Court Opinion

ID: 3190385
Source: CourtListenerOpinion
Date Created: 2016-03-31 16:00:47.473734+00
Date Added: 2024-06-11T14:36:01.856116
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 16a0185n.06

                                       Nos. 14-1989/1990
                                                                                      FILED
                                                                                Mar 31, 2016
                          UNITED STATES COURT OF APPEALS                    DEBORAH S. HUNT, Clerk
                               FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,                                )
                                                         )
       Plaintiff-Appellee,                               )
                                                         )
v.                                                       )      ON APPEAL FROM THE
                                                         )      UNITED STATES DISTRICT
HUSSEIN NAZZAL,                                          )      COURT FOR THE EASTERN
                                                         )      DISTRICT OF MICHIGAN
       Defendant-Appellant.                              )
                                                         )
                                                         )

BEFORE:        SILER, GIBBONS, and ROGERS, Circuit Judges.

       JULIA SMITH GIBBONS, Circuit Judge. Hussein Sam Nazzal (Nazzal) challenges

the district court’s order of restitution to Z.C. and H.M., a woman formerly employed at one of

his restaurants and her son, respectively. Nazzal pled guilty to conspiracy to defraud the United

States for helping arrange several fraudulent marriages, and the government alleges that Nazzal

abused Z.C. and H.M. in order to keep them from reporting his illegal activity to the United

States. Because Nazzal forfeited his objection to the district court’s and government’s treatment

of Z.C. and H.M. as victims, we affirm the restitution order.

                                                I.

       On July 16, 2013, Nazzal pled guilty to one count of conspiracy to defraud the United

States in violation of 18 U.S.C. § 371. During the plea colloquy, Nazzal admitted helping to

arrange two fraudulent marriages between American citizens and his associates.               The
Nos. 14-1989/1990, United States v. Nazzal

government and the district court also mentioned Mike “Muhammad” Murry (Murry), with

whom Nazzal allegedly arranged another false marriage for Z.C., but Nazzal did not admit these

facts as part of his plea.

        The Presentence Investigation Report (PSR) mentioned as “offense conduct” the

marriage between Murry and Z.C., physical and sexual abuse of Z.C. and H.M. by Nazzal,

threats to report them to the immigration authorities, and Z.C.’s work in Nazzal’s restaurant

without pay. Under the “victim impact” section, the PSR identified Z.C. and H.M. as victims of

Nazzal’s conduct, again mentioning physical and sexual abuse, Z.C.’s work without pay, and

threats that Z.C. would be deported if she did not comply with Nazzal’s demands. Nazzal

objected to various portions of the PSR, including the offense conduct and victim impact

sections that refer to Z.C. and H.M. as victims.

        Nazzal stated at the sentencing hearing that he was withdrawing all objections to the PSR

“as part of a global agreement” with the government. He characterized this agreement as

“resolv[ing] all of the issues that were pending before the Court.” At the sentencing hearing,

Nazzal did not object to the district court’s decision to hold a restitution hearing, and he also did

not object to Z.C. and H.M. being called victims and addressing the district court as such. While

speaking to the court at sentencing, H.M. told the court that Nazzal kept his and Z.C.’s

immigration papers and threatened to deport and otherwise harm them if they ever told anyone

about his conduct, while Z.C. testified that he abused and threatened her after she married Murry,

saying she owed him money and forcing her to work in his restaurant and have sex with him.

Only later, in his response to the government’s supplemental sentencing memorandum, did

Nazzal object to the characterization of Z.C. and H.M. as victims.

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Nos. 14-1989/1990, United States v. Nazzal

       Nazzal, the government, and counsel for Z.C. and H.M. filed with the district court their

positions regarding restitution. At the restitution hearing, the government and counsel for H.M.

presented testimony and argument regarding Z.C.’s and H.M.’s lost wages and H.M.’s need for

long-term psychological treatment, and Nazzal cross-examined the two witnesses. The district

court declined to admit a report Dr. Michael Abramsky prepared on Nazzal’s behalf or to grant a

continuance until Dr. Abramsky was available to testify.

       The district court’s order granted restitution of $79,107 to Z.C. and $222,399 to H.M.

under the Victim Witness Protection Act, finding excessive the amount requested for H.M.’s

psychological treatment. Nazzal timely appealed.

                                                II.

       We review de novo whether restitution is permitted under the law, United States v. Evers,

669 F.3d 645, 654 (6th Cir. 2012), but we review forfeited arguments for plain error. United

States v. Coppenger, 775 F.3d 799, 803 (6th Cir. 2015). “Whereas forfeiture is the failure to

make the timely assertion of a right, waiver is the ‘intentional relinquishment or abandonment of

a known right.’” United States v. Olano, 507 U.S. 725, 733 (1993) (citation omitted). Nazzal

did not waive his arguments that Z.C. and H.M. are not victims, as the government argues, but he

did forfeit them.

       After objecting to the PSR’s characterization of Z.C. and H.M. as victims, Nazzal stated

at the sentencing hearing that he was withdrawing all objections to the PSR “as part of a global

agreement” with the government. He characterized this agreement as “resolv[ing] all of the

issues that were pending before the Court.” At the sentencing hearing, Nazzal did not object to

the district court’s decision to hold a restitution hearing, and he also did not object to Z.C. and

H.M. being called victims and addressing the court as such. Later, in his response to the

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Nos. 14-1989/1990, United States v. Nazzal

government’s supplemental sentencing memorandum, Nazzal did, however, object to the

characterization of Z.C. and H.M. as victims, as he does on appeal.             Thus, there is some

ambiguity about the significance of Nazzal’s statements about the agreement at the sentencing

hearing and whether he waived or forfeited the argument about Z.C. and H.M.’s victim status.

       The Seventh Circuit addressed an analogous factual situation in United States v. Allen,

529 F.3d 390 (7th Cir. 2008). In that case, the defendant filed a written objection to the

restitution calculation in the PSR, but at sentencing, he did not restate his objection to the PSR

calculation of the amount of loss. Id. at 392–94. The district court specifically asked whether

there were still any objections to the PSR, and Allen responded that there were none, in light of

the fact that the government had subtracted two offense levels for abuse of trust. Id. at 394. The

Seventh Circuit noted that an objection not raised at sentencing is waived only if “the defendant

had a strategic reason to forego the argument, that is, only if the defendant’s counsel would not

be deficient for failing to raise the objection.” Id. at 395 (citation omitted). It accordingly held

that the objection was forfeited, rather than waived, because there was no strategic reason to

forgo at sentencing a challenge to the restitution figure. Id.

       Given the lack of a written agreement with the government, the ambiguity about what

PSR objections Nazzal’s counsel intended to waive at the sentencing hearing, and the absence of

a strategic reason to waive the argument that Z.C. and H.M. are not victims, we follow the

Seventh Circuit’s approach in Allen and apply plain-error review. “A plain error that affects

substantial rights may be considered even though it was not brought to the court’s attention.”

Fed. R. Crim. P. 52(b). To demonstrate plain error, an appellant must prove: (1) an error

occurred in the district court; (2) the error was plain, i.e., obvious or clear; (3) the error affected

the defendant’s substantial rights; and (4) this adverse impact seriously affected the fairness,

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Nos. 14-1989/1990, United States v. Nazzal

integrity, or public reputation of the judicial proceedings. Coppenger, 775 F.3d at 803. The

Supreme Court has directed that “[a]t a minimum, [a] court of appeals cannot correct an error

pursuant to Rule 52(b) unless the error is clear under current law.” Olano, 507 U.S. at 734.

                                                III.

       Because federal courts lack the inherent power to award restitution, we may order

restitution “only when and to the extent authorized by statute.” Evers, 669 F.3d at 655 (citation

omitted).    Victims of Title 18 offenses are eligible to receive restitution, 18 U.S.C.

§ 3663 (a)(1)(A), and a “victim” for the purpose of the statute is “a person directly and

proximately harmed as a result of the commission of an offense . . . including . . . any person

directly harmed by the defendant’s criminal conduct in the course of [a] scheme, conspiracy, or

pattern.” Id. at § 3663(a)(2). The requirement that harm be “direct” means that “the harm to the

victim [must] be closely related to the conduct inherent to the offense, rather than merely

tangentially linked.” In re McNulty, 597 F.3d 344, 352 (6th Cir. 2010).

       In cases involving conspiracy, a court may “order restitution for damage resulting from

any conduct that was part of the conspiracy and not just from specific conduct that met the overt

act requirement of the conspiracy conviction.” United States v. Elson, 577 F.3d 713, 723 (6th

Cir. 2009) (citation omitted). Where a defendant is convicted via plea, “the court should look to

the plea agreement, the plea colloquy, and other statements made by the parties to determine the

scope of the ‘offense of conviction’ for purposes of restitution.” Id. (citations omitted).

       In Elson, we held that a defendant who pled guilty to conspiracy to obstruct justice could

be ordered to pay restitution for losses resulting from a broader conspiracy to commit mail and

wire fraud. Id. at 722, 725. In our reasoning, we looked to Elson’s plea colloquy, which

“included the entire course of Elson’s fraudulent activity” and “reveal[ed] that the parties

intended to include a broader range of acts in the offense of conviction than those related solely

                                                -5-
Nos. 14-1989/1990, United States v. Nazzal

to the conspiracy to obstruct the grand jury investigation.” Id. at 723. We also pointed to

Elson’s plea agreement as establishing his agreement to pay restitution to victims of the broader

conspiracy. Id. at 724.

       In In re McNulty, however, we considered an analogous statute and held that McNulty

was not a victim, because the harms he suffered were neither inherently criminal nor inherent in

the crime of the conspiracy at issue, antitrust conspiracy. 597 F.3d at 351–52. The alleged

harms to McNulty—being fired for refusing to participate in the conspiracy and being

“blackballed” until he stopped assisting the government—were also not sufficiently related to the

offense of conviction for McNulty to qualify as a victim. Id. at 352.

       Here, Nazzal pled guilty to conspiracy to defraud the United States in violation of

18 U.S.C. § 371, so to be victims, Z.C. and H.M. must have been “directly and proximately

harmed” by Nazzal’s criminal conduct in the course of his conspiracy to defraud the United

States, as the conspiracy was defined in his plea colloquy. 18 U.S.C. § 3663(a)(2); Elson,

577 F.3d at 723. In the plea colloquy, Nazzal admitted helping to arrange two fraudulent

marriages that misled the Immigration and Naturalization Service. Nazzal specifically admitted

assisting one of the cooks at his restaurants in arranging a false marriage to one of his waitresses,

in the hope that the former “would become a good cook for [him].” He did not, however, admit

the allegations of abuse that Z.C. and H.M. raised at the sentencing hearing, nor did he

specifically admit arranging the fraudulent marriage that involved Z.C. and Mike Murry, though

the government and the district court referred to this marriage indirectly.

       The relatedness of the harms Z.C. and H.M. allege and the conspiracy would be a close

question under de novo review, but under plain error review, the district court did not err in

determining that the conspiracy directly and proximately caused the harm Z.C. and H.M.

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Nos. 14-1989/1990, United States v. Nazzal

sustained. Any error the district court made is not “clear under current law,” as Olano requires.

507 U.S. at 734. H.M. testified that Nazzal kept their immigration papers and threatened to

deport and otherwise harm them if they ever told anyone about his conduct, while Z.C. testified

that Nazzal abused and threatened her after she married Murry, saying she owed him money and

forcing her to work in his restaurant. Unlike the conduct at issue in McNulty, Nazzal’s actions

were clearly criminal, and it was not plain error for the district court to find that Nazzal’s abuse

of Z.C. and H.M. was part of his efforts to conceal the conspiracy.

                                                IV.

       Nazzal next argues that the district court failed to consider Nazzal’s negative net worth

and cash flow in ordering restitution. We review a restitution order for abuse of discretion.

United States v. Blanchard, 9 F.3d 22, 24–25 (6th Cir. 1993).

       The district court did not abuse its discretion in determining that Nazzal was able to pay

restitution to Z.C. and H.M. When the district court considers whether to order restitution, it

must consider the amount of the loss sustained by each victim as a result of the offense, along

with the defendant’s financial resources, his financial needs and earning ability and those of his

dependents, and “such other factors as the court deems appropriate.”                    18 U.S.C.

§ 3663(a)(1)(B)(i). The government bears the burden of establishing the amount of loss by a

preponderance of the evidence, while the defendant bears the burden of proving his lack of

financial resources and his financial needs. 18 U.S.C. § 3664(e); United States v. Hart, 70 F.3d

854, 863 (6th Cir. 1995); Blanchard, 9 F.3d at 25. Indigency does not bar an order of restitution,

because a defendant’s ability to pay is only one factor for the sentencing court to consider.

Blanchard, 9 F.3d at 24–25. Even if a court finds that a defendant cannot pay a fine, the court

may order restitution if it finds that the defendant is likely to earn future income. United States

v. Sanders, 95 F.3d 449, 456 (6th Cir. 1996). We will infer that the sentencing court took the

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Nos. 14-1989/1990, United States v. Nazzal

appropriate factors into account regarding the defendant’s financial situation when the statutory

factors are discussed in the PSR. See Blanchard, 9 F.3d at 24–25.

       Here, the PSR provides detailed information regarding Nazzal’s financial resources,

expenses, earning ability, and dependents. The district court’s restitution order referred to the

PSR, noting Nazzal’s level of education, ownership of many businesses and properties, and

family obligations. In determining that Nazzal would be able to make nominal restitution

monthly payments, the court acknowledged his businesses’ lack of equity but also cited his

average future earning capacity. At the restitution hearing, Nazzal did not present any proof or

make any objection to the imposition of restitution due to his inability to pay. In his response to

the government’s supplemental sentencing memorandum, he rejected the government’s depiction

of his current financial situation but provided no alternative. Based on these facts and given

Nazzal’s burden to prove his lack of financial resources, the district court did not abuse its

discretion in ordering restitution in the amount of $79,107 to Z.C. and $222,399 to H.M.

                                                V.

       Nazzal also argues that the district court surprised and prejudiced him by not considering

the report of psychologist Dr. Michael Abramsky and not granting a continuance until he was

available to testify. Federal Rule of Criminal Procedure 32 and 18 U.S.C. § 3664 grant a district

court discretion to choose the procedures for a restitution hearing “that will best aid the court in

assessing the amount of loss.” United States v. Vandeberg, 201 F.3d 805, 813–14 (6th Cir.

2000). Overall, these procedures must “afford[] the defendant a reasonable opportunity to

respond,” Coppenger, 775 F.3d at 804, and Rule 32 indicates “that a court must afford parties an

opportunity to be heard on any disputed sentencing issue.” Vandeberg, 201 F.3d at 814. A

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Nos. 14-1989/1990, United States v. Nazzal

suitable procedure “is one that precludes the possibility of prejudicial surprise.” Coppenger,

775 F.3d at 804.

       Here, the district court afforded Nazzal an adequate opportunity to be heard regarding

potential restitution. Nazzal received the restitution requests regarding Z.C. and H.M., with

supporting expert reports and affidavits, on January 7 and 8, 2014. He responded on January 23,

2014 without exhibits, expert reports, or notice that he intended to rely on an expert opinion. In

his response, Nazzal did, however, challenge the methodology and credentials of the counselor

whose report H.M. presented. At the restitution hearing on April 15, 2014, Nazzal cross-

examined the counselor, again challenging her qualifications to diagnose mental illnesses and the

basis of her diagnosis.

       After the presentation by Z.C. and H.M., the district court asked Nazzal if he had

anything to present, and he attempted to introduce a report from Dr. Abramsky. He also asked

that Dr. Abramsky be allowed to testify at a later time. Z.C. and H.M. objected that they had

only received his report the previous day—April 14—even though it was dated January 27 and

that Dr. Abramsky was not present to be cross-examined. They also objected that based on their

limited investigation, “perhaps this Court should not qualify [Dr. Abramsky] as an expert”

because of a previous suspension based on misconduct and a then-pending complaint by the

psychiatric board.    Finally, Z.C. and H.M. objected on the grounds that allowing Nazzal

additional time, after he had seen all of their information, was “substantially prejudicial.” Nazzal

countered that he was unaware there would be testimony at the restitution hearing. The district

court declined to grant a continuance or to consider Dr. Abramsky’s report, citing the two

previous continuances, one at the request of Nazzal and one at the request of Z.C. and H.M.

                                               -9-
Nos. 14-1989/1990, United States v. Nazzal

       Though perhaps it would have been preferable for the district court to consider Dr.

Abramsky’s report in tandem with Z.C. and H.M.’s objections to it instead of declining to

consider the report altogether, the court’s failure to do so did not prejudicially surprise Nazzal.

He knew the basis of the restitution arguments, including the diagnosis of H.M. by a counselor,

beginning in early January 2014. Nazzal did not mention Dr. Abramsky or his intention to rely

on his opinion until the day before the twice-postponed restitution hearing, even though the

report was prepared over two months prior to that date. Moreover, Nazzal made the same

arguments he says Dr. Abramsky would have presented in his response to the government’s

supplemental sentencing memorandum, in his cross-examination of H.M.’s counselor, and in his

presentation to the court. Given these facts, Nazzal received a reasonable opportunity to respond

to the government’s restitution case and was not prejudicially surprised.

                                               VI.

       Finally, Nazzal argues that Z.C. was a co-conspirator and therefore was not entitled to

restitution. He cites United States v. Lazarenko, 624 F.3d 1247 (9th Cir. 2010), in support of his

argument.   In Lazarenko, however, the Ninth Circuit distinguished the general rule that a

participant in a crime cannot recover restitution from the special circumstances present in

another case, United States v. Sanga, 967 F.2d 1332 (9th Cir. 1992). Lazarenko, 624 F.3d at

1252. Sanga’s analysis applies here as well. The Ninth Circuit noted:

       Our analysis [in Sanga] was informed by the fact that Quinlob [the victim/co-
       conspirator] was not named as a co-conspirator in the indictment; that she had a
       very minor role in the conspiracy; and that her persecution began after the
       completion of her small part of the conspiracy. Although she was technically a
       co-conspirator, her very small role was unconnected to the overall conspiracy;
       indeed, had she known the full extent of the conspiracy—that she would be forced
       to be a slave and rape victim—she would not have entered the conspiracy.

 Id. Here, too, Z.C. was never named as a co-conspirator in a charging document, and she had a

minor role in the conspiracy as a participant in a false marriage. Her persecution began after

                                              - 10 -
Nos. 14-1989/1990, United States v. Nazzal

Nazzal helped arrange her marriage, and had she known what was to come, she would never

have participated. Thus, Z.C.’s role in the conspiracy does not preclude her from receiving

restitution.

                                                VII.

        For the foregoing reasons, we affirm the district court’s restitution order.

                                                - 11 -
Nos. 14-1989/1990, United States v. Nazzal

          ROGERS, Circuit Judge, concurring. I concur in the majority opinion, notwithstanding a

concern that Nazzal’s abuse of Z.C. and H.M.—however terrible—was not really part of

Nazzal’s efforts to conceal the conspiracy. The best way for Nazzal to conceal the conspiracy

would have been to let the victims alone. Nazzal was apparently threatening to reveal the

criminal acts constituting the conspiracy. Such threats are not inherent in the crime of the

conspiracy, but instead are more in the nature of collateral blackmail. Such independent crimes

should be prosecuted independently, or be brought under tort law. In the absence of sufficiently

clear law to that effect, however, it is correct to uphold the restitution orders on plain error

review.

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