Court Opinion

ID: 4690355
Source: CourtListenerOpinion
Date Created: 2021-05-26 19:00:34.735766+00
Date Added: 2024-06-11T08:04:59.650893
License: Public Domain

PUBLISHED

                       UNITED STATES COURT OF APPEALS
                           FOR THE FOURTH CIRCUIT

                                      No. 20-4248

UNITED STATES OF AMERICA,

                    Plaintiff - Appellee,

             v.

GERALD ALEX BOUTCHER,

                    Defendant - Appellant.

Appeal from the United States District Court for the Eastern District of Virginia, at
Alexandria. Leonie M. Brinkema, District Judge. (1:19−cr−00176−LMB−2)

Argued: March 12, 2021                                          Decided: May 26, 2021

Before NIEMEYER, KEENAN, and HARRIS, Circuit Judges.

Dismissed by published opinion. Judge Keenan wrote the opinion, in which Judge
Niemeyer and Judge Harris joined.

ARGUED: Erin McCampbell Paris, LIPSITZ GREEN SCIME CAMBRIA LLP, Buffalo,
New York, for Appellant. Daniel Taylor Young, OFFICE OF THE UNITED STATES
ATTORNEY, Alexandria, Virginia, for Appellee. ON BRIEF: Barry N. Covert, LIPSITZ
GREEN SCIME CAMBRIA LLP, Buffalo, New York; Brian Denton West, THE WEST
LAW GROUP, P.C., McLean, Virginia, for Appellant. G. Zachary Terwilliger, United
States Attorney, Jamar K. Walker, Assistant United States Attorney, Kimberly R. Pedersen,
Assistant United States Attorney, Aidan Taft Grano, Assistant United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.
BARBARA MILANO KEENAN, Circuit Judge:

       In this appeal, the defendant challenges the district court’s orders of restitution and

forfeiture, which were imposed based on his involvement in a scheme of unlawful “short

sales” 1 of three residential properties in Virginia. Pursuant to a plea agreement, Gerald

Boutcher pleaded guilty to conspiracy to commit bank fraud, in violation of 18 U.S.C.

§ 1349. The district court sentenced Boutcher to a three-year term of probation, and

entered orders of restitution and forfeiture, each in the amount of $227,512.07. 2 Boutcher

challenges his sentence only with respect to these orders of restitution and forfeiture. 3

Upon our review, we do not reach the merits of Boutcher’s arguments, because they are

barred by the appeal waivers in his plea agreement. We therefore grant the government’s

motion to dismiss Boutcher’s appeal.

       1
         “Short sales” allow a homeowner who cannot satisfy her mortgage obligation to
discharge that obligation by selling the property for less than what is owed. See United
States v. Stone, 866 F.3d 219, 222 (4th Cir. 2017).
       2
         We observe that there appear to be two clerical errors in the judgment. First, the
judgment order lists as the basis for the charge of “conspiracy to commit bank fraud” 18
U.S.C. § 1343, which statute prohibits the commission of wire fraud. The statutes cited in
the indictment are 18 U.S.C. § 1344, prohibiting the commission of bank fraud, and 18
U.S.C. § 1349. Section 1349, which is also listed in the plea agreement, prohibits
conspiracy or attempt to commit the offenses prohibited in 18 U.S.C. §§ 1341-1351, and
thus sets forth the proper statutory basis for the charge of conspiracy to commit bank fraud.
Second, the judgment order contains an error in the name of the restitution statute, as
explained further below.
       3
         Orders of restitution and forfeiture in a criminal case constitute part of the
defendant’s sentence. See United States v. McLeod, 972 F.3d 637, 640 (4th Cir.
2020) (restitution); United States v. Martin, 662 F.3d 301, 306 (4th Cir. 2011) (forfeiture).
                                              2
                                             I.

       Over the course of a few years, Boutcher and his co-conspirator, Alkesh Tayal,

worked together to defraud several banks and financial institutions with respect to “short

sales” and refinancing transactions for three residential properties. Generally, the scheme

involved the following conduct. Initially, Boutcher posed as a buyer in one fraudulent

short sale of a property in which Tayal had a financial interest. Tayal intended to retain

ownership of the property and, ultimately, to reduce his mortgage payment on that

property. Also, the two men engaged in fraudulent short sales of other properties to sell or

“flip” the properties at higher prices to gain a profit.     In violation of the financial

agreements that both men signed with various institutions, Boutcher and Tayal did not

disclose their commercial relationship with each other. They also solicited others to pose

as representative realtors on the fraudulent transactions, creating the appearance that the

transactions were conducted at “arms-length.”

       A federal grand jury returned a multiple-count indictment against Boutcher and

Tayal. Boutcher was charged with conspiracy to commit bank fraud, in violation of 18

U.S.C. § 1349 (Count 1), and conspiracy to commit money laundering, in violation of 18

U.S.C. §§ 2, 1956(h) (Count 5).        The indictment included a forfeiture notice, in

conformance with the provisions of 18 U.S.C. § 982(a) and Federal Rule of Criminal

Procedure 32.2(a). After Boutcher agreed to plead guilty to Count 1 of the indictment, the

government voluntarily dismissed Count 5.

       In his plea agreement, Boutcher agreed to waive “the right to appeal the conviction

and any sentence within the statutory maximum . . . on the grounds set forth in 18 U.S.C.

                                             3
§ 3742 or on any ground whatsoever other than an ineffective assistance of counsel claim

that is cognizable on direct appeal” (the global appeal waiver). Section 3742 specifies four

typically permissible grounds for a defendant to appeal a district court’s sentence: (1) legal

error; (2) misapplication of sentencing guidelines; (3) imposition of a sentence greater than

the applicable guidelines range; and (4) imposition of a “plainly unreasonable” sentence

for which there is no sentencing guideline. 18 U.S.C. § 3742(a).

       The plea agreement also provided that “restitution is mandatory pursuant to 18

U.S.C. § 3663A,” the Mandatory Victims Restitution Act (the Restitution Act). Notably,

the Restitution Act mandates that a sentencing court order restitution in the full amount of

the victims’ losses. 18 U.S.C. § 3663A; United States v. Leftwich, 628 F.3d 665, 668 (4th

Cir. 2010). With respect to the amount of restitution, the plea agreement stated that

Boutcher owed “at least $7,500,” but that the court ultimately would determine the

appropriate amount.

       Additionally, in the plea agreement, Boutcher agreed “to forfeit all interests in any

fraud-related asset that [he] own[ed] or over which he exercise[d] control, directly or

indirectly.” Boutcher also agreed that the “conduct described in the charging instrument

and Statement of Facts provides a sufficient factual and statutory basis for the forfeiture of

the property sought by the government.” And finally, Boutcher agreed “to waive all

constitutional and statutory challenges to forfeiture in any manner[,] including direct

appeal[,] to any forfeiture carried out in accordance with this [agreement] on any grounds,

including that the forfeiture constitutes an excessive fine or punishment” (the forfeiture

appeal waiver).

                                              4
       At a hearing conducted under Federal Rule of Criminal Procedure 11, Boutcher

stated that he had a college degree and was not presently under the influence of drugs or

alcohol. Boutcher also acknowledged that he had read the terms of the plea agreement,

discussed those terms with his attorney, and understood them. After the district court

discussed with Boutcher the terms of the plea agreement’s global appeal waiver and

forfeiture appeal waiver, Boutcher stated that he understood those terms.            He also

confirmed his understanding that the court could impose a restitution amount higher than

the $7,500 amount referenced in the plea agreement, and that he likewise was subject to

the imposition of an order of forfeiture. The district court accepted Boutcher’s guilty plea

under the above-stated terms.

       The government later proposed a preliminary order of forfeiture against Boutcher

in the amount of $227,512.07. In submitting this proposed figure, the government relied

on an analysis prepared and submitted to the court by Rachel Bingham, a forensic

accountant. Bingham concluded that $227,512.07 represented the profit that Boutcher and

Tayal had derived from their fraudulent scheme. Despite Boutcher’s claim that he had

received only $7,500 of the profits, the government asserted that Boutcher should be

subject to forfeiture of the full amount of the scheme’s profits, including all the funds that

had been deposited into a business bank account over which both men had “signatory

authority.” 4

       4
         “Signatory authority” gives an individual a “[l]icense to make a decision,
[especially] to withdraw money from an account or to transfer a negotiable instrument.”
Signatory Authority, Black’s Law Dictionary (11th ed. 2019).
                                              5
       With respect to restitution, the probation officer proposed in the presentence report

that restitution be set at $1,012,000, to compensate the five financial institutions identified

as victims of the scheme. The government advocated for this amount of restitution based

on Bingham’s analysis.      Depending on the particular transaction at issue, Bingham

calculated the losses incurred by the various financial institutions based on either (1) the

difference between the fraudulent short sale prices for the residential properties and the

later refinancing amount obtained, or (2) the difference between the fraudulent short sale

price and the sales price reached with a third party. Boutcher objected to Bingham’s

methodology and to the proposed amount of restitution, contending that only one financial

institution suffered a loss totaling $3,182.27 in unpaid interest.

       The district court initially stated at the sentencing hearing that it intended to set

restitution at $7,500 based on the money Boutcher individually received from the scheme.

However, the government maintained that if the court rejected the restitution amount of

$1,012,000, the court should set restitution at the same amount as the forfeiture figure,

$227,512.07, because this amount reflected the money within Boutcher’s control. 5 In

accord with the government’s argument, the district court ordered both restitution and

forfeiture in the amount of $227,512.07. Additionally, the court imposed a three-year term

of supervised probation.

       In its final judgment, the court assessed $227,512.07 in restitution “pursuant to the

Victim and Witness Restitution Act,” an apparent misnomer that does not identify the name

       5
        Later in the hearing, the government confirmed with the court that restitution
should only reflect the loss to a victim rather than the gains from the scheme.
                                              6
of any statute addressing restitution. However, the restitution order entered the same day

stated that “pursuant to 18 U.S.C. § 3663A(a)(1) [the Restitution Act] the defendant is

ordered to pay restitution in the amount of $227,512.07.” And, in accord with the

government’s motion and the court’s entry of a preliminary order of forfeiture, the final

judgment directed forfeiture in the amount of $227,512.07, pursuant to 18 U.S.C. § 982(a)

and Rule 32.2(b). Boutcher appeals from the district court’s judgment.

                                              II.

                                              A.

       Boutcher argues on appeal that the district court made several errors in imposing the

orders of restitution and forfeiture. As explained in more detail below, Boutcher contends

that the court’s errors rendered its orders on restitution and forfeiture “illegal,” an argument

that Boutcher contends is outside the scope of both the global appeal waiver and the

forfeiture waiver. In response, the government asks us to dismiss Boutcher’s appeal,

contending that his arguments are barred by the terms of both waiver provisions.

       We review an appellate waiver de novo to determine whether the waiver is

enforceable. United States v. McLeod, 972 F.3d 637, 640 (4th Cir. 2020); United States v.

Adams, 814 F.3d 178, 182 (4th Cir. 2016). “When the government seeks to enforce an

appeal waiver and has not breached the plea agreement, we will enforce the waiver if it is

valid and if the issue being appealed falls within” the scope of the waiver. United States

v. Beck, 957 F.3d 440, 445 (4th Cir. 2020).

                                               7
       A “valid” appeal waiver is one entered by the defendant knowingly and intelligently,

a determination that we make by considering the totality of the circumstances. United

States v. Thornsbury, 670 F.3d 532, 537 (4th Cir. 2012). When a district court questions a

defendant during a Rule 11 hearing regarding an appeal waiver and the record shows that

the defendant understood the import of his concessions, we generally will hold that the

waiver is valid. United States v. McCoy, 895 F.3d 358, 362 (4th Cir. 2018).

       In the present case, Boutcher does not dispute the validity of either the global appeal

waiver or the forfeiture appeal waiver. Our review of the record, including the language

of the waivers, the court’s colloquy with Boutcher, and Boutcher’s statements to the court

demonstrating his understanding of the rights he agreed to waive, confirms that Boutcher

executed the waivers knowingly and intelligently. Thus, we conclude that the waiver

provisions in the plea agreement are valid.

       We therefore turn to consider whether Boutcher’s arguments on appeal fall within

the scope of those waiver provisions. When we interpret plea agreements, we apply

principles of “contract law to ensure that each party receives the benefit of the bargain,”

and look to the plain language of the agreement, construing it in the “ordinary sense.”

United States v. Davis, 714 F.3d 809, 814 (4th Cir. 2013) (citation omitted).

       Because plea agreements necessarily implicate a defendant’s constitutional rights,

we analyze those agreements with a greater degree of scrutiny than we would evaluate a

contract in a civil context. Id. In conducting our review, we hold the government, which

has a greater negotiating position, to a higher standard for any imprecise language or

ambiguity that appears in plea agreements. See id. at 814-15. Nonetheless, courts cannot

                                              8
rewrite agreements or construe ambiguities when none exist. United States v. Under Seal,

902 F.3d 412, 418 (4th Cir. 2018). “If the plea agreement is unambiguous as a matter of

law, and there is no evidence of governmental overreaching, we should interpret and

enforce the agreement accordingly.” United States v. Jordan, 509 F.3d 191, 195 (4th Cir.

2007).

         These general principles inform our analysis in the present case. We also are

mindful of the fact that Boutcher obtained the benefit of the government’s voluntary

dismissal of the conspiracy to commit money laundering charge, in exchange for his

numerous concessions outlined above. We therefore turn to consider whether the waivers

contained in the plea agreement bar Boutcher’s arguments challenging the restitution and

forfeiture orders.

                                              B.

         With respect to restitution, Boutcher argues that the district court committed

reversible error: (1) in failing to identify the statutory basis for restitution in its judgment

order; and (2) in failing to calculate the victims’ losses under the required standard. 6

Despite the broad language in the global appeal waiver, in which Boutcher agreed to waive

his appeal of his sentence “on any ground,” Boutcher contends that the court’s errors were

acts exceeding the court’s authority, rendering the restitution order “illegal” and outside

the scope of the global appeal waiver. We disagree with Boutcher’s position.

         To the extent Boutcher contends that the district court failed to make necessary
         6

factual findings to explain its decision to impose restitution in the amount of $227,512.07,
we reject that argument as barred by the global appeal waiver.
                                               9
       Initially, we reject Boutcher’s contention that our decision in United States v.

Broughton-Jones, 71 F.3d 1143 (4th Cir. 1995), compels a conclusion that the district

court’s failure to cite the Restitution Act in the judgment order left the court without

authority to impose restitution. In Broughton-Jones, we refused to enforce an appeal

waiver when the defendant challenged a restitution order imposed under the Victim and

Witness Protection Act (VWPA), 18 U.S.C. § 3663, on the ground that the VWPA did not

permit restitution for her offense of conviction. 71 F.3d at 1147-49. We agreed, explaining

that a restitution order imposed without statutory authority is akin to an “illegal . . . sentence

of imprisonment that exceeds the statutory maximum.” Id. at 1147 (internal quotation

marks omitted); see also Thornsbury, 670 F.3d at 539. We explained that a defendant’s

challenge to an illegal term of imprisonment lies outside the scope of an otherwise

valid appeal waiver. Broughton-Jones, 71 F.3d at 1147. Accordingly, we held that the

defendant’s challenge to an unauthorized restitution order was not barred by her appeal

waiver. Id. at 1147-49.

       Here, however, Boutcher does not dispute that he was subject to mandatory

restitution under the Restitution Act. Indeed, his plea agreement makes clear that the

Restitution Act provided the statutory basis for restitution in this case. Moreover, during

his plea colloquy, Boutcher confirmed that he understood and consented to the terms of his

plea agreement, including the requirement of mandatory restitution under the Restitution

Act.

       Consistent with the plain language of Boutcher’s plea agreement, the district court’s

restitution order, which was entered on the same day as the final judgment order, stated

                                               10
that restitution was ordered “pursuant to” the Restitution Act. The restitution order further

stated that under “18 U.S.C. § 3663A(a)(1) [the Restitution Act,] the defendant is ordered

to pay restitution in the amount of $227,512.07.” Accordingly, the court’s clerical error in

the final judgment order did not affect the court’s authority to impose the terms of

restitution set forth in the restitution order, which cited the proper statutory source of the

court’s authority. We therefore conclude that Boutcher’s challenge to the restitution order

based on clerical error is barred by the plain language of the global appeal waiver.

       Boutcher argues, nevertheless, that the district court exceeded its authority in fixing

restitution at $227,512.07 on the basis of Boutcher’s purported profit, instead of calculating

the victims’ losses as required under the Restitution Act. 7 Any order of restitution made

under the Restitution Act must be issued in accordance with 18 U.S.C. § 3664, which

establishes procedures for calculating restitution amounts. United States v. Harvey, 532

F.3d 326, 339 (4th Cir. 2008). Once a district court concludes that restitution is appropriate,

“the court shall order restitution to each victim in the full amount of each victim’s losses

as determined by the court and without consideration of the economic circumstances of the

defendant.” 18 U.S.C. § 3664(f)(1)(A).

       A defendant’s economic gain from his criminal activity generally is an inappropriate

basis on which to calculate the victims’ losses for purposes of restitution. Harvey, 532

       7
         To the extent Boutcher challenges the restitution order by arguing that only one of
the victims suffered loss based on Boutcher’s conduct, in the amount of $3,182.27, that
argument plainly is barred by the global appeal waiver because it does not call into question
the legality of the restitution order. See United States v. Cohen, 459 F.3d 490, 497-500
(4th Cir. 2006).
                                              11
F.3d at 340-41 (citing United States v. Galloway, 509 F.3d 1246 (10th Cir. 2007)). Indeed,

in Harvey, we concluded that the district court “abused its discretion” by calculating

restitution using this inappropriate standard. Id. at 341. Notably, however, we did not hold

that the court exceeded its authority in ordering restitution on this basis, but merely

discussed the error in terms of the court’s exercise of its discretion. Id.

       Here, even if we assume that the district court erroneously fixed restitution based

on the amount Boutcher profited from the scheme, such error did not impact the court’s

authority to order restitution under the Restitution Act. Cf. Beck, 957 F.3d at 444-45

(holding that a defendant’s argument challenging the statutory basis for his conviction, on

the ground that the statute did not define a criminal offense, called into question the court’s

authority to convict and fell outside the scope of the appeal waiver). Instead, any such

mistake was merely a legal error involving the methodology employed by the court. See

Cohen, 459 F.3d at 497-500 (holding that because the district court’s restitution award was

within the scope of the court’s authority under the Restitution Act, the defendant’s

challenge to the amount of restitution ordered fell within the scope of his appeal waiver).

       We also observe that the probation officer recommended, and the government urged

based on Bingham’s analysis, that the court impose more than $1 million in restitution

based on the total losses incurred by the victims. Although Boutcher disputed that loss

amount and method of calculation, the district court, on this record, could have imposed

                                              12
that much higher amount of restitution. 8 Thus, by rejecting the $1 million figure and

imposing a restitution amount of $227,512.07, the district court may have erred in its

calculation, but did not issue an “illegal” order exceeding its authority under the Restitution

Act. See Thornsbury, 670 F.3d at 539 (explaining that a court can commit “legal error” in

imposing sentence, which does not necessarily render the sentence “illegal” in the context

of applying an appeal waiver); Davis, 714 F.3d at 812 (citing Cohen, 459 F.3d at 498)

(explaining that courts lack the inherent authority to order restitution, and must rely on a

statutory source for such action). Because Boutcher agreed to waive the right to appeal his

sentence, which included restitution, “on any ground,” we conclude that Boutcher’s

challenge to the amount of restitution is barred under the terms of his global appeal waiver.

                                              C.

       With respect to the forfeiture order, Boutcher asserts that the “district court

exceeded its authority” by imposing forfeiture in the amount of $227,512.07, because Tayal

received most of those funds placed in their shared business bank account. Boutcher argues

that he was subject to forfeiture only for the amount of $7,500 that he personally profited

from the conspiracy, not for the proceeds he never received that had been deposited into

       8
         To the extent Boutcher argues on appeal that two of the named entities do not
qualify as financial institutions, this factual argument plainly is encompassed by the global
appeal waiver.

                                              13
the account. 9 Thus, Boutcher contends that the district court lacked authority to enter the

forfeiture order against him for the entire amount of $227,512.07.

       We reject Boutcher’s attempt to avoid the forfeiture appeal waiver and the other

terms of his plea agreement. Under the plain language of the plea agreement, Boutcher

agreed to “forfeit all interests in any fraud-related asset that [he] own[ed] or over which he

exercise[d] control, directly or indirectly.” Boutcher also agreed that the statement of facts

provided a valid basis for the forfeiture of property sought by the government. The

statement of facts makes clear that Tayal and Boutcher “both had signatory authority for”

and thus, “control” of, all the funds in their shared business bank account. Boutcher

therefore consented that all the assets in the bank account could be included in an order of

forfeiture entered against him. 10

       9
         Boutcher also argues that the court did not comply with certain procedures in
Federal Rule of Criminal Procedure 32.2(b) by failing to conduct a hearing regarding the
amount of forfeiture. We conclude that any such errors do not call into question the court’s
authority to order forfeiture. Therefore, we conclude that Boutcher’s arguments regarding
Rule 32.2 are barred by the forfeiture appeal waiver.
       10
           We also note that a recent decision of the First Circuit directly undercuts
Boutcher’s argument that he did not “control,” and thus could not be subject to forfeiture
of, the full amount of the proceeds in the shared business bank account to which he and
Tayal had access. See United States v. Cadden, 965 F.3d 1, 40 (1st Cir. 2020) (explaining
that the rule in Honeycutt v. United States, 137 S. Ct. 1626 (2017), prohibiting joint and
several liability for forfeiture when co-conspirator did not obtain proceeds of crime, is
inapplicable when a party jointly controls a bank account, because that party “actually
acquire[s]” all the funds in the account); cf. United States v. Chittenden, 896 F.3d 633, 636,
639 (4th Cir. 2018) (court is not authorized to order forfeiture under 18 U.S.C. § 982(a)(2)
of proceeds that the defendant never acquired but remained solely in the possession of her
co-conspirator).
                                             14
       Based on these clear concessions that Boutcher made in the plea agreement, we

conclude that Boutcher is precluded by his forfeiture appeal waiver from challenging the

amount of forfeiture on appeal. As noted above, under the forfeiture appeal waiver,

Boutcher agreed to waive “all constitutional and statutory challenges to forfeiture in any

manner[,] including direct appeal[,] to any forfeiture carried out in accordance with this

[agreement].” Accordingly, the unambiguous terms of the plea agreement, including the

language of the forfeiture appeal waiver, bar Boutcher’s present challenge to the district

court’s forfeiture order.

                                           III.

       For these reasons, we grant the government’s motion to dismiss Boutcher’s appeal,

because his arguments are barred by the appeal waiver provisions in his plea agreement.

                                                                             DISMISSED

                                           15