Bussell v. United States - Opposition

No. 07-1262

 

In the Supreme Court of the United States

LETANTIA BUSSELL, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

GREGORY G. GARRE
Acting Solicitor General
Counsel of Record
MATTHEW W. FRIEDRICH
Acting Assistant Attorney
General
SANGITA K. RAO
Attorney
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTIONS PRESENTED

1. Whether, absent fundamental ambiguity in the question, a false statement conviction may be based on a jury's determination that the defendant gave a know ingly false answer to the question as she understood it.

2. Whether the district court's restitution order was authorized under the Victim and Witness Protection Act of 1982 (VWPA), 18 U.S.C. 3663 (2000 & Supp. V 2005).

3. Whether petitioner's Sixth Amendment rights were violated when the district court, in determining pe titioner's sentence, purportedly relied in part on conduct underlying a charge on which the jury had returned a verdict of not guilty.

 

 

In the Supreme Court of the United States

No. 07-1262

LETANTIA BUSSELL, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals after remand (Pet. App. 1a-29a) is reported at 504 F.3d 956. The prior opinion of the court of appeals (Pet. App. 30a-55a) is reported at 414 F.3d 1048. The various orders of the district court (Pet. App. 56a-116a) are unpublished.

JURISDICTION

The judgment of the court of appeals was entered on September 27, 2007. A petition for rehearing was denied on December 5, 2007 (Pet. App. 119a-120a). On Febru ary 22, 2008, Justice Kennedy extended the time within which to file a petition for a writ of certiorari to and in cluding April 3, 2008, and the petition was filed on that date. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Following a jury trial, petitioner was convicted in the United States District Court for the Central District of California on multiple counts of bankruptcy fraud and tax evasion. The court of appeals affirmed petitioner's convictions but remanded for resentencing. Pet. App. 30a-55a. On remand, the district court sentenced peti tioner to 36 months of imprisonment and ordered resti tution in the amount of $2,284,172.87. The court of ap peals affirmed in part and reversed and remanded in part. Id. at 1a-29a.

1. a. Petitioner was a practicing dermatologist. Her late husband was an anaesthesiologist. In 1992, facing mounting tax and bank debts, the couple hired two at torneys to assist in pre-bankruptcy planning. Pet. App. 2a-3a; Gov't C.A. Br. 5.

Upon the attorneys' advice, petitioner reorganized her dermatology practice into three separate corpora tions: BBL Medical Management, Inc. (BBL), Beverly Hills Dermatology Medical Corp. (Beverly Hills Medi cal) and L.B. Bussell, MD Inc. (L.B. Bussell). BBL and Beverly Hills Medical were held in the names of nomi nee owners. Petitioner was the owner and officer of re cord for L.B. Bussell. BBL received the practice's gross receipts, paid expenses and overhead, and retained the profits of the business. The second corporation, Beverly Hills Medical, served as a conduit through which peti tioner transferred between 10% and 20% of BBL's prof its to the third corporation, L.B. Bussell, which paid petitioner an artificially reduced salary. Pet. App. 3a; Gov't C.A. Br. 9-10. The attorneys also helped peti tioner and her husband set up various corporations to conceal ownership of a Utah condominium, a San Diego farm, and receipt of disability insurance income. Pet. App. 3a-4a; Gov't C.A. Br. 12-15.

b. On March 7, 1995, petitioner and her husband filed a joint bankruptcy petition. Petitioner reported total assets of approximately $1.8 million and total liabil ities exceeding $4.6 million. Pet. App. 4a. Petitioner failed to disclose her interests in BBL and Beverly Hills Medical. Gov't C.A. Br. 16-17. Specifically, petitioner omitted mention of either entity in her responses to Question 12 on Schedule B (requiring debtor to list "[s]tock and interests in incorporated and unincorpo rated businesses"), Question 33 of Schedule B (requiring disclosure of "[o]ther personal property of any kind not already listed"), and Question 16 of the Statement of Financial Affairs (requiring debtor to "list the names and addresses of all businesses in which the debtor was an officer, director, partner, or managing executive of a corporation"). Pet. App. 133a-139a.

Petitioner and her husband also failed to disclose the true market value of the Utah condo, thereby concealing their interest in $500,000 in equity in that property, as well as additional assets that they had fraudulently transferred to nominee owners or concealed. Gov't C.A. Br. 17-18.

In August 1995, the bankruptcy court discharged all their scheduled debts, except a claim by Provident Life Insurance Company in pending litigation, in the amount of $2,293,527.09. Pet. App. 4a.

2. In 2000, a grand jury returned a 17-count indict ment charging petitioner, her husband, and one of their former attorneys with various fraud-related offenses. At trial, petitioner and her husband argued that they acted in good faith and relied on the advice of their law yers. Pet. App. 4a.

The jury found petitioner guilty of conspiracy to con ceal assets in contemplation of bankruptcy, to make false statements in the bankruptcy, and to conceal assets of the bankruptcy estate, in violation of 18 U.S.C. 371 (Count 1); concealing an ownership interest in BBL (Count 2) and in Beverly Hills Medical (Count 3), in vio lation of 18 U.S.C. 152(1) and (2); making false state ments in the bankruptcy petition, including omission of interests in BBL and Beverly Hills Medical (Count 5) and omission of involvement as managing executives of those entities (Count 6), in violation of 18 U.S.C. 2 and 18 U.S.C. 152(3); and willfully attempting to evade a substantial portion of income tax owed for tax years 1983-1987, in violation of 26 U.S.C. 7201 (Count 12). The jury found petitioner not guilty of concealing ownership of the Utah condo (Count 4); making a false oath and account that she was not actively involved with any cor porations other than L.B. Bussell, except on a passive investment basis (Count 11); and willfully attempting to evade a substantial portion of income tax owed for 1996 (Count 17). Pet. App. 4a-5a, 33a.1

3. At petitioner's original sentencing, the district court agreed with the recommendations of the Presen tence Report (PSR paras. 77-81) and increased the of fense level by 13 levels, based on a finding that peti tioner's intended loss equaled $3,057,927.09, the full amount of debt petitioner attempted to discharge in bankruptcy. The district court agreed with the govern ment that, given petitioner's true financial position, she would have been able to pay her debts and would not have obtained bankruptcy relief if she had not engaged in the conspiracy to conceal her assets. Pet. App. 5a; Gov't C.A. Br. 21-22.

The district court imposed a mid-range Guidelines sentence of 36 months. The district court also ordered restitution of $2,393,527, which equaled the amount of debt actually discharged in bankruptcy, plus an unpaid settlement of $100,000 to Provident for a debt petitioner did not succeed in discharging. The district court as sessed costs of prosecution of $62,614, and imposed a $50,000 fine. Pet. App. 5a-6a.

4. The court of appeals affirmed petitioner's convic tions, vacated the restitution and cost orders, and or dered a limited remand pursuant to United States v. Ameline, 409 F.3d 1073 (9th Cir. 2005) (en banc). Pet. App. 30a-55a.

As relevant here, petitioner argued that the district court erred by submitting to the jury the charges based on answers to Question 12 from Schedule B and Ques tion 16 from the Statement of Financial Affairs because, according to petitioner, they were "fundamentally am biguous" questions. Pet. C.A. Br. 40-48 (No. 02-50495). Petitioner also argued that the evidence was insufficient to prove that petitioner's answers to the relevant ques tions were false as she understood the questions. The court of appeals rejected both arguments. The court explained that, although the answer to a "fundamentally ambiguous" question may not as a matter of law form the basis of a false statement prosecution, "we do not invalidate a conviction 'simply because the questioner and respondent might have different interpretations' of the relevant questions." Pet. App. 44a (quoting United States v. Culliton, 328 F.3d 1074, 1079 (9th Cir. 2003), cert. denied, 540 U.S. 1111 (2004)). Rather, the court of appeals explained, it examines "the context of the ques tion and answers, as well as other extrinsic evidence, to determine whether the respondent provided false an swers to the questions 'as he understood [them].'" Id. at 44a-45a (quoting Culliton, 328 F.3d at 1079). The court thereafter concluded that the evidence showed that peti tioner provided knowingly false answers by failing to disclose her interest and management role in BBL and Beverly Hills Medical. Id. at 45a-47a.

With respect to sentencing, the court of appeals de ferred consideration of petitioner's challenges to the loss amount and remanded the case pursuant to Ameline for the district court to consider whether it would have im posed a materially different sentence had it known that the Guidelines were only advisory. Pet. App. 53a. The court also vacated the restitution order and remanded for the district court "to determine the actual losses caused by [petitioner's] fraudulent conduct-that is, to compare 'what actually happened with what would have happened if [she] had acted lawfully.'" Id. at 54a-55a (second set of brackets in original) (quoting United States v. Feldman, 338 F.3d 212, 220-221 (3d Cir. 2003)).

5. On remand, the district court declined to reopen the sentencing proceedings, finding that the 36-month sentence imposed was "just and reasonable" and that it would not have imposed a materially different sentence under an advisory Guidelines regime. Pet. App. 88a. The court essentially reaffirmed its approximately $2.3 million restitution order, finding that, based on peti tioner's count 1 conspiracy conviction, petitioner "caused actual losses" to victims in the total amount of the bank ruptcy debt scheduled to be discharged. Id. at 89a.

6. The court of appeals affirmed in part, reversed in part, and remanded. Pet. App. 1a-29a.

The court upheld petitioner's 36-month term of im prisonment, rejecting petitioner's various challenges to the district court's calculation of the loss amount under the Guidelines, including her claim that the loss amount should not include equity in the Utah condo because she was acquitted of concealing that equity. Pet. App. 6a- 15a. The court of appeals noted that "[t]he district court is entitled to take into account all relevant conduct, charged and uncharged," in sentencing a defendant. Id. at 12a n.8.

The court of appeals also affirmed the restitution order. The panel rejected petitioner's challenge to the methodology used by the district court to calculate ac tual loss. The panel upheld the district court's determi nation "that the value of the assets exceeded the debts to be discharged and therefore the actual loss to the creditors equaled the amount of debt actually dis charged in the bankruptcy." Pet. App. 20a.

In addition, the court of appeals rejected petitioner's argument that, under Hughey v. United States, 495 U.S. 411 (1990), the district court could order restitution based only on the specific assets she was convicted of concealing in count 2 (her interest in BBL) and count 3 (her interest in Beverly Hills Medical). Pet. App. 20a- 21a. The court of appeals held that Hughey was "of no avail to [petitioner] because, after Hughey was decided, Congress amended the VWPA by expanding the defini tion of 'victim,' in part to overrule that decision." Id. at 21a. The court of appeals reasoned that, "'[u]nder the amended statute, when someone is convicted of a crime that includes a scheme, conspiracy, or pattern of crimi nal activity as an element of the offense, the court can order restitution for losses resulting from any conduct that was part of the scheme, conspiracy, or pattern of criminal activity.'" Id. at 22a (quoting United States v. Reed, 80 F.3d 1419, 1423 (9th Cir.), cert. denied, 519 U.S. 882 (1996)). Because petitioner "was convicted of a crime that included a conspiracy 'as an element of the offense,'" the court of appeals concluded, "the district court did not err in considering all of the concealed as sets for purposes of determining the actual loss to the bankruptcy creditors." Pet. App. 22a-23a.2

ARGUMENT

1. Petitioner asserts (Pet. 13-24) that there is a cir cuit conflict on whether a false statement conviction may be based on the answer to a question, absent fundamen tal ambiguity, as long as the jury finds that the defen dant falsely answered the question as she understood it. There is no square conflict, petitioner did not argue for a contrary rule below, and the court of appeals' rule (as applied here) comports with due process. Petitioner's claim thus warrants no further review.

a. The court of appeals applied its rule that a jury should determine whether the defendant gave a false answer to the question as she understood it, unless the question is so "fundamentally ambiguous" that "men of ordinary intelligence cannot arrive at a mutual under standing of its meaning." United States v. Culliton, 328 F.3d 1074, 1078 (9th Cir. 2003) (internal quotation marks omitted), cert. denied, 540 U.S. 1111 (2004). Petitioner does not dispute that all the other circuit courts, with the lone exception of the Fourth Circuit, agree with the Ninth Circuit. See United States v. Hatch, 434 F.3d 1, 5 (1st Cir. 2006); United States v. Damrah, 412 F.3d 618, 626 (6th Cir. 2005); United States v. Farmer, 137 F.3d 1265, 1268-1269 (10th Cir. 1998); United States v. Rob bins, 997 F.2d 390, 395 (8th Cir.), cert. denied, 510 U.S. 948 (1993); United States v. Manapat, 928 F.2d 1097, 1099-1100 (11th Cir. 1991); United States v. Ryan, 828 F.2d 1010, 1015 (3d Cir. 1987); United States v. Lighte, 782 F.2d 367, 372-373 (2d Cir. 1986); United States v. Martellano, 675 F.2d 940, 942 (7th Cir. 1982); United States v. Thompson, 637 F.2d 267, 270 (5th Cir. 1981); United States v. Chapin, 515 F.2d 1274, 1279-1280 (D.C. Cir.), cert. denied, 423 U.S. 1015 (1975).

Petitioner alleges (Pet. 15-16) a circuit conflict based on the Fourth Circuit's decision in United States v. Race, 632 F.2d 1114, 1120 (1980). A review of cases from the Fourth Circuit, however, shows that there is no square conflict. In Race, the Fourth Circuit held that the defendants could not be prosecuted under 18 U.S.C. 1001 for submitting false and fraudulent invoices to the government, when those invoices were submitted pursu ant to an arguably ambiguous contractual provision. The court reasoned that the contractual language could not support the government's construction but added that, even if the contractual language were ambiguous, the result would have been the same. 632 F.2d at 1119- 1120. The court noted, however, that there was no evi dence in that case to support a finding that the defen dants had acted in bad faith in seeking reimbursement (e.g., by construing the contractual language as the gov ernment did). Id. at 1120-1121. Petitioner cites no Fourth Circuit case holding that a defendant could not be prosecuted for perjury for making a false statement when, even if the question was somewhat ambiguous, there was evidence that the defendant understood the question as the government did.

Further, in more recent cases, the Fourth Circuit has relied on the rule that a prosecution for perjury is fore closed only if the question is "fundamentally ambigu ous." See United States v. Heater, 63 F.3d 311, 327 (1995) ("In this case * * * we find no 'fundamental am biguity' that would have required the district court to remove the questions from the jury's consideration."), cert. denied, 516 U.S. 1083 (1996); see also United States v. Bollin, 264 F.3d 391, 411 (noting that in Heater the court had affirmed a perjury conviction "because the question did not contain any fundamental ambiguity that would have prevented the jury from considering the question"), cert. denied, 534 U.S. 935 (2001), and 535 U.S. 989 (2002); United States v. Gunther, No. 96-4804, 1998 WL 29259, at *3-*4 (Jan. 28, 1998) (unpublished) (affirming defendant's perjury conviction because "[a]n inquiry is not rendered fundamentally ambiguous merely because 'the words in question have different meanings in different situations'") (quoting Lighte, 782 F.2d at 375). Indeed, even in a case where the facts made the Fourth Circuit "sympathetic" to the defen dant's claim that the questions posed to him were sus ceptible to an alternative interpretation that would have made his answers truthful, the Fourth Circuit nonethe less affirmed the perjury conviction because it was "sat isfied" that the context "provided the jury an adequate basis upon which to conclude that [the defendant] under stood" the questions as the government intended and "that he deliberately lied" in his responses. United States v. Bryan, 58 F.3d 933, 960 (1995). In light of those cases, petitioner is unable to demonstrate a square conflict between the Ninth Circuit's rule (adopted by every other circuit) and that of the Fourth Circuit.

In any event, this case is not a good vehicle for re solving any tension between the Ninth Circuit and the Fourth Circuit. Petitioner argued below only that the false statement allegations in the indictment were im permissible because they were based on "fundamentally ambiguous" questions. She did not ask the courts to apply a more protective standard, nor did she bring the courts' attention to the Fourth Circuit's decision in Race. See Pet. C.A. Br. 40-48 (No. 02-50495). Accord ingly, because the lower courts had no occasion to con sider whether a different standard should be applied, this case is a poor vehicle for resolution of that issue.

b. The Ninth Circuit applied the correct standard in evaluating any ambiguity in the challenged questions that were the basis of some of the false statement allega tions in the indictment. "Almost any question or answer can be interpreted in several ways when subjected to ingenious scrutiny after the fact." Chapin, 515 F.2d at 1279-1280 (quoting United States v. Ceccerelli, 350 F. Supp. 475, 478 (W.D. Pa. 1972)). To preclude prosecu tion whenever a question is somewhat ambiguous, as petitioner advocates, even though the evidence is suffi cient for the jury to conclude beyond a reasonable doubt that a particular defendant understood the question as it was intended and answered it falsely, would severely limit the reach of false statements statutes and thereby significantly impede Congress's efforts to promote truth-telling in government matters.

Contrary to petitioner's contention (Pet. 17-18), the rule applied by the Ninth Circuit and the other courts of appeals does not violate due process principles of fair notice. Under the court of appeals' rule, a jury may find a defendant guilty only after concluding that the defen dant understood the question as the government did and, having that understanding, answered falsely. Such a rule, with its requirement of a finding that a defendant had knowledge of the falsity of her statement before allowing conviction, is more than sufficient to give a per son of ordinary intelligence fair notice of the type of con duct that is forbidden. Cf. Posters 'N' Things, Ltd. v. United States, 511 U.S. 513, 526 (1994) (scienter re quirement in criminal statute "assists in avoiding any vagueness problem").

Petitioner's reliance (Pet. 17, 19) on Bronston v. United States, 409 U.S. 352 (1973), is also misplaced. In Bronston, this Court held that an individual could not be convicted of perjury under 18 U.S.C. 1621 for giving an answer that was literally true, even if it was not respon sive and arguably misleading. In that case, the defen dant was asked under oath whether he had ever had any accounts in Swiss banks. 409 U.S. at 354. He answered that his company had previously had an account in a Swiss bank, but failed to disclose that he had personally had such an account as well. Ibid. The defendant's an swer was literally true, because the company had in fact had such an account. Ibid. The Court reversed the de fendant's conviction. Id. at 362. Bronston's rule is not helpful to petitioner because it is "limited to cases in which the statement is indisputably true, though mis leading because it was unresponsive to the question asked. Different rules govern statements that are am biguous, in which the statement may be true according to one interpretation and false according to another." United States v. Camper, 384 F.3d 1073, 1076 (9th Cir. 2004), cert. denied, 546 U.S. 827 (2005); see United States v. DeZarn, 157 F.3d 1042, 1051 (6th Cir. 1998) (Bronston defense "applies in cases where a perjury defendant responds to a question with an unresponsive answer"); Ryan, 828 F.2d at 1014 (Bronston would "only be operative in those cases in which the defendant has been accused of making a statement that is both unre sponsive and literally true"). Here, petitioner does not contend that her responses were "indisputably true" but misleading because not responsive. She contends only that she did not respond falsely to one reasonable con struction of an allegedly ambiguous question. There fore, Bronston is inapplicable.3

2. Petitioner challenges (Pet. 24-37) the restitution order based on her claim that it is premised in part on conduct of which she has not been convicted, "whether because of acquittal or because the conduct was never charged in the indictment." Pet. 36. She argues that the district court's restitution order is not authorized under the Victim and Witness Protection Act of 1982 (VWPA)4 and that this Court's review is warranted because the circuits are in conflict on whether restitution can be based on acquitted conduct. She also contends that the court of appeals' interpretation of the VWPA violates the Sixth Amendment right to trial by jury. Signifi cantly, in light of the district court's methodology for calculating restitution, this case does not present the questions on which petitioner seeks review. In any event, the court of appeals correctly upheld the restitu tion order, and there is no square conflict among the circuit courts. Petitioner's claims therefore do not merit further review.

a. The VWPA provides that a court may order a "defendant convicted of an offense" under the federal criminal code to "make restitution to any victim of such offense." 18 U.S.C. 3663(a)(1)(A) (Supp. V 2005). In Hughey v. United States, 495 U.S. 411 (1990), the Court held that the VWPA "authorize[d] an award of restitu tion only for the loss caused by the specific conduct that is the basis of the offense of conviction." Id. at 413. Af ter that decision, Congress amended the VWPA (Com prehensive Thrift and Bank Fraud Prosecution and Tax payer Recovery Act of 1990, Pub. L. No. 101-647, § 2509, 104 Stat. 4863) to provide that, when an offense "in volves as an element a scheme, conspiracy, or pattern of criminal activity," restitution may be ordered to "any person directly harmed by the defendant's criminal con duct in the course of the scheme, conspiracy, or pat tern." 18 U.S.C. 3663(a)(2).

Here, the district court ordered restitution based on the conspiracy alleged in Count 1. Petitioner was con victed of conspiring to conceal assets in contemplation of bankruptcy, to make false statements under oath in rela tion to bankruptcy, and to conceal assets of the bank ruptcy estate. Pet. App. 148a-149a. Although Count 1 specified three assets concealed by petitioner- her in terest in BBL, her interest in Beverly Hills Medical, and her equity in the Utah condo-the indictment made clear that the specified "means of the conspiracy" and "overt acts" were not all-inclusive. Id. at 150a, 161a. The indictment also alleged as "the purpose of the con spiracy" not merely the protection of those three spe cific assets, but enabling petitioner and her husband "to discharge their outstanding debts * * * while main taining control over and access to" property concealed in anticipation of bankruptcy and property of the bank ruptcy estate. Id. at 149a. The district court found that restitution was owed to all the creditors whose claims had been discharged in bankruptcy because, if petitioner had acted lawfully and not engaged in a conspiracy to conceal assets, she would not have been eligible for bankruptcy relief because her assets exceeded her liabil ities. Id. at 88a-89a; see id. at 24a (upholding district court's restitution order because "had [petitioner] acted lawfully, the value of the assets exceeded the debts to be discharged and therefore the actual loss to the creditors equaled the amount of debt actually discharged in the bankruptcy"). Because all those creditors were "di rectly harmed by the defendant's criminal conduct in the course of the * * * conspiracy," restitution was justi fied under the text of the VWPA. 18 U.S.C. 3663(a)(2).

At the threshold, in light of the district court's meth od for calculating restitution, this case is a poor vehicle for considering whether restitution may be based on acquitted conduct or conduct not specifically charged in the indictment, because the restitution ordered here is not specifically tied to such conduct. Those issues would be presented if, for example, the district court had based restitution on the total value of all items it found to be illegally concealed and, in calculating that total, had in cluded the value of the Utah condo (which petitioner was acquitted of fraudulently concealing in Count 4) as well as assets not specifically identified in the indictment (but found to be illegally concealed by a preponderance of the evidence). The district court, however, employed a different approach: it found that, had petitioner not engaged in the Count 1 conspiracy, she would not have been entitled to discharge in bankruptcy because her assets (which would necessarily include all her assets, whether fully disclosed, inadvertently omitted, or ille gally concealed) were greater than her liabilities. Thus, it was not necessary to the district court's restitution order that it find that petitioner had conspired illegally to conceal her interest in the Utah condo or to fail to disclose her interests in other property not specified in the indictment. Regardless, those assets would have been included in the district court's calculation of the total assets to attribute to petitioner in determining whether she would have been entitled to a discharge in bankruptcy. Accordingly, this case does not present the questions on which petitioner seeks review.

b. Further, and contrary to petitioner's suggestion, the decision below does not directly conflict with rulings from other courts of appeals. Indeed, petitioner does not even allege a conflict among the circuits on whether restitution may be based on conduct not specifically charged in the indictment in a conspiracy case. She only alleges a conflict on whether acquitted conduct may be used in calculating restitution, where such conduct is also in furtherance of a scheme or conspiracy of which the defendant has been convicted.

Petitioner principally asserts a conflict with the Sev enth Circuit's decision in United States v. Kane, 944 F.2d 1406, 1414 (1991). In that case, the district court had ordered a defendant to pay restitution for the full amount of loss caused by a bank fraud conspiracy, even though the defendant had been acquitted of two out of five specific incidents of submitting a fraudulent loan application, each of which had been alleged as overt acts of the conspiracy. The Seventh Circuit vacated the res titution order, holding that "the jury's acquittal" on two counts "must be taken as a judgment that the conspiracy did not include the acts charged in those counts." Id. at 1414. As the court of appeals here correctly reasoned, however, reliance on the ruling in Kane is "misplaced because the acts in that case occurred well before the effective date of this amendment to the VWPA," Pet. App. 21a-22a n.12, which "changed the definition of 'vic tim' to partially overrule Hughey and allow restitution beyond the specific acts of conviction." United States v. Grice, 319 F.3d 1174, 1177 (9th Cir.), cert. denied, 539 U.S. 950 (2003). Because the Seventh Circuit might well come to a different conclusion based on its interpreta tion of the amended statute, resolution of any tension between the approach taken in Kane and the other cir cuits would be premature.

The other Seventh Circuit cases cited by petitioner do not pose any conflict. They either do not involve con victions for offenses that contain a scheme, conspiracy, or pattern as an element,5 or simply recite the standard that restitution must be tied to the offense of conviction without addressing acquitted conduct.6 In agreement with the Ninth Circuit, the Seventh Circuit acknowl edges that, where the offense of conviction includes a scheme, conspiracy, or pattern as an element, restitu tion may be ordered for all "actions pursuant to that scheme," even if not specifically charged in the indict ment. United States v. Bennett, 943 F.2d 738, 740 (1991), cert. denied, 504 U.S. 987 (1992); see United States v. Turino, 978 F.2d 315, 319 (7th Cir. 1992), cert. denied, 508 U.S. 975 (1993).

Nor is petitioner able to demonstrate a square con flict with the Third Circuit. Petitioner's reliance on United States v. Pedroni, 45 Fed. Appx. 103, cert. de nied, 537 U.S. 1045 (2002), and United States v. Console, 13 F.3d 641 (1993), cert. denied, 511 U.S. 1076, and 513 U.S. 812 (1994)-both of which rejected a defendant's argument that a restitution award was excessive-is misplaced. In dicta, the Third Circuit did state (despite little analysis) that a district court acted properly in not awarding restitution based on a "loss associated with the charges for which [the defendant] was acquitted." Pedroni, 45 Fed. Appx. at 111 n.13; see Console, 13 F.3d at 674. But Pedroni is an unpublished decision and the dicta in Console, like the Seventh Circuit's decision in Kane, predates the VWPA amendment. Petitioner cites no case in which the Third Circuit has vacated an order requiring restitution for the losses associated with an entire conspiracy or scheme based on the defendant's acquittal in another count.

Finally, petitioner's reliance on the Fifth Circuit's decision in United States v. Adams, 363 F.3d 363 (2004), is misplaced. Like many of the other cases cited by peti tioner, Adams did not involve acquitted conduct. In Ad ams, the Fifth Circuit held only that, "when a defendant pleads guilty to fraud, the scope of the requisite scheme to defraud, for restitution purposes, is defined by the mutual understanding of the parties rather than the strict letter of the charging document." Id. at 364. Nothing in Adams disturbs the Fifth Circuit's prior holding in United States v. Chaney, 964 F.2d 437, 452- 453 (1992), that restitution may be ordered for loss caused by an entire conspiracy, even where the defen dant was acquitted of some of the conduct also alleged to be in furtherance of the conspiracy.7

c. Regardless of any claimed conflict, petitioner is incorrect on the merits. Count 1 charged a broad con spiracy to conceal assets. As stated in a case relied on by petitioner, because proof of the conspiracy is an ele ment of the offense of conviction, "actions pursuant to that [conspiracy] should be considered 'conduct that is the basis of the offense of conviction'" under Hughey. Bennett, 943 F.2d at 740 (quoting Hughey, 495 U.S. at 414). Accordingly, as the court of appeals correctly rea soned, when a restitution order is based on a conspiracy conviction, a court can order restitution for losses re sulting 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." Pet. App. 22a (quoting United States v. Reed, 80 F.3d 1419, 1423 (9th Cir.), cert. denied, 519 U.S. 882 (1996)); see United States v. Hensley, 91 F.3d 274, 277 (1st Cir. 1996) ("Thus, the outer limits of a VWPA § 3663(a)(2) restitu tion order encompass all direct harm from the criminal conduct of the defendant which was within any scheme, conspiracy, or pattern of activity that was an element of any offense of conviction."); Turino, 978 F.2d at 319 ("because the scheme is an element of the offense of mail fraud, a conviction for mail fraud can support a convic tion for a broad scheme even though the defendant is not specifically convicted for each fraudulent act encom passed within this scheme").

Nor would the fact that petitioner had been acquitted on some other count preclude a court, under the plain text of the statute or the reasoning of Hughey, from or dering full restitution for the conspiracy count on which petitioner was convicted. Petitioner's argument, at bot tom, is a challenge alleging "inconsistencies in the jury's verdict." Chaney, 964 F.2d at 452 (rejecting argument that "[r]estitution under the Victim and Witness Protec tion Act is forbidden for losses that may be attributed to conduct that is the basis of charges for which the defen dant is acquitted") (citation omitted). But "an irreconcil able jury verdict does not warrant reversal of a criminal conviction * * * because each count in an indictment is to be considered as a separate indictment." United States v. Walker, 9 F.3d 1245, 1248 (7th Cir. 1993) (cita tions omitted), cert. denied, 511 U.S. 1096 (1994). Like wise, as at least four courts of appeals agree, the validity of a restitution order as to one count of conviction is not undermined by a defendant's acquittal on a separate count, even where the latter charge involves some of the same conduct as the former charge. See United States v. Boyd, 222 F.3d 47, 51 (2d Cir. 2000) ("[T]he VWPA confers authority to order a participant in a conspiracy to pay restitution even on uncharged or acquitted counts."); see also United States v. Foley, 508 F.3d 627, 635-636 (11th Cir. 2007); United States v. Booth, 309 F.3d 566, 575-576 (9th Cir. 2002); Chaney, 964 F.2d at 452. That is particularly true here, where petitioner's acquittal on a substantive charge of concealing her in terest in the Utah condo is not necessarily inconsistent with a charge that she and her co-conspirators con spired to conceal that asset, among others.

d. Petitioner's claim (Pet. 37) that the Ninth Cir cuit's interpretation of the VWPA as authorizing restitu tion based on acquitted conduct violates her Sixth Amendment right to trial by jury merits no further re view. As discussed below (pp. 22-23, infra), all the cir cuits correctly have held that a court may consider ac quitted conduct at sentencing. Furthermore, all nine courts of appeals to have considered the issue have cor rectly rejected the argument that restitution must be determined by a jury. See United States v. Milkiewicz, 470 F.3d 390, 403-404 (1st Cir. 2006) (collecting cases). And this case is not a good vehicle for resolving that issue because, as explained above (p. 15, supra), the res titution order did not depend on a finding that the Utah condo was illegally concealed, and, moreover, the court of appeals did not address the constitutionality of the restitution order.

3. Petitioner contends (Pet. 38-40) that her Sixth Amendment rights were violated because the district court, in determining her sentence of imprisonment, relied in part on conduct underlying Count 4, on which she had been acquitted. The court's loss calculation, however, did not depend on a finding that petitioner ille gally concealed the Utah condo, and therefore this case does not raise the question on which petitioner seeks review. See p. 15, supra. In any event, as the govern ment has explained in briefs in opposition to other peti tions raising the acquitted conduct issue, this Court's review is unwarranted. See, e.g., Gov't Br. in Opp. at 8- 13, Mercado v. United States,128 S. Ct. 1736 (2008); Gov't Br. in Opp. at 7-13, Ashworth v. United States, 128 S. Ct. 1738 (2008).

In United States v. Watts, 519 U.S. 148 (1997) (per curiam), this Court held that "a jury's verdict of acquit tal does not prevent the sentencing court from consider ing conduct underlying the acquitted charge, so long as that conduct has been proved by a preponderance of the evidence." Id. at 157. Although Watts specifically ad dressed a challenge to consideration of acquitted con duct based on double jeopardy principles rather than the Sixth Amendment, the clear import of the Court's deci sion is that sentencing courts may take acquitted con duct into account at sentencing without offending the Constitution. See ibid. That principle predated the Sentencing Guidelines, see id. at 152, and it fully applies to the advisory Guidelines put in place by United States v. Booker, 543 U.S. 220 (2005).

Since Booker, every court of appeals has held that a district court may consider acquitted conduct at sen tencing. See United States v. Jimenez, 513 F.3d 62, 88 (3d Cir.), cert. denied, 07-1291, 2008 WL 1751518 (May 12, 2008); United States v. Ashworth, 247 Fed. Appx. 409, 410 (4th Cir. Sept. 6, 2007), cert. denied, 128 S. Ct. 1738 (2008); United States v. Mendez, 498 F.3d 423, 426- 427 (6th Cir. 2007); United States v. Hurn, 496 F.3d 784, 788 (7th Cir. 2007), cert. denied, 128 S. Ct. 1737 (2008); United States v. Mercado, 474 F.3d 654, 656-658 (9th Cir. 2007), cert. denied, 128 S. Ct. 1736 (2008); United States v. Gobbi, 471 F.3d 302, 314 (1st Cir. 2006); United States v. Farias, 469 F.3d 393, 399 & n.17 (5th Cir. 2006), cert. denied, 127 S. Ct. 1502 (2007); United States v. High Elk, 442 F.3d 622, 626 (8th Cir. 2006); United States v. Dorcely, 454 F.3d 366, 371 (D.C. Cir.), cert. denied, 127 S. Ct. 691 (2006); United States v. Vaughn, 430 F.3d 518, 525-527 (2d Cir. 2005), cert. denied, 547 U.S. 1060 (2006); United States v. Magallanez, 408 F.3d 672, 684-685 (10th Cir.), cert. denied, 546 U.S. 955 (2005); United States v. Duncan, 400 F.3d 1297, 1304- 1305 (11th Cir.), cert. denied, 546 U.S. 940 (2005).8

This Court has recently denied petitions raising the issue. See, e.g., Hurn v. United States, 128 S. Ct. 1737 (2008); Mercado v. United States, 128 S. Ct. 1736 (2008); Ashworth v. United States, 128 S. Ct. 1738 (2008). There is no reason for a different result here.9

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

 

GREGORY G. GARRE
Acting Solicitor General
MATTHEW W. FRIEDRICH
Acting Assistant Attorney
General
SANGITA K. RAO
Attorney

 

 

JUNE 2008

 

1 While the jury was deliberating, petitioner's husband fell to his death from his hotel room. Pet. App. 4a. Petitioner's former attorneys entered into plea agreements with the government. Id. at 5a.

2 The court of appeals reversed in part and remanded, based on its ruling that certain trust deeds should have been reconveyed to peti tioner when the court of appeals vacated the original sentencing order. Pet. App. 27a-29a.

3 Petitioner does not appear to challenge here the court of appeals' application of its rule to the facts of this case. In this Court, petitioner argues only that the questions were "ambiguous," not that they were "fundamentally ambiguous" or that the evidence was insufficient to find that she provided false answers to the questions as she understood them. Pet. 20. In any event, the court of appeals correctly rejected petitioner's challenges on those grounds below (Pet. App. 45a-47a), and such a factbound issue would not merit this Court's review.

4 The VWPA was enacted in 1982 and is currently codified at 18 U.S.C. 3663 & 3664 (2000 & Supp. V 2005). The Mandatory Victims Restitution Act of 1996 (MVRA) was enacted in 1996 and is codified at 18 U.S.C. 3663A. The MVRA addresses mandatory restitution, while the VWPA addresses discretionary restitution. The VWPA applies in this case because the offense conduct took place before 1996. The statutory language at issue in this case is contained in both the VWPA and the MVRA, and therefore cases discussing either statute are per tinent. See United States v. Grice, 319 F.3d 1174, 1177-1178 (9th Cir.), cert. denied, 539 U.S. 950 (2003).

5 See United States v. Frith, 461 F.3d 914, 920-921 (7th Cir. 2006); United States v. Randle, 324 F.3d 550, 556-557 (7th Cir. 2003); United States v. Polichemi, 219 F.3d 698, 706, 714 (7th Cir.), cert. denied, 531 U.S. 993 (2000), and 531 U.S. 1168 (2001).

6 See United States v. George, 403 F.3d 470, 474 (7th Cir.), cert. denied, 546 U.S. 1008 (2005); United States v. Bennett, 943 F.2d 738, 740 (7th Cir. 1991), cert. denied, 504 U.S. 987 (1992).

7 Petitioner also cites United States v. Jeffery, No. 93-6295, 1994 WL 468099, at *9 (10th Cir. Aug. 25, 1994) (unpublished), cert. denied, 513 U.S. 1196 (1995), for the proposition that, in a conspiracy case involving a scheme to defraud, restitution may not be ordered for acts pursuant to the scheme but not specifically charged in the indictment. Jeffery, however, is an unpublished decision that relied on cases from other circuits involving conduct that predated the 1990 VWPA amendment. Id. at *9 n.1. In subsequent published cases, the Tenth Circuit has made clear that the VWPA as amended allows restitution for losses associated with "the broader scheme" alleged in a count of conviction, where the offense involves a scheme, conspiracy, or pattern of criminal activity. United States v. Berger, 251 F.3d 894, 898 n.2 (2001) (citing United States v. Hensley, 91 F.3d 274, 277 (1st Cir. 1996)); see United States v. Gordon, 480 F.3d 1205, 1211 (2007).

8 After the Sixth Circuit in Mendez upheld a district court's consider ation of acquitted conduct at sentencing, it granted rehearing en banc in a separate case raising the same issue. See United States v. White, 503 F.3d 487 (2007) (vacated and rehearing en banc granted by un published order dated November 30, 2007; argued June 4, 2008).

9 Contrary to petitioner's suggestion, there is no need to hold this case pending the Court's decision in Oregon v. Ice, cert. granted, No. 07-901 (Mar. 17, 2008), which raises the separate question whether the Sixth Amendment is violated by the imposition of consecutive sentences based on a fact (other than a prior conviction) that was not found by the jury or admitted by the defendant.