Court Opinion

ID: 4653409
Source: CourtListenerOpinion
Date Created: 2021-01-22 01:00:20.140526+00
Date Added: 2024-06-11T07:51:42.444949
License: Public Domain

Case: 19-51028     Document: 00515714850          Page: 1    Date Filed: 01/21/2021

              United States Court of Appeals
                   for the Fifth Circuit
                                                                     United States Court of Appeals
                                                                              Fifth Circuit

                                                                            FILED
                                                                      January 21, 2021
                                   No. 19-51028                        Lyle W. Cayce
                                                                            Clerk

   United States of America,

                                                             Plaintiff—Appellee,

                                       versus

   Jan Abraham Nel,

                                                         Defendant—Appellant.

                  Appeal from the United States District Court
                       for the Western District of Texas
                           USDC No. 3:17-CR-2152-1

   Before Haynes, Higginson, and Oldham, Circuit Judges.
   Per Curiam:*
          Jan Abraham Nel pleaded guilty to wire fraud. As part of his sentence,
   the district court ordered him to pay $448,170.14 in restitution. On appeal,
   Nel argues that the restitution amount violated the Mandatory Victims
   Restitution Act (“MVRA”), 18 U.S.C. § 3663A. For the reasons below, we
   AFFIRM.

          *
            Pursuant to 5th Circuit Rule 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   opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
Case: 19-51028     Document: 00515714850              Page: 2   Date Filed: 01/21/2021

                                       No. 19-51028

                                  I.    Background
          Nel and his business partner, Manuel Isaac Garciagadoy, entered into
   a scheme to defraud the U.S. Government by claiming large income tax
   refunds for the 2014 and 2015 tax year. Both Nel and Garciagadoy knew at
   the time of their respective filings that the amounts claimed as interest
   income and income tax withholdings were fraudulent. Although Nel never
   received a tax refund, Garciagadoy received one for $1,454,681.99 from the
   Internal Revenue Service (“IRS”) for his 2015 tax return. Several days later,
   the IRS reversed payment and recovered $1,006,511.85 from Garciagadoy.
   However, Garciagadoy had already spent $430,785.37 on various
   expenditures, including a $41,000 Buick Enclave. Relevant here, the Buick
   was later seized by the IRS.
          Nel eventually pleaded guilty to one count of wire fraud. As part of
   his plea agreement, he agreed to provide full restitution to all charges
   contained in the indictment and forfeit certain assets (not including the
   Buick). After adopting Nel’s presentence investigation report in full, the
   district court sentenced Nel to 46 months in prison, three years of supervised
   release, and ordered him to pay $448,170.14 in restitution, jointly and
   severally with Garciagadoy, for the difference between the amount
   Garciagadoy received in tax refund and the amount the IRS recovered. Nel
   did not object to the restitution amount at his sentencing hearing. Shortly
   after, Nel timely appealed.

                           II.     Standard of Review
          The district court resolves any disputes as to the amount of restitution
   owed based on a preponderance of evidence. 18 U.S.C. § 3664(e). The
   Government has the burden of demonstrating the amount of loss sustained
   by a victim as a result of the offense. Id. “On occasion, however, we have
   shifted to the defendant the burden to show any entitlement to a credit for

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Case: 19-51028        Document: 00515714850              Page: 3      Date Filed: 01/21/2021

                                          No. 19-51028

   value bestowed on the victim.” United States v. De Leon, 728 F.3d 500, 506
   (5th Cir. 2013).
           We review an unpreserved restitution award argument for plain
   error. 1 See United States v. Maturin, 488 F.3d 657, 659–60 (5th Cir. 2007).
   To demonstrate plain error, a defendant must show that “(1) there is an
   error, (2) the error is clear or obvious, and (3) the error affects his substantial
   rights.” United States v. Coil, 442 F.3d 912, 916 (5th Cir. 2006). If those
   conditions are met, this court may grant relief if “the error seriously affects
   the fairness, integrity, or public reputation of the judicial proceedings.”
   United States v. Ibarra, 465 F.3d 596, 606 (5th Cir. 2006).

                                   III.    Discussion
           On appeal, Nel raises a sole issue: whether the district court’s failure
   to credit the value of the Buick, forfeited 2 and seized by the IRS, resulted in
   a restitution order that exceeds the amount permitted under the MVRA.
   According to Nel, allowing the IRS to receive restitution and forfeiture would
   result in an impermissible “double recovery” because both remedies would
   be going to the same victim—the IRS—without a reduction in the restitution
   amount. Nel maintains that a reduction was required because the Buick was
   “returned” to the IRS. See 18 U.S.C. § 3663A(b)(1). Because the MVRA
   does not allow a court to award restitution greater than the victim’s actual
   loss, see United States v. Sharma, 703 F.3d 318, 322 (5th Cir. 2012), Nel

           1
             We do not apply a harmless error analysis to restitution “because an order of
   restitution must be limited to losses caused by the specific conduct underlying the offense
   of conviction.” De Leon, 728 F.3d at 507 (quotation omitted).
           2
             Nel does not contest the Government’s assertion that the Buick was
   administratively forfeited.

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                                          No. 19-51028

   concludes that the district court’s restitution order is unlawful. We disagree
   with Nel’s characterization.
           It is important to recognize that forfeiture and restitution are distinct
   legal remedies with different purposes. United States v. Taylor, 582 F.3d 558,
   566 (5th Cir. 2009) (per curiam). Forfeiture is a punitive remedy, which aims
   to disgorge “any ill-gotten gains from a defendant.” Id. (quotation omitted).
   In contrast, restitution is remedial in nature and “operates to make the victim
   of the crime whole.” Id. (quotation omitted). Because they serve distinct
   purposes, an order for both restitution and forfeiture is permissible, even if
   the Government is the recipient of both sums. Id.
           The parties do not dispute these general principles; instead, they
   disagree about the application of these principles to the facts of this case. Nel
   argues that, unlike previous cases, this situation does not involve distinct
   Government entities receiving the forfeited asset and the restitution award—
   here, the IRS seized the forfeited Buick and is entitled to restitution as the
   victim of the offense. Consequently, Nel maintains that the IRS will receive
   a double recovery through both forfeiture and restitution.
           Despite Nel’s double recovery assertion, he has not provided any
   proof that seizing the Buick was equivalent to permanently keeping its
   proceeds. In the absence of such evidence, we need not decide the question
   of whether restitution and forfeiture to the same governmental entity results
   in a double recovery. 3 See id. at 567 (“Generally, courts decline to offset

           3
             Nel’s citation to United States v. Ruff, 420 F.3d 772 (8th Cir. 2005) does not
   compel a different conclusion. In Ruff, the defendant “attempted to establish enforcement
   of the court’s restitution order would result in a double recovery” and asked whether the
   forfeited asset had been sold. Id. at 776. Here, Nel merely observed “[t]he exact value of
   the seized asset . . . [wa]s uncertain.” Given the lack of evidence that Nel attempted to
   establish a double recovery and the more deferential plain error standard of review, Ruff is
   distinguishable on these grounds.

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                                           No. 19-51028

   restitution when there is no evidence that doing so would result in double
   recovery to the victim.”). Nor does he cite to controlling precedent that
   would make such an award erroneous—much less plainly erroneous—under
   the circumstances presented in this case. 4 See United States v. Jordan, 945
   F.3d 245, 254 (5th Cir. 2019) (acknowledging that an error is clear and
   obvious, for the purpose of plain error review, only “if controlling circuit
   court or Supreme Court precedent has clarified that the action, or inaction is
   an error”), cert. denied, 140 S. Ct. 2698 (2020), and cert. denied sub nom. Wise
   v. United States, No. 20-5692, 2020 WL 6037392 (U.S. Oct. 13, 2020).
           In light of the highly deferential standard of review, we AFFIRM the
   district court’s order of restitution.

           4
              Nel also fails to demonstrate that the district court has the authority to offset the
   restitution order under the circumstances presented for review. See United States v. Sanjar,
   876 F.3d 725, 750–51 (5th Cir. 2017) (agreeing with other circuits that “a district court is
   without statutory authority to offset restitution with amounts forfeited” because the
   MVRA requires courts to order full restitution without an exception for amounts forfeited);
   see also 18 U.S.C. §§ 3663A, 3664.

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