Court Opinion

ID: 3046282
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:18:36.150927+00
Date Added: 2024-06-11T11:49:09.914313
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 08-2461
                                  ___________

United States of America,            *
                                     *
           Plaintiff-Appellee,       *
                                     * Appeal from the United States
     v.                              * District Court for the
                                     * District of Nebraska.
Lavon Stennis-Williams,              *
                                     *
           Defendant-Appellant.      *
                                ___________

                             Submitted: December 11, 2008
                                Filed: March 10, 2009
                                 ___________

Before COLLOTON and SHEPHERD, Circuit Judges, and GOLDBERG,1 Judge.
                          ___________

SHEPHERD, Circuit Judge.

       Lavon Stennis-Williams (“Defendant”) pled guilty to one count of mail fraud
in violation of 18 U.S.C. § 1341. The district court2 sentenced her to 30 months
imprisonment and ordered restitution in the amount of $56,134. Defendant appeals
her sentence and the restitution award. We affirm.

      1
       The Honorable Richard W. Goldberg, United States Court of International
Trade, sitting by designation.
      2
      The Honorable Richard G. Kopf, United States District Judge for the District
of Nebraska.
                                            I.

       Defendant, an Omaha attorney, was appointed personal representative of the
estate of Robert Nelson, who died on February 7, 2002. She defrauded Mr. Nelson’s
estate of $238,340. Robin Nelson, Mr. Nelson’s daughter and sole heir, and the estate
incurred $72,794 in attorney and accountant fees to discover and investigate
Defendant’s malfeasance. After Ms. Nelson filed a civil suit in Douglas County,
Nebraska, Defendant voluntarily paid $25,000 in partial restitution. In May 2007, the
parties reached a settlement agreement, pursuant to which Defendant paid an
additional sum of $190,000. The settlement agreement also contained a covenant not
to prosecute.

       Unbeknownst to Defendant, the United States Attorney’s office was
investigating her conduct for mail and wire fraud. A federal grand jury indicted
Defendant in November 2007, charging her with two counts of mail fraud and four
counts of wire fraud. In February 2008, she pled guilty to one count of mail fraud.
The Presentence Investigation Report calculated the estate’s loss at $238,340,
requiring the addition of 12 offense levels and resulting in a Guidelines range of 24
to 30 months. See United States Sentencing Commission, Guidelines Manual,
§2B1.1(a)(2), (b)(1)(G) (setting a base offense level of six and adding 12 levels where
the loss is more than $200,000 but less than $400,000). Defendant objected, arguing
that the loss calculation should have taken into account the amounts she reimbursed
the estate during the civil lawsuit, requiring the addition of only four offense levels
and resulting in a Guidelines range of four to ten months. See id. §2B1.1(b)(1)(C)
(add four levels where the loss is more than $10,000 but less than $30,000). The
district court denied Defendant’s objection regarding the loss calculation and
sentenced her to 30 months imprisonment:

      I find that the proper loss amount is $238,340 for offense level
      calculations. . . . There is no factual dispute that the loss or intended loss

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      was $238,340, despite the fact that Ms. Stennis paid it back before she
      was prosecuted. The public interest looks to the intended harm, and
      that’s what I ought to concentrate on, as I understand the law, so that is
      what I am going to concentrate on.

(Sentencing Tr. 52, June 27, 2008.)

       The United States also moved for restitution under the Mandatory Victims
Restitution Act (“MVRA”), 18 U.S.C. § 3663A, asserting that Defendant should
reimburse the estate for attorney and accountant fees the estate paid to investigate
Defendant’s conduct. Defendant objected, arguing that Ms. Nelson and the estate
effectively waived their right to restitution for the fees when they agreed to settle the
civil case, in which recovery for attorney’s fees was permissible, for a specified sum.
The district court denied Defendant’s objection and ordered her to pay $56,134 in
restitution.3

      Insofar as restitution is concerned, I’m troubled by the settlement
      agreement and the covenant not to prosecute. It is conceivable that there
      was a breach of the settlement agreement by the settling parties on the
      victim’s side. . . . [But] the victim is out, there is no question, the fees
      have been paid, the victim is out $56,134. Whether she gave that up, or
      her lawyers gave that up for her in the settlement agreement, and there
      has been some breach of it, . . . that’s to be resolved by the state court,
      not by me. It’s clear that the victim is out that money and needs to be
      repaid and I so order.

(Sentencing Tr. 52-53.) Defendant brings this appeal.

      3
       The district court calculated the restitution award by adding $238,340, the
amount Defendant stole from the estate, and $72,794, the fees the estate incurred
investigating Defendant’s conduct, for a total of $311,134. Then, the court subtracted
amounts the estate had already been reimbursed, including $190,000 from the civil
settlement, $25,000 from the Defendant prior to settlement, and $40,000 from the
Nebraska State Bar Association, for a balance of $56,134.

                                           -3-
                                           II.

        “We review de novo the district court’s interpretation and application of the
advisory Sentencing Guidelines.” United States v. Holthaus, 486 F.3d 451, 454 (8th
Cir.), cert. denied, 128 S. Ct. 343 (2007) (citations omitted). Defendant contends that
the district court erred in determining the amount of loss for purposes of calculating
her offense level under the Sentencing Guidelines. Specifically, Defendant argues that
payments she made to the estate during the civil suit reduced the estate’s actual loss
from $238,340 to $19,840. Thus, according to Defendant, the district court should
have increased her base offense level by 4 levels instead of 12. See USSG
§2B1.1(b)(1)(C).

          “Loss means the greater of either actual loss or intended loss.” Holthaus, 486
F.3d at 454 (quotations omitted); accord USSG §2B1.1, comment. (n.3(A)). The
Guidelines define “intended loss” as “the pecuniary harm that was intended to result
from the offense.” USSG §2B1.1, comment. (n.3(A)(ii)). The Guidelines also
provide that “[l]oss shall be reduced by the . . . money returned . . . by the defendant
. . . to the victim before the offense was detected.” Id. §2B1.1, comment. (n.3(E)(i))
(emphasis added). “The time of detection of the offense is the earlier of (I) the time
the offense was discovered by a victim or government agency; or (II) the time the
defendant knew or reasonably should have known that the offense was detected or
about to be detected by a victim or government agency.” Id.

       Defendant’s intentional theft of $238,340 from the estate is an “intended loss,”
see id. §2B1.1, comment. (n.3(A)(ii)), and the payments she made to the estate during
the civil suit do not diminish her culpability for the underlying fraud, see, e.g., United
States v. Parsons, 141 F.3d 386, 392-93 (1st Cir. 1998) (“Loss is a proxy for the
seriousness of the offense” and “a defrauder cannot purchase a shorter term by a
belated return of the proceeds[.]”). Although Defendant returned most of the money
she stole, she did so long after Ms. Nelson and the estate discovered the theft.

                                           -4-
Therefore, the Guidelines did not entitle Defendant to have the money she returned
credited against the amount of loss for purposes of calculating her offense level. See
USSG §2B1.1, comment. (n.3(E)(i)). The district court did not err in increasing
Defendant’s base offense level by 12 levels. See id. §2B1.1(b)(1)(G).

                                            III.

       We review for clear error the district court’s finding as to the proper amount of
restitution. United States v. Chalupnik, 514 F.3d 748, 752 (8th Cir. 2008). For “an
offense against property under this title . . . including any offense committed by fraud
or deceit,” the MVRA provides that “the [district] court shall order . . . that the
defendant make restitution to the victim of the offense or, if the victim is deceased, to
the victim’s estate.” 18 U.S.C. § 3663A(a)(1), (c)(1)(A)(ii). Neither party disputes
that mail fraud is such an offense, see id. § 1341, or that restitution is mandatory in
this case, see id. § 3663A(a)(1). However, Defendant asserts that the district court
erred by including in its restitution calculus the attorney and accountant fees the estate
incurred to investigate her fraudulent conduct. Defendant contends that the estate
effectively waived its right to restitution for such fees when it agreed to settle the civil
case, in which recovery for attorney’s fees was permissible, for a specified sum.
Therefore, according to Defendant, the amount of restitution should be zero because
the estate has already been reimbursed for its other losses.

         Under the MVRA, “[t]he order of restitution shall require that [the] defendant
. . . reimburse the victim for lost income and necessary child care, transportation, and
other expenses incurred during participation in the investigation or prosecution of the
offense or attendance at proceedings related to the offense.” Id. § 3663A(b)(4)
(emphasis added). However, “[r]estitution may only be awarded ‘for the loss caused
by the specific conduct that is the basis of the offense of the conviction.’” United
States v. DeRosier, 501 F.3d 888, 896 (8th Cir. 2007) (quoting Hughey v. United
States, 495 U.S. 411, 413 (1990)). This court has held that privately incurred

                                            -5-
investigative costs constitute foreseeable losses that are directly caused by a
defendant’s fraudulent conduct. See, e.g., id. at 896-97; United States v. Piggie, 303
F.3d 923, 928 (8th Cir. 2002); United States v. Akbani, 151 F.3d 774, 780 (8th Cir.
1998). Therefore, the district court did not clearly err by including the estate’s
investigative costs in its restitution calculation. This court has also held that, because
the victim does not have an independently enforceable right to receive criminal
restitution, the victim cannot waive such a right in a civil settlement. United States
v. Vetter, 895 F.2d 456, 458 (8th Cir. 1990) (per curiam) (applying the Victim and
Witness Protection Act, the predecessor of the MVRA); see also United States v.
Bearden, 274 F.3d 1031, 1041 (6th Cir. 2001) (applying the MVRA and holding that
“a private settlement between a criminal wrongdoer and his victim releasing the
wrongdoer from further liability does not preclude a district court from imposing a
restitution order for the same underlying wrong”). Thus, the district court’s criminal
restitution order did not impermissibly interfere with the contractual rights of the
parties to the civil settlement agreement.4

                                           IV.

      Accordingly, we affirm the judgment of the district court.
                     ______________________________

      4
        Both Defendant and the United States filed motions to expand the record on
appeal to include additional evidence of the parties’ conduct vis-à-vis the settlement
agreement. Like the district court, we express no opinion as to whether any of the
parties to the civil case breached the settlement agreement. Such matters are outside
the scope of this criminal appeal, and both parties’ motions are denied.

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