Harvey, a civilian employee with U.S. Army

Intelligence       and    Security     Command     (INSCOM),      orchestrated           the

award of a sole-source contract to Program Contract Services,

Inc.    (“PCS”),      a   corporation     wholly     owned     and       controlled      by

Kronstein, in exchange for financial remuneration.                          On appeal,

we     affirmed    the    defendants’      convictions        and        sentences       but

vacated     a     restitution         award    and       remanded         for     further

proceedings.          United States v. Harvey, 532 F.3d 326 (4th Cir.

2008).      On    remand,       the   district     court     held    an     evidentiary

hearing    and    awarded       restitution   to     INSCOM    in    the        amount    of

$319,923.30.          Harvey    and   Kronstein     have     again       appealed.        We

affirm.

            In     our     previous     opinion,        we   concluded          that     the

Government      had    failed    to   prove   actual     loss,      as    required       for

restitution awards under 18 U.S.C.A. § 3663 (West 2000 & Supp.

2010).     Harvey, 532 F.3d at 339-40.             We held that PCS’s gain was

not a permissible proxy for actual loss and remanded “so that

[the district court] may determine whether the amount of loss

can be calculated.”            Id. at 341.     On remand, the district court

ordered briefing and held an evidentiary hearing, at which the

Government presented testimony from two witnesses.                              After the

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hearing,    the    district    court   issued        a    written    order    awarding

restitution       to   the    Government.            The     court    rejected      the

Government’s      theory     that   the       contract      was     unnecessary     but

adopted the theory that the Government paid for nine employees

in   1999   but   received    the   services         of    only   six.       The   court

specifically found (1) that PCS’s contract was a level-of-effort

contract, not a firm-fixed-price contract; (2) that Kronstein’s

contract proposal identified nine positions but filled only six;

(3) that Kronstein submitted work invoices to INSCOM billing for

a total of nine employees; and (4) that Harvey approved payment

for the invoices.

            Harvey     and   Kronstein        make   two    arguments    on    appeal.

First, they argue that the district court violated the mandate

rule in awarding restitution.                 In the alternative, they argue

that the district court’s new restitution order is an abuse of

discretion.

            The mandate rule is “merely a specific application” of

the law of the case doctrine, which “forecloses relitigation of

issues expressly or impliedly decided by the appellate court.”

United States v. Bell, 5 F.3d 64, 66 (4th Cir. 1993) (internal

quotation marks omitted).           “Although the doctrine applies both

to questions actually decided as well as to those decided by

necessary implication, it does not reach questions which might

have been decided but were not.”                Sejman v. Warner-Lambert Co.,

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845   F.2d     66,    69     (4th     Cir.      1988)         (internal          quotation          marks

omitted).

             Applying        these        standards,                we     conclude          that    the

district court did not violate the mandate rule on remand.                                            Our

prior    opinion        decided          only       a     single           question          regarding

restitution:          whether a defendant’s gain could be used as a

proxy    for    actual       loss,       and    answered             that       question       in    the

negative.      In so doing, we noted that there was “no evidence of

actual   loss”       presented        during      trial         or       sentencing      and        that,

although     there     was     testimony        that          PCS    failed       to    comply      with

certain aspects of the contract by, “for example, failing to

hire the contractually required number of employees,” there was

no testimony to “establish the amount of loss INSCOM actually

suffered.”           Harvey,      532    F.3d       at        340.         We    also    concluded,

however, that INSCOM was appropriately considered a “victim” for

restitution     purposes          and    remanded         for        the    district         court    to

determine “whether the amount of actual loss can be calculated”

and, “[i]f so . . . whether . . . new restitution orders should

issue and in what amount and form.”                       Id. at 341.

             On remand, the Government offered testimony regarding

two potential theories supporting restitution, and we find the

district     court     did     not      violate         the    mandate          rule    in    awarding

restitution      based       on      this    testimony.                  Our     earlier       opinion

mentioned that the Government had previously submitted evidence

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that PCS did not have the requisite number of employees but that

the Government had failed to show an actual loss emanating from

PCS’s failure.         We did not decide whether the Government could

ever establish loss from PCS’s failure to hire the requisite

employees and the Government was clearly permitted to put forth

such evidence, which it did with the testimony.                               Our earlier

opinion stated only that the district court erred by equating

PCS’s gain with INSCOM’s loss; on remand, the district court

fully   complied       with     our   mandate     in    holding         an    evidentiary

hearing and awarding restitution based upon the amount of actual

loss to INSCOM.

              Harvey and Kronstein argue in the alternative that the

district      court        again   abused       its    discretion            in     awarding

restitution.         We review court-ordered restitution for abuse of

discretion.         United States v. Vinyard, 266 F.3d 320, 325 (4th

Cir. 2001).         A district court may impose restitution in any case

resulting in harm to a “victim.”                  18 U.S.C.A. § 3663(a)(1)(A),

(a)(2).        In    awarding      restitution,        the   district         court       must

determine the “amount of loss sustained by any victim.”                                     18

U.S.C.A. § 3664(a) (West 2000 & Supp. 2010).                            The Government

bears   the    burden      of   proving   the    amount      of    restitution         by    a

preponderance of the evidence.              Harvey, 532 F.3d at 339.

              We    hold    that   the   district      court      did   not       abuse    its

discretion in awarding $319,923.30 in restitution.                                Harvey and

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Kronstein      note    that    three    INSCOM       employees    testified    during

trial that the contract was a firm-fixed-price contract.                        None,

however, was responsible for the direct administration of the

contract.      The contracting officer, in contrast, testified that

the contract was a “firm-fixed-price, level-of-effort” contract

with a “ceiling” for the number of hours the Government would

pay.    In addition, the contract itself contained the notation

“FFP-LOE,” bolstering the reliability of this construction of

the contract.

              Harvey and Kronstein also contend that the district

court incorrectly found that PCS was required to supply nine

employees     by   examining      the   contract       proposal,     which    was   not

included in the contract.               The district court found that the

contract      proposal    was    part   of     the    contract,    based     upon   the

contracting officer’s testimony.               In addition, during the period

when PCS submitted detailed invoices, those invoices applied the

rates in the contract proposal.

              Accordingly,        we     affirm        the       district     court’s

restitution award.            We dispense with oral argument because the

facts   and    legal     contentions     are     adequately      presented     in   the

materials      before    the    court    and     argument    would    not    aid    the

decisional process.

                                                                             AFFIRMED

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