Court Opinion

ID: 2752623
Source: CourtListenerOpinion
Date Created: 2014-11-18 20:00:51.905574+00
Date Added: 2024-06-11T10:13:03.767400
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 13-4427

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

DARLENE M. ALTVATER,

                Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt.    Deborah K. Chasanow, District Judge.
(8:12-cr-00065-DKC-1)

Argued:   September 16, 2014                 Decided:   November 18, 2014

Before MOTZ and KING, Circuit Judges, and DAVIS, Senior Circuit
Judge.

Affirmed in part; vacated and remanded in part by unpublished
opinion.   Senior Judge Davis wrote the opinion, in which Judge
Motz and Judge King joined.

ARGUED:   Gerald   Chester   Ruter,  Baltimore,   Maryland,  for
Appellant. Hollis Raphael Weisman, OFFICE OF THE UNITED STATES
ATTORNEY, Greenbelt, Maryland, for Appellee.    ON BRIEF: Rod J.
Rosenstein, United States Attorney, OFFICE OF THE UNITED STATES
ATTORNEY, Baltimore, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
DAVIS, Senior Circuit Judge:

      A    jury    convicted     Darlene          M.    Altvater      of    two    counts    of

making     false       statements       in        an     application         for      worker’s

compensation benefits, in violation of 18 U.S.C. § 1920.                                    The

district      court       sentenced          Altvater           to    five        months     of

imprisonment,       followed     by    five       months       of    home    detention      and

three     years   of   supervised       release,         and     ordered     that     she   pay

restitution in the amount of $59,592.58.                             On appeal, Altvater

challenges the district court’s determination of the loss amount

under the Sentencing Guidelines and the court’s calculation of

the amount of restitution.                   For the reasons that follow, we

affirm in part and vacate and remand in part.

                                             I.

                                             A.

      Altvater      was   an     employee         of     the     United     States     Postal

Service when she was injured on the job in December 2000.                                   Her

claim for federal worker’s compensation benefits was accepted in

January 2001.

      For each subsequent year, Altvater filled out a “1032 form”

to continue receiving benefits.                   In September 2005, she reported

on   her   1032    form   that    she    had       been        involved     in    a   business

enterprise        beginning    in     April            2005.         She    described       the

enterprise as a family business, and indicated that she received

no payment for her work.              Altvater repeated this information on

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her   forms     for    2006,     2007,      and     2008.           She    averred      that    she

answered phones, spoke with customers, and input data into a

computer      for     up   to    fifteen       hours          a    week,    but    received      no

earnings.       On her 2009 and 2010 forms, however, Altvater did not

report any involvement in a business.                             In fact, from April 2005

to December 2011, Altvater owned an interest in a spa and gym,

and she worked there for several hours each week.

                                               B.

      A   federal      grand      jury      returned          a     superseding        indictment

against Altvater on September 5, 2012, charging her with two

counts     of       committing         fraud        to        obtain       federal       worker’s

compensation benefits.                The indictment alleged that on or about

November    24,     2009,       and    again    on       or       about    December     9,   2010,

Altvater    applied        for   benefits         and     knowingly         made   a    false   or

fraudulent statement to receive benefits to which she was not

entitled and which exceeded $1,000.

      Altvater proceeded to trial, during which Angella Winn, a

district      director      for       the    Office           of    Workers’       Compensation

Programs (“OWCP”), testified.                  Winn explained that OWCP provides

compensation to injured federal workers to make them whole.                                     For

example, if a federal worker is injured and is only able to work

four hours a day after the injury, OWCP pays that employee for

the other four hours of a full-time work schedule.

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      Winn further explained that, each year, OWCP provides the

injured federal worker with a 1032 form to support continuing

eligibility for benefits.            The 1032 form requires the claimant

to   report   any    outside   employment         from    the    preceding    fifteen

months, the rate of pay received from that employment, and any

ownership interest in a business enterprise maintained in the

preceding fifteen months.            In addition, the 1032 form requires

the claimant to notify OWCP of any improvement in her medical

condition.     OWCP       reviews    the   1032    form    to    determine    whether

benefits must be reduced based on a change in the claimant’s

employment or improvement in her condition.

      Following Winn’s testimony, the jury found Altvater guilty

of both counts.

      In the presentence report (“PSR”), the probation officer

recommended an eight-level increase in the offense level based

on   the   loss      figure    calculated      by    the        government,   namely

$98,973.70.         See   U.S.S.G.    §    2B1.1(b)(1)(E).           The   probation

officer also recommended that restitution be equal to the loss

amount.

      The government’s loss calculation was based on a memorandum

prepared by Winn.         Winn calculated the loss by first estimating

Altvater’s imputed earnings from the spa between April 2005 and

December 2011.        Next, she determined the amount of benefits to

which Altvater would have been entitled had she reported that

                                           4
income.        Finally,      Winn       subtracted      the    amount      of      benefits    to

which    Altvater      was    actually       entitled         between      April     2005     and

December 2011 from the total amount of benefits she received

during that period.

       At the sentencing hearing, Winn testified that her estimate

of Altvater’s earnings—i.e., her wage earning capacity (“WEC”)—

was derived from information provided by the State of Maryland

Department of Labor, Licensing, and Regulation.                               Winn obtained

the    rate    of    pay    for     a    first-line      supervisor          or    manager    of

personal service workers—the job with most similar duties to

those performed by Altvater—and then adjusted that amount for

various economic factors throughout the relevant time period.

       The     government         argued        at     sentencing       that        Altvater’s

employment      and   (imputed)          earnings      in     the    years    prior     to    the

charged      conduct,       during      which    Altvater        worked      but    failed     to

report her income, constituted relevant conduct for the purpose

of calculating loss.                The district court disagreed, however,

reasoning that the government had failed to charge a scheme and

that the loss figure should be calculated beginning August 2008,

or fifteen months prior to the execution of the false 1032 form,

in    November      2009,    on   which     count       one    of    the     indictment       was

based.        The   court,     therefore,            requested      that     the    government

calculate the amount of benefits that Altvater received between

August       2008   and     December       2011,       when    she    stopped        receiving

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benefits.        Notably, the court included payments subsequent to

the   execution        of    the    false   1032   form    in    December    2010;   the

government explained that, had Altvater reported her income from

the spa, OWCP would have reduced her benefits going forward to

recoup prior overpayments.

      The government ultimately determined that Altvater received

$98,359.89 in benefits between August 2008 and December 2011.

Based    on    her     WEC,    however,      she   had    only    been    entitled   to

$35,667.40.       Accordingly, the government asserted, the resultant

loss was $62,692.49.

      The district court accepted the government’s calculation of

the loss amount, and applied a six-level increase in the offense

level.    See U.S.S.G. § 2B1.1(b)(1)(D).                  The court explained that

using    Altvater’s         WEC    to   determine    the    loss    was     appropriate

because the government did not have information on her actual

income from the spa.

      After determining an advisory Guidelines range of ten to

sixteen       months    of    imprisonment,        the    court    imposed    a   split

sentence, sentencing Altvater to five months of imprisonment,

followed by five months of home detention and three years of

supervised release.                The court again asked the government to

recalculate the restitution amount, and set another hearing date

to resolve that issue.

                                             6
      In   a    supplemental        memorandum    regarding      restitution,       the

government      calculated         the   loss    incurred   during     three    time

periods: (1) from August 2008 to May 2009, (2) from May 2009 to

April 2010, and (3) from April 2010 to December 2011.                          Adding

the loss amounts from each time period, the government requested

that restitution be ordered in the amount of $59,592.58.

      The court accepted the government’s proposed calculation,

and   ordered      that      Altvater     pay    $59,592.58       in   restitution.

Altvater timely appealed.

                                          II.

                                           A.

      Altvater     first     argues      that   the   district     court    erred    in

relying    on    her   WEC    to    calculate     loss.     She    contends    that,

because the government has substantial investigative powers to

accurately assess her spa income, it “should have introduced at

the sentencing hearing evidence of those earnings,” instead of

relying on standardized economic data about what a typical spa

worker would have made.              Altvater Br. 30.           She maintains that

she had no earnings from her work at the spa, and thus income

may not be properly imputed to her.

      In reviewing the district court’s loss calculation under

the   Sentencing       Guidelines,       “‘we   review    the    district    court’s

legal conclusions de novo and its factual findings for clear

error.’”       United States v. Manigan, 592 F.3d 621, 626 (4th Cir.

                                           7
2010) (quoting United States v. Layton, 564 F.3d 330, 334 (4th

Cir. 2009)).        We will “find clear error only if, ‘on the entire

evidence,’ [we are] ‘left with the definite and firm conviction

that a mistake has been committed.’”                Id. at 631 (quoting Easley

v. Cromartie, 532 U.S. 234, 242 (2001)).

     “‘In      a    case    involving     diversion    of   government      program

benefits,      loss    is   the   value    of   the   benefits      diverted   from

intended recipients or uses.’”                 United States v. Dawkins, 202
F.3d 711, 714 (4th Cir. 2000) (quoting U.S.S.G. § 2F1.1 cmt.

n.8(d)).     “[W]hen determining losses for sentencing purposes, a

court must subtract the amount of money or benefits to which a

defendant is legitimately entitled from the amount fraudulently

claimed.”      United States v. Miller, 316 F.3d 495, 499 (4th Cir.

2003); see also Dawkins, 202 F.3d at 715.                   “In calculating the

total   loss       attribution,   a     district    court   ‘need    only   make   a

reasonable estimate of the loss.’”                 United States v. Jones, 716
F.3d 851, 860 (4th Cir. 2013) (quoting U.S.S.G. § 2B1.1 cmt.

n.3(C)).       The government bears the burden of proving the loss

amount.     Dawkins, 202 F.3d at 714.

     Applying the above standard, we reject Altvater’s argument

that she should not be held accountable for having earned any

money while working at the spa.                 Altvater was a part owner in

the spa.       The “income” she earned would not necessarily have

been a normal paycheck for hours worked; rather, it was the

                                           8
amount of money she saved as an owner by not having to pay a

third party.      In other words, she was able to pay herself a

larger amount of income out of her business because she did not

need to pay someone to do the work that she did.                     Thus, even

though she did not receive a paycheck, income from her work at

the spa was properly imputed to her.

     Given that Altvater persisted in her assertion that she

received no income from her spa business, the district court was

required   to   estimate   her   earnings   in    order     to   calculate    the

amount of benefits to which she was lawfully entitled.                        The

amount of money Altvater would have had to pay another employee

to do the work that she did was a reasonable substitute for her

actual earnings.        See Jones, 716 F.3d at 860.               The district

court, therefore, did not err in relying on Altvater’s WEC to

determine the loss amount.

                                    B.

     Altvater    next   argues   that    the     district    court    erred   in

ordering restitution for the period between December 2010, when

she executed the second false 1032 form, and December 2011, when

she stopped receiving benefits.          She contends that she may only

be ordered to pay restitution for the offense of conviction, and

as the 1032 form executed in 2010 covered just the preceding

fifteen months, the restitution amount should not have included

payments received after that time.

                                     9
     We    review      a    restitution      order    for    abuse    of       discretion.

United States v. Hoyle, 33 F.3d 415, 420 (4th Cir. 1994).

     Under the Mandatory Victims Restitution Act, the district

court must order the defendant to make restitution to victims of

an   offense       against        property.           18     U.S.C.        §     3663A(a),

(c)(1)(A)(ii).              The    statute      “‘authorize[s]            an    award    of

restitution only for the loss caused by the specific conduct

that is the basis of the offense of conviction.’”                          United States

v. Blake, 81 F.3d 498, 506 (4th Cir. 1996) (quoting Hughey v.

United States, 495 U.S. 411, 413 (1990)).                          In other words, a

court    may    only    award     restitution       for    loss    that    results      from

“‘conduct underlying an element of the offense of conviction.’”

United    States       v.   Davis,   714 F.3d 809,    813    (4th       Cir.   2013)

(quoting Blake, 81 F.3d at 506).

     We agree with Altvater that she may not be held liable in

restitution for payments received after December 2010, as the

receipt of payments after that time is not conduct that forms

the offense of conviction.              The superseding indictment charged

Altvater with perjury on the November 24, 2009 1032 form and

again on her December 9, 2010 1032 form.                    The material falsehood

on each 1032 form was that Altvater failed to report that she

had been employed and earning income for the previous fifteen

months.        In this case, therefore, the acts of perjury relate

back to the fifteen months prior to the filing of the 1032

                                           10
forms,   and    thus    restitution            may    only    be    ordered   for    those

periods.       This “look-back” approach in calculating restitution

in § 1920 prosecutions is precisely the approach employed by the

government      and    endorsed       by       this     Court      in   Dawkins.          See

Appellee’s Brief in No. 99-4240 (4th Cir.), 1999 WL 33607403, at

*4–5 (July 13, 1999) (“Dawkins received a total of $64,356.00 in

disability      benefits       from   November          18,     1995    [fifteen    months

preceding      the    filing    of    the      first     perjurious       1032     form   on

February 18, 1997,] through December 1, 1997 [the date Dawkins

filed the second perjurious form 1032], the period covered by

his two false form 1032s.”) (bracketed material added); Dawkins,
202 F.3d at 714 (“The district court found that the loss for

sentencing purposes was the total amount of benefits paid to

Dawkins during the time covered by the February and December

1997 1032 forms, or $64,536.” [sic]).

     Accordingly, we conclude that the district court committed

an error of law and thereby abused its discretion in ordering

restitution for the period between December 2010 and December

2011,    and    we     remand     for      a        reduction      in   the   amount       of

restitution.         On remand, as defense counsel conceded at oral

argument, the district court may, in its discretion, properly

impose a fine (as it had expressly declined to do at sentencing

in light of the amount of restitution it had imposed).                              See 18

U.S.C. § 1920.

                                               11
                              III.

     For the reasons set forth, we affirm in part and vacate in

part the restitution order and remand this case to the district

court for further proceedings consistent with this opinion.

                                                AFFIRMED IN PART;
                                     VACATED AND REMANDED IN PART

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