Court Opinion

ID: 57806
Source: CourtListenerOpinion
Date Created: 2010-04-26 02:16:04+00
Date Added: 2024-06-11T09:39:01.213594
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                          January 9, 2008
                                       No. 06-51689
                                                                      Charles R. Fulbruge III
                                                                              Clerk

UNITED STATES OF AMERICA,

                                                  Plaintiff-Appellee,
v.

LINDA WILLIAMS DWYER,

                                                  Defendant-Appellant.

                   Appeal from the United States District Court
                        for the Western District of Texas
                                No. 1:06-CR-171

Before HIGGINBOTHAM, DAVIS, and SMITH, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*

       Linda Dwyer contends that a restitution order erroneously includes costs
incurred by the victim that are not recoverable under the Mandatory Victims
Restitution Act of 1996 (“MVRA”), 18 U.S.C. § 3663A. Because Dwyer raises this

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
                                  No. 06-51689

argument for the first time on appeal, we review for plain error and affirm.

                                         I.
      Dwyer pleaded guilty of bank fraud. As part of the sentence, she is or-
dered to pay $1,465,835.45 in restitution to Lawrence Miller, the victim. The
restitution includes $545,736.45 in net losses, $235,444 for interest payments on
brokerage account debt, $283,064 used to pay margin calls, $350,000 in attor-
neys’ fees, and $51,591 in accounting fees.
      Dwyer served as Miller’s bookkeeper from 1997 to July 2005. When she
began working for him, she was under court order to disclose to any potential
employer her history of embezzlement, credit card theft, and forgery. She failed
to abide by that order and did not inform Miller of her criminal history. As his
bookkeeper, she had access to his personal accounts, the accounts of several of
his businesses, and the trusts he had established for his two children.
      Dwyer used that access to forge Miller’s signature and write checks to her-
self or to third parties on her behalf. To divert funds to her personal use, she
destroyed checks written by Miller to pay real estate mortgages, income taxes,
and life insurance. Because she had destroyed the checks Miller had written to
the Internal Revenue Service “I.R.S.”), he received notices regarding payments
owed the I.R.S., which Dywer destroyed as well. She also lied to the I.R.S. about
Miller’s whereabouts, stating that he had been in a serious accident and was re-
covering in France. All of this resulted in I.R.S. liens on Miller’s house and other
real estate. Dwyer also forged authorization to Miller’s investment accounts and
obtained margin loans on his brokerage accounts, which resulted in the interest
charges and margin calls.
      Additionally, on the day Miller became aware of Dwyer’s malfeasance and

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                                   No. 06-51689

fired her, she immediately went to a bank and diverted another $30,000 to her-
self. She also destroyed bank statements and other documents, ensuring that
it would be almost impossible for Miller to determine the repercussions of her ac-
tions. Finally, she refused to assist Miller in ascertaining the full extent of his
liabilities resulting from her conduct.
      Miller employed a law firm and accountants in an attempt to determine
the damage done by Dwyer and to sue her. The fruits of their investigation were
turned over to the F.B.I. and the U.S. Attorney’s Office, enabling the government
to prosecute Dwyer without conducting a significant investigation. The attor-
neys retained by Miller also pursued claims against third-party financial institu-
tions and Dwyer’s family members who had received embezzled funds; they also
brought garnishment claims against financial institutions where Dwyer or her
family members held accounts, and negotiated settlements with financial insti-
tutions and credit card companies. The accountants retained by Miller aided the
investigation of Dwyer, helped repair the damage she had caused, and set up
new accounting systems for Miller.

                                          II.
      To find plain error, we must decide that (1) there is error; (2) the error is
plain; and (3) the error affects a substantial right. United States v. Olano, 507
U.S. 725, 732-34 (1993). Even if we find plain error, “we will not exercise our
discretion to correct a forfeited error unless it seriously affects the fairness, in-
tegrity, or public reputation of judicial proceedings.” United States v. Branam,
231 F.3d 931, 933 (5th Cir. 2000) (citing Olano, 507 U.S. at 735-36).
      Dwyer was ordered to pay restitution under the MVRA, which requires a

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                                  No. 06-51689

person convicted of a crime of fraud or deceit to “pay [the victim] an amount
equal to the greater of the value of the property on the date of the damage, loss,
or destruction; or the value of the property on the date of sentencing.” 18 U.S.C.
§ 3663A(a), (b)(1)(B), (c)(1)(A)(ii). The defendant must also reimburse the victim
for “lost income and necessary child care, transportation, and other expenses in-
curred during participation in the investigation or prosecution of the offense.”
Id. § 3663A(b)(4). Apart from those expenses authorized in § 3663A(b)(4), a res-
titution award cannot reimburse a victim for consequential losses, United States
v. Onyiego, 286 F.3d 249, 256 (5th Cir. 2002); the award is limited to losses dir-
ectly resulting from the offense of conviction, United States v. Martin, 488 F.3d
657, 660-61 (5th Cir. 2007).
      For purpose of determining whether § 3663A authorizes the instant award
of restitution, we divide the amount of the restitution order into five parts: Mil-
ler’s net losses, the interest owed on the fraudulently obtained loans, the cost of
satisfying the margin calls, the attorneys’ fees, and the accounting fees. Dwyer
does not contest that she must reimburse Miller’s net, direct losses; she also
concedes that the interest payments owed on loans she fraudulently obtained
from Miller’s brokerage accounts are properly included. Thus, she contests the
inclusion of the cost of satisfying the margin calls, the attorneys’ fees, and the
accounting fees.
      When Dwyer fraudulently obtained loans from Miller’s brokerage ac-
counts, stock in those accounts was automatically pledged as collateral for the
loans. Much of the stock serving as collateral was Dell Computer stock. Miller’s
broker issued the margin calls because the price of Dell’s stock was falling, hence
the value of the collateral was declining, and the broker wanted cash, either by

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                                   No. 06-51689

sale of the stock or by payment.
      Dwyer argues that the margin calls resulted from the decline of Dell’s
stock, which cannot be attributed to her. But for Dwyer’s fraudulent loans, how-
ever, Miller’s Dell stock would not have been pledged as collateral and open to
a margin call. Whether the margin calls were caused by the drop in Dell’s stock
price and not attributable to Dwyer is a question of fact, and “questions of fact
capable of resolution by the district court can never constitute plain error.”
United States v. Chung, 261 F.3d 536, 540 (5th Cir. 2001). Thus, inclusion of the
margin call expenses in the restitution amount was not plain error.
      Furthermore, inclusion of the cost to satisfy the margin calls did not affect
Dwyer’s substantial rights, because the court could have imposed a fine equal
to the amount of the margin call expenses. In United States v. Miller, 406 F.3d
323, 330-31 (5th Cir. 2005), we held that, where a court was “statutorily empow-
ered to impose a fine in addition to restitution,” a restitution order that included
a potentially impermissible payment to the I.R.S. did not affect substantial
rights, because “the district court could have, and indeed likely would have im-
posed a fine, making any error harmless.” In that case, we noted that the only
reason the court did not impose a fine and restitution was that the defendant
could not afford both. Id.
      Here, the court could have imposed a fine up to $1 million, 18 U.S.C.
§ 1344, but chose not to, stating, “There will be no fine in the case, because of the
restitution, but there is a $100 mandatory assessment.” 3 Rawle 20. Thus, even if
it was error to include the margin call expenses, the court could have, and likely
would have, imposed a fine equal to the margin call cost, rendering the inclusion
harmless error.

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                                   No. 06-51689

      We address the last two elements of the restitution orderSSthe attorneys’
fees and accounting feesSStogether. The government asserts that § 3663(b)(4)
authorizes these payments because they were incurred during participation in
the investigation or prosecution of the offense, because the attorneys’ and ac-
countants’ investigation served as the basis for the prosecution. Furthermore,
Miller’s attorneys and accountants cooperated with the F.B.I. to the extent that
they turned over information and materials collected during their investigation.
The government also avers that the attorneys’ investigations of third party fi-
nancial institutions and credit card companies was made necessary by Dwyer’s
crime and were, therefore, properly considered as part of the investigation of
Dwyer herself. This is especially the case given Dwyer’s unwillingness to cooper-
ate with Miller in determining the extent of her crime.
      Dwyer contends that § 3663A(b)(4) authorizes reimbursement only if there
is an ongoing government investigation or prosecution at the time the expenses
are incurred. According to Dwyer, because Miller’s attorneys’ and accounting
fees were incurred before the information was turned over to the government,
while there was no ongoing government investigation or prosecution, § 3663A-
(b)(4) does not authorize inclusion of the fees in the restitution award.
      Given that there is no precedent resolving the question whether expenses
incurred before the government’s investigation were incurred “during” the inves-
tigation for purposes of § 3663A(b)(4), it is not plain that the court’s inclusion of
those fees was “‘obvious,’ ‘clear,’ or ‘readily apparent,’ [an error that is] so con-
spicuous that ‘the trial judge and prosecutor were derelict in countenancing [it],
even absent the defendant’s timely assistance detecting [it].’” Miller, 406 F.3d
at 330 (quoting United States v. Dupre, 117 F.3d 810, 817 (5th Cir. 1997) (quot-
ing United States v. Calverley, 37 F.3d 160, 163 (5th Cir. 1994) (en banc))). In

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                                   No. 06-51689

Miller, where the defendant challenged an order to pay restitution to the victim
of his embezzlement and to the I.R.S. for failure to pay taxes on the embezzled
funds, we said that, although the defendant’s argument had “some intuitive ap-
peal,” “[a]bsent any precedent directly supporting [his] contention, it cannot be
said that the alleged error was ‘plain’ for purposes of our review.” Id.
      We continued in Miller and, as noted above, held that even if the court had
erred, the defendant was not entitled to relief, because the error did not affect
a substantial right, in light of the fact that the court could have imposed a fine
as well as restitution. Id. at 330-31. We concluded that, in light of “the novelty
of Miller’s claim (a fact that belies the ‘plain’ nature of the supposed error), coup-
led with the likely harmless nature of the purported error, we cannot say that
the trial court’s action was plain error.” Id. at 331.
      The instant case is like Miller. Dwyer’s argument against including the
attorneys’ fees and accounting fees is not supported by any precedent, rendering
the decision to include those fees less than plainly wrong. Additionally, the court
in this case, like the court in Miller, chose not to impose a fine because of the res-
titution, thereby rendering harmless any error in including the costs of the mar-
gin calls, the attorneys’ fees, or accounting fees.
      The judgment of sentence is AFFIRMED.

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