A Federal Judge Can't Reopen A Sentencing Hearing, Even When There's $17 million In Restitution At Stake

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It's hard, when things go wrong, not to seek a mulligan. And we all get off on the wrong foot sometimes.

When a case is in front of a federal judge for sentencing, though, a mulligan is only very rarely available.

The Fifth Circuit case of United States v. Murray shows why.

498474_eraser.jpgThree Men and a Ponzi (scheme)

Ted Murray, David Lapin, and Jeffrey Wigginton were charged with mail fraud, conspiracy to commit mail fraud, securities fraud, and money laundering. The charges arose out of a Ponzi scheme.

Mr. Murray took his case to trial and was convicted of everything but the money laundering.

Mr. Wigginton entered a plea to conspiracy to commit mail and securities fraud. In the plea,

He agreed to pay "full restitution to the victim(s) regardless of the counts of conviction"; admitted" that any fine or restitution imposed by the Court will be due and payable immediately upon sentencing"; and pledged that he would "not attempt to avoid or delay punishment." Wigginton also agreed to "waive the right to appeal the sentence imposed or the manner in which it was determined," unless the sentence exceeded the statutory maximum.

Mr. Lapin pled guilty to misprison of a felony. I'm thinking he either had great facts or a good lawyer.

Each man was sentenced, at the latest, on March 1, 2010.

At the sentencing hearings, the district court determined that none of the men owed restitution.

A Federal Prosecutor Later Discovered a $ 17,564,534.21 Mistake

The government, a few months after the sentencing hearings, realized that it meant to seek restitution. In the amount of $17,564,534.21.

It filed a motion to have the district court order restitution. The men - who were trying to move on after the sentencing hearing - objected.

The district court held a number of hearings. Finally, it ordered that the men pay the restitution.

They appealed.

A District Court Can't Reopen A Sentencing Willy-Nilly

The Fifth Circuit set the table of issues this way,

A trial judge lacks authority to correct a sentencing error unless Congress has provided otherwise. Outside of such a provision of authority, errors at sentencing may be corrected only on appeal. The court below amended defendants' sentences, requiring defendants to make restitution to their victims. We are pointed to no potential source of authority for this change of sentence except the Mandatory Victims Restitution Act of 1996 (MVRA).

The MVRA, though, doesn't let a district court go back to reopen a sentencing hearing when the district court has already made a finding, under the MVRA, that restitution wasn't appropriate because, in the language of the statute

(A) the number of identifiable victims is so large as to make restitution impracticable; or (B) determining complex issues of fact related to the cause or amount of the victim's losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process

What's great about this is that in two of the men's cases, the district court didn't make this finding explicitly. Rather, by adopting the PSRs as factual findings - which contained language that the number of victims was not determinable - and the Fifth Circuit held that this counted as the required finding under the statute.

So, the MVRA doesn't let the district court reopen the case.

Then the general rule that a federal sentencing can't be reopened applies, and the district court's imposition of $17 million and change in restitution was vacated.

When Is An Appeal Waiver Not An Appeal Waiver

Mr. Wigginton gave up his right to appeal his sentence, however. The government argued that this meant he also gave up his right to appeal the new restitution order.

The Fifth Circuit disagreed.

Because an appeal waiver has to be unambiguous, if it could be interpreted two ways, it won't be enforceable.

Here, the court of appeals found that the appeal waiver could be read to apply to "any sentence imposed at the end of any sentencing process regardless of how extended and illegal" or it could mean "an appeal of a sentence imposed as long as it's done during the authorized sentencing process."

Personally, I find that second reading a little strained, but I'm glad it worked out for Mr. Wigginton.

Because the appeal waiver can be read two ways, it didn't bar his appeal.

And the men avoided a massive restitution judgment.

About This Blog

The Federal Criminal Appeals Blog is published by The Kaiser Law Firm PLLC in Washington, DC. The Kaiser Law Firm represents people who have been charged with federal crimes, are under federal investigation, or have a federal criminal appeal.

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