§630 Fines and Assessments
(U.S.S.G. §5E4.2)
9th Circuit upholds fine, finding no evidence of defendant’s inability to pay. (630) Defendant was convicted of obstructing a Department of Transportation hearing after flying his airplane into a mountain. At sentencing, the district court imposed a $5,000 fine, among other penalties. Defendant argued that he was unable to pay the fine. The Ninth Circuit found no clear error because there was no evidence before the district court of defendant’s inability to pay the fine. U.S. v. Kirst, __ F.4th __ (9th Cir. Nov. 22, 2022) No. 20-30193.
8th Circuit reverses child porn assessment where district court misstated defendant’s net worth. (630) Defendant pleaded guilty to receiving child pornography. At sentencing, the district court found that defendant had not carried his burden to show that he was indigent, and therefore assessed a $5,000 assessment under the Justice for Victims of Trafficking Act, 18 U.S.C. § 3014(a). On appeal, the Eighth Circuit reversed, finding that the district court had misstated defendant’s net worth, contrary to the presentence report. U.S. v. Ohlmeier, __ F.4th __ (8th Cir. Feb. 7, 2022) No. 21-1568.
8th Circuit reverses child porn assessment because of ambiguity in court’s order. (630) Defendant was convicted of five counts of producing child pornography. His sentence included a $50,000 assessment under 18 U.S.C. § 2259A. The district court stated that it intended to compensate the victims. However, funds collected under § 2259A go to the Pornography Victims Reserve fund. The Eighth Circuit reversed and remanded because of this ambiguity in the district court’s order. U.S. v. Miller, __ F.4th __ (8th Cir. Jan. 21, 2022) No. 20-3316.
8th Circuit upholds requiring defendant to pay costs of prosecution. (630) At defendant’s sentencing for interfering with commerce by threats, the district court ordered defendant to pay the costs of prosecution, including the costs of grand jury witnesses and the cost of a government witness who did not testify at trial. The Eighth Circuit held that the district court had authority under 28 U.S.C. § 1918(b) to order defendant to pay the costs of prosecution, but ruled that the cost of grand jury witnesses was not attributable to defendant. The court upheld the cost of the witness who did not testify because the witness’s testimony would have been material to establishing the foundation for certain evidence. U.S. v. Adams, __ F.3d __ (8th Cir. Apr. 30, 2021) No. 19-3761.
8th Circuit finds no limit on amount of reimbursement for attorney’s fees. (630) After finding that defendant could pay his court-appointed attorney, the district court ordered him to reimburse the government for half the cost, or $22,000, of the amount of attorney’s fees. Defendant argued that his attorney could only bill $11,500 and therefore the court was limited to ordering that amount of reimbursement. The Eighth Circuit found no limit on how much a district court could order defendant to reimburse the government for a court-appointed attorney. U.S. v. Adams, __ F.3d __ (8th Cir. Apr. 30, 2021) No. 19-3761.
2d Circuit affirms special assessment in child porn case, agreeing that defendant was not indigent. (630) Defendant did not show up for the first day of his child pornography trial. At sentencing, the district court assessed fees for his failure to attend, plus a $5,000 assessment under the Justice for Victims of Trafficking Act. Defendant argued that he was indigent, and therefore these monetary penalties were improper. The Second Circuit rejected the argument, finding that defendant was not indigent because he received pension and social security funds and owned his own home. U.S. v. Clarke, __ F.3d __ (2d Cir. Oct. 29. 2020) No. 18-1569.
7th Circuit finds defendant waived challenge to fine. (630)(850) Defendant was a federal officer who was convicted of embezzling money and who pleaded guilty to a violation of 18 U.S.C. § 654. A year before sentencing, the presentence report recommended a $100,000 fine, which was well over the guidelines range. At sentencing, defense counsel urged the district court to consider a fine rather than prison. The district court imposed a $100,000 fine, finding that defendant could pay it. The Seventh Circuit found that defendant had waived any objection to the fine. U.S. v. Piccardi, __ F.3d __ (7th Cir. Feb. 19, 2020) No. 19-1043.
7th Circuit upholds fine in drug case. (630) Prior to defendant’s sentencing for drug trafficking, the presentence report stated that defendant had $190,000 in assets but did not appear able to pay a fine. At sentencing, the district court imposed a $20,000 fine because of the seriousness of defendant’s offense, the need to deprive defendant of his ill-gotten gains, and the need to deter others. The Seventh Circuit rejected defendant’s argument that the district court had not justified the fine and found that the district court had sufficiently considered the factors set forth in § 5E1.2. U.S. v. Lee, __ F.3d __ (7th Cir. Feb. 18, 2020) No. 19-1300.
3d Circuit says trafficking assessment applies per count of conviction. (630) The Justice for Victims of Trafficking Act, 18 U.S.C. § 3014, requires an assessment on every person convicted of certain crimes involving human trafficking and child exploitation. The Third Circuit held that the assessment should be levied for every count of conviction, not just once on a defendant convicted of multiple counts. Accordingly, a defendant convicted of three eligible counts should receive three assessments. U.S. v. Johnman, __ F.3d __ (3d Cir. Jan. 28, 2020) No. 18-2048.
6th Circuit upholds $500,000 fine in oxycodone case as not plain error. (630) Defendant was a physician convicted of writing prescriptions for controlled substances that were not medically necessary. At sentencing, the district court imposed a fine of $500,000 without discussing any of the factors set forth in 18 U.S.C. §§ 3571 & 3572 or providing any other explanation. Reviewing for plain error, the Sixth Circuit found defendant’s fine was statutorily authorized and well within defendant’s resources. U.S. v. Godofsky, __ F.3d __ (6th Cir. Nov. 26, 2019) No. 18-5450.
6th Circuit upholds assessment under Justice for Victims of Trafficking Act. (215)(630) At defendant’s sentencing for abusive sexual contact, the district court imposed a $5,000 special assessment under the Justice for Victims of Trafficking Act, 18 U.S.C. § 3014(a)(2). The JVTA requires a $5,000 assessment against a non-indigent defendant convicted of sexual abuse. A defendant has 20 years to pay the assessment. Defendant argued that he was indigent at the time of sentencing. Defendant pointed to his eligibility for court-appointed counsel, the fact that the district court found that he was unable to pay a fine, and his $30,000 in outstanding medical bills. The Sixth Circuit held that even if defendant was impoverished at sentencing, he had not demonstrated that he would not be able to pay the assessment over a 20-year period. U.S. v. Wandahsega, __ F.3d __ (6th Cir May 21, 2019) No. 18-1187.
6th Circuit defines indigence under Justice for Victims of Trafficking Act. (630) Under 18 U.S.C. § 3014, the district court must impose a $5,000 assessment on non-indigent persons convicted of crimes involving the sexual exploitation of children. At defendant’s sentencing for possession of child pornography, the district court ordered defendant to pay the $5,000 assessment as well as $25,000 in restitution to his victims. The Sixth Circuit found that the determination of indigence under § 3014 must look to a defendant’s current ability to pay as well as a defendant’s future earnings capacity. Under this standard, the court properly found defendant was not indigent. U.S. v. Shepherd, __ F.3d __ (6th Cir. May 1, 2019) No. 18-3993.
5th Circuit affirms $5,000 special assessment for child sex victims based on defendant’s future earnings. (630) Defendant pleaded guilty to possessing child pornography. Under the Justice for Victims of Trafficking Act, 18 U.S.C. §§ 3013(a)(2)(A), 3014(a)(3), an assessment of $5,000 must be imposed on a non-indigent person who commits, among other things, an offense relating to sexually exploiting children. In this case, the district court imposed the assessment even though the presentence report found that defendant had no substantial assets, The Fifth Circuit affirmed, holding that in imposing a special assessment under this statute, the court may consider a defendant’s future earning capacity and is not limited to defendant’s financial condition at the time of sentencing. U.S. v. Graves, __ F.3d __ (5th Cir. Nov. 8, 2018) No. 17-11276.
7th Circuit finds plea agreement waived challenge to special assessment. (630)(790) Defendant pleaded guilty to possessing child pornography. In the plea agreement, defendant waived his right to appeal “the sentence imposed.” The district court sentenced defendant to pay a special assessment of $5,000 under the Justice for Victims of Trafficking Act, 18 U.S.C. §§ 3013, 3014. On appeal, the Seventh Circuit rejected defendant’s challenge to the special assessment, holding that the plea agreement’s waiver of appeal also waived the right to challenge the special assessment. U.S. v. Bolin, __ F.3d __ (7th Cir. Nov. 7, 2018) No. 18-2208.
2nd Circuit refuses to interpret “through 2015” to only mean prior to November 1, 2015. (630) Defendant pled guilty to tax evasion and corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws. His sentence included a $10 million fine. He argued for the first time on appeal that district court overlooked § 5E1.2(h) in calculating his recommended sentencing range, which had the effect of doubling the recommended fine. That provision states that an earlier version of the guidelines should be applied “[f]or offenses committed prior to November 1, 2015.” Count One of defendant’s indictment alleged that offense occurred “[f]rom in or about 2007 through in or about 2015,” however, and defendant averred during his plea allocution that the conduct underlying Count One took place “from 2007 through 2015.” The Second Circuit refused to interpret “through 2015” to mean only prior to November 1, 2015. Moreover, defendant’s plea agreement expressly recognized the applicability of the guidelines range of which he now complains. There was no error, much less a plain error. U.S. v. Zukerman, __ F.3d __ (2d Cir. July 27, 2018) No. 17-948.
2nd Circuit permits reliance on financial information that defendant provided to impose $10 million fine. (630) Defendant pled guilty to tax evasion and corruptly endeavoring to obstruct and impede the administration of the internal revenue laws. His sentence included a $10 million fine. The Second Circuit rejected defendant’s argument that inadequate consideration was given to his ability to pay. Defendant submitted an affidavit regarding his financial condition as of August 2, 2016, when his net-worth was in the eight-figure range. He contended that the affidavit was outdated by time he was sentenced in March 2017, but he declined to provide updated information after receiving a revised PSR in November 2016, which incorporated financial information from his August 2016 affidavit. His failure to do so continued even after the government expressly asserted that he could “pay a substantial fine and should be ordered to do so” in February 2017. At sentencing, defendant never objected that he could not afford to pay the fine imposed, nor that his financial condition had materially changed since August 2016. Accordingly, it was not plain error for the district court to rely on the information that defendant himself had provided. U.S. v. Zukerman, __ F.3d __ (2d Cir. July 27, 2018) No. 17-948.
2nd Circuit upholds $10 million fine for extensive tax fraud. (630) Defendant pled guilty to tax evasion and corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws. Although guideline fine range was $25,000 to $250,000, the Second Circuit held that the $10 million fine imposed by the district court was not substantively unreasonable. The district court gave a detailed explanation of all of its considerations. It concluded that defendant, a very wealthy man who had repeatedly and brazenly committed sophisticated tax fraud ought to pay a fine hefty enough to take any financial benefit out of his crimes and to give pause to others who might be tempted to commit similar crimes. The district court further concluded that the guidelines range did not encompass a fine necessary to accomplish those ends. Instead, the district court calculated the size of the fine based, in part, on an estimate of the tax loss defendant caused ($45 million) less the amount of restitution he had agreed to pay. Defendant’s fine thus “resulted from the reasoned exercise of discretion.” U.S. v. Zukerman, __ F.3d __ (2d Cir. July 27, 2018) No. 17-948.
8th Circuit says court sufficiently explained fine despite defendant’s possible inability to pay. (630) One of defendant’s employee’s fell to his death while working at a construction site. The employee was not using fall-protection equipment when he fell. Defendant DNRB, was convicted of a Class B misdemeanor for willfully violating two safety regulations and causing the employee’s death. See 29 U.S.C. § 666(e); 29 C.F.R. § 1926.760(a)(l) & (b)(l). DNRB had ceased operations, and the PSR indicated that it would be unable to pay a fine. Nonetheless, the district court fined DNRB the statutory maximum of $500,000. See 18 U.S.C. § 3571(c)(4). Because defendant was convicted of a Class B misdemeanor, the sentencing guidelines did not apply. Therefore, the appellate court would uphold the sentence if it was within the statutory range and not “plainly unreasonable.” See 18 U.S.C. § 3742(a)(4). The Eighth Circuit upheld the fine, finding that the court explained how its sentence comported with the PSR’s inability-to-pay conclusion. The district court acknowledged that the company had “closed up shop” but imposed the fine anyway, “hoping they have some more corporate formalities left to pay” in light of the large sums DNRB allegedly had paid its attorneys. This was not plainly unreasonable. U.S. v. DNRB, Inc, __ F.3d __ (8th Cir. July 17, 2018) No. 17-3148.
10th Circuit upholds fine that would require defendant to sell or mortgage her house. (630) Defendant was convicted of federal drug charges. Her only source of income were her monthly disability payments, but she and her husband owned a house without a mortgage. Relying on defendant’s co-ownership of the house, the court imposed a fine of $13,133.33, reasoning that defendant could pay this amount by selling the house or obtaining a loan with the house as collateral. On rehearing, the Tenth Circuit upheld the fine, rejecting arguments that: (1) defendant could not sell the house; (2) defendant could not obtain a loan with the house as collateral; (3) the court should have considered the hardship to defendant; (4) the court erred by relying on the fact that (a) family members living with defendant knew of her crimes and could have prevented them, and (b) the house had been used to facilitate the crimes; and (5) the court failed to account for the increased risk of recidivism posed by the fine. U.S. v. Basurto, 834 F.3d 1109 (10th Cir. 2016), superseding U.S. v. Basurto, __ F.3d __ (10th Cir. July 12, 2016) 15-2119.
6th Circuit upholds separate $100 special assessments and concurrent sentences for each obstruction count. (630) Defendant acted as a high-level “fence,” selling over-the-counter medication and baby formula stolen from retail stores and pharmacies. He was convicted of multiple offenses including two counts of aiding and abetting the obstruction of justice. He argued that the district court erred in imposing separate $100 special assessments for each of his obstruction-of-justice convictions. The Sixth Circuit disagreed, ruling defendant had not shown error, let alone plain error. Defendant relied on U.S. v. Kimbrough, 69 F.3d 723 (5th Cir. 1995) which held that the government had impermissibly divided a single child pornography offense into two counts. Here, defendant’s two obstruction convictions were based on distinct criminal acts: concealing or altering paper ledgers, and concealing or altering a video recorder hard drive. Therefore, there was no error in imposing concurrent sentences and separate special assessments. U.S. v. Danhach, __ F.3d __ (5th Cir. Mar. 9, 2015) No. 14-20339.
11th Circuit reverses where court treated misdemeanors as felonies for special assessment purposes. (630) A jury convicted defendant of 33 crimes, stemming from his improper receipt of federal worker’s compensation. The district court imposed a $3,300 special assessment, which it calculated by multiplying $100 times the number of counts of conviction (33). Imposition of a special assessment was mandatory, but the amount depended on whether the conviction was for a felony or a misdemeanor and, if a misdemeanor, what class. See 18 U.S.C. §3013(a)(2)(A) (special assessment of $100 for a felony conviction); §3013(a)(1)(A)(iii) (special assessment of $25 for a Class A misdemeanor conviction). The Eleventh Circuit ruled that the court miscalculated by treating defendant’s eight misdemeanors as felonies. Defendant was convicted of 25 felony offenses, for which special assessments totaling $2,500 (25 x $100) should have been imposed, and he was convicted of eight Class A misdemeanor offenses, for which assessments totaling $200 (8 x $25) should have been imposed. Adding his felony and Class A misdemeanor assessments, the correct amount of the special assessment was $2,700. U.S. v. Slaton, __ F.3d __ (11th Cir. Sept. 14, 2015) No. 14-12366.
Commission adjusts loss and fine tables for inflation. ((218)(370)(630)(840) Recognizing the effects of inflation, the Commission amended the Guidelines’ seven monetary tables to increase the amounts using a specific multiplier derived from the Consumer Price Index (CPI). For example, the loss amount necessary for a two-level increase under §2B1.1 is increased from “more than $5,000” to “more than $6,500.” The effect is to reduce sentences for a given loss amount. On the other hand, for fines, the effect is to increase the amount of the fine for a given offense level. To avoid ex post facto issues for fines, the Commission added a special instruction to both §§5E1.2 and 8C2.4 requiring use of the 2014 guidelines for offenses committed prior to November 1, 2015. Amendment 791, effective November 1, 2015.
8th Circuit reverses “financial obligation” as improper restitution rather than fine. (610)(630) Defendant pled guilty to killing a bald eagle and a rough-legged hawk. As part of his sentence, the district court imposed a $6500 “financial obligation.” It was undisputed that the district court had authority to issue a fine; however, the court did not have the authority to order restitution for defendant’s offenses. See 18 U.S.C. §§ 3663 and 3663A. The Eighth Circuit concluded that the “financial obligation,” while characterized as a fine in the court’s written judgment, was really intended as restitution, and thus the court lacked authority to impose it. A close examination of the sentencing transcript showed that the court intended to order restitution, not a fine. For instance, the government specifically requested during the hearing that the court impose “some restitution in this case.” Shortly thereafter, when the court announced defendant’s sentence, the court specified that the “financial obligation” was “[i]n lieu of a fine.” And, although the court later referred to the financial obligation in passing as a “fine,” the court further characterized the financial obligation as an “assessment for the loss of the eagle and the hawk.” U.S. v. Bertucci, __ F.3d __ (8th Cir. July 23, 2015) No. 14-3570.
8th Circuit approves fine despite court’s failure to address defendant’s ability to pay. (630) Defendant’s sentence included a $20,000 fine, which was near the bottom of the recommended guideline range. He challenged the fine for the first time on appeal, arguing that he did not, and would not, have the ability to pay the fine. He also argued that the district court did not address his ability to pay the fine or otherwise discuss the applicable factors in 18 U.S.C. §3572(a), guideline §5E1.2, or note 3 to §5E1.2. The Eighth Circuit found no plain error. First, although defendant’s status as a convicted felon and sex offender would impede his ability to earn, he possessed training and skills that had allowed him to secure meaningful employment in the past. Second, the court demonstrated familiarity with the record and noted defendant’s lack of assets and limited ability to earn while incarcerated. Third, the court supplied payment requirements for the terms of incarceration and supervised release. And fourth, the court explained the role of the fine as a part of the overall sentence, a sentence which included a substantial downward variance. Even if the court’s relatively short discussion of the factors supporting the fine amounted to clear or obvious error, the error was not plain. U.S. v. Harper, __ F.3d __ (8th Cir. May 29, 2015) No. 14-1908.
Commission adjusts loss and fine tables for inflation. (218)(370)(630)(840) Recognizing the effects of inflation, the Commission amended the Guidelines’ seven monetary tables to increase the amounts using a specific multiplier derived from the Consumer Price Index (CPI). For example, the loss amount necessary for a two-level increase under §2B1.1 is increased from “more than $5,000” to “more than $6,500.” The effect is to reduce sentences for a given loss amount. On the other hand, for fines, the effect is to increase the amount of the fine for a given offense level. To avoid ex post facto issues for fines, the Commission added a special instruction to both §§5E1.2 and 8C2.4 requiring use of the 2014 guidelines for offenses committed prior to November 1, 2015. Proposed amendment 2, effective November 1, 2015.
5th Circuit holds that court did not encroach on BOP’s authority by setting monthly payment schedules for fines. (630) In two separate cases, the district court imposed a fine, with a monthly payment schedule set at one-third of the defendant’s prison earnings, conditional on the prisoner being allowed to work while in prison. Defendants argued that in setting a monthly payment schedule for the fines, the district court impermissibly encroached on the authority of the Bureau of Prisons (BOP). The 5th Circuit disagreed. Under 18 U.S.C. §3572 district courts have the authority to “determin[e] whether to impose a fine, and the amount, time for payment, and method of payment of a fine.” District courts are also authorized to set a schedule for payment. The district court’s orders did not function as an improper “garnishment” of defendants’ prison wages. The payment schedule was conditioned upon those wages materializing in fact. The payment condition did not interfere with the Inmate Financial Responsibility Program (IFRP) procedures. IFRP regulations expressly countenance deviations from “ordinary” processes when called for to meet an inmate’s specific obligations. U.S. v. Pacheco-Alvarado, __ F.3d __ (5th Cir. Mar. 30, 2015) No. 13-41083.
5th Circuit approves fine based on potential prison earnings and earning potential after release. (630) Defendant’s PSRs stated that it “did not appear the defendant has the ability to pay a fine.” Nonetheless, the Fifth Circuit held that the district court did not err procedurally in imposing a $5,000 fine on defendant. The district court expressly recognized defendant’s present inability to pay. The court conditioned payment on defendant’s ability to work while in prison and on his earning potential after release. By making this clear, the district court complied with all procedural requirements. The fine was substantively reasonable. The fine fell within the recommended guidelines range, and therefore was entitled to a presumption of reasonableness. A sentencing court may base a conclusion about a defendant’s future ability to pay a fine on prospective prison wages. While it was likely that defendant would not be permitted to remain in the U.S. after his prison term was over, defendant did not overcome the overcome the presumption of reasonableness by demonstrating his inability to pay. U.S. v. Pacheco-Alvarado, __ F.3d __ (5th Cir. Mar. 30, 2015) No. 13-41083.
Supreme Court holds that Apprendi applies to fines. (630) Defendant, a corporation, was convicted of environmental crimes. The statute under which defendant was convicted allows imposition of a fine of not more than $50,000 for each day that the offense occurs. The Probation Office determined that defendant committed the offense for 762 days and therefore was liable for a fine of more than $38 million. Defendant objected that the jury’s verdict allowed the court to impose a fine for only one day. The district court found that defendant had violated the statute for 762 days and imposed a fine of $6 million. The Supreme Court, in a decision by Justice Sotomayor, held that its decision in Apprendi v. New Jersey, 530 U.S. 466 (2000), applied to fines and that the district court had violated Apprendi by finding that defendant committed the offense on 762 days and was liable to a fine of $38 million. Justice Breyer, joined by Justice Kennedy and Alito, dissented. Southern Union Co. v. U.S., 567 U.S. __, 132 S.Ct. 2344 (2012).
Supreme Court to consider application of Apprendi to criminal fines. (630) Defendant was convicted under 42 U.S.C. § 6928(d), which authorizes “a fine of not more than $50,000 for each day of violation.” The Supreme Court granted certiorari to decide whether the Sixth Amendment, as interpreted in Apprendi v. New Jersey, 530 U.S. 466 (2000), required that the jury rather than the district court determine the number of “day[s] of violation” before the court could impose a fine greater than $50,000 pursuant to Section 6928(d). Southern Union Co. v. U.S., __ U.S. __, 132 S.Ct. 756 (2011) (granting certiorari).
Supreme Court holds forfeiture of entire amount of unreported cash violates Excessive Fines Clause. (630) Defendant was convicted of attempting to leave the United States without reporting $357,144 in cash. There was no proof that the money was connected to any crime. In a 5-4 decision, the Supreme Court held that criminal forfeiture of the entire $357,144 under 18 U.S.C. § 982(a)(1) violated the Excessive Fines Clause because the amount of a forfeiture cannot be “grossly disproportional to the gravity of the defendant’s offense,” and defendant’s only crime was a failure to report the otherwise legal possession of money. Emphasizing that § 982(a)(1) is a criminal forfeiture statute plainly punitive in character, the Court found this forfeiture was a “fine” within the meaning of the Clause. The Court held that the cash was not an “instrumentality” of the crime of failure to report, and thus its forfeiture was not akin to civil forfeitures of “guilty property.” The Court identified two factors as “particularly relevant” to the excessiveness inquiry: (1) judicial deference to legislative judgments about the appropriate punishment for an offense; and (2) the standard of gross disproportionality articulated in the Court’s Cruel and Unusual Punishment Clause precedents. District court determinations of constitutional excessiveness will be reviewed de novo. Justices Kennedy, Rehnquist, O’Connor, and Scalia filed a vigorous dissent. [Ed. Note: Whatever the merits of its result, the reasoning of the majority will certainly engender profound confusion in the lower courts. As but one example, the Court relies heavily on the fact that this case is a “punitive” in personam criminal forfeiture, strongly implying that civil in rem forfeitures, which it characterizes as “nonpunitive,” are not subject to the same excessiveness analysis. The Court then suggests that a “modern,” as opposed to “traditional,” civil in rem forfeiture may be subject to excessiveness analysis if it “constitutes punishment even in part, regardless of whether the proceeding is styled in rem or in personam.” Taken as a whole, the opinion can fairly be read either to include or exclude all civil forfeitures from the ambit of the Eighth Amendment.] U.S. v. Bajakajian, 524 U.S. 321, 118 S.Ct. 2028 (1998).
Supreme Court upholds constitutionality of special assessments for victims’ fund. (630) In a unanimous opinion written by Justice Marshall, the Supreme Court reversed the 9th Circuit and upheld the constitutionality of 18 U.S.C. § 3013 which requires courts to impose a “special assessment” of $25 for each misdemeanor and $50 for each felony conviction. The court held that the fact that the money goes into a special victims’ fund did not make the statute a “bill for raising revenue” which must originate in the House of Representatives. See U.S. Constitution, Article 1, § 7, clause 1. This ruling brings the 9th Circuit into conformance with six other circuits which had upheld the special assessments. In deciding the case, the court rejected the government’s argument that the “origination clause” issue raised a political question and was not justiciable. U.S. v. Munoz-Flores, 495 U.S. 385, 110 S.Ct. 1964 (1990).
Supreme Court holds excessive fines clause of Eighth Amendment does not apply to punitive damage awards. (630) Justice Blackmun, writing for a 7-2 majority of the Supreme Court, held that the excessive fines clause of the Eighth Amendment does not apply to punitive damage awards in cases between private parties. The clause was intended to limit only fines directly imposed by, and payable to, the government. Justices O’Connor and Stevens in partial dissent complained that punitive damage awards have a “detrimental effect on the development of new products,” and “present precisely the evil of exorbitant monetary penalties that the Clause was designed to prevent.” Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 109 S.Ct. 2909 (1989).
1st Circuit upholds fine even though PSR recommended against one. (630) Defendant challenged the imposition of a $12,500 fine since the PSR recommended against a fine and the government failed to object to this recommendation. The First Circuit nonetheless affirmed the fine. In recommending against a fine, the PSR made the erroneous assumption that, after forfeiture of his residence, defendant would have no assets left with which to pay a fine. In fact, his known assets after forfeiture totaled over $50,000. The fine at the bottom of the guideline range was well within judicial discretion, and defendant did not argue that he was unable to pay the amount. U.S. v. Keene, 341 F.3d 78 (1st Cir. 2003).
1st Circuit upholds $1,000,000 fine. (630) Defendant attacked the assessment of a $1,000,000 fine, arguing that the court failed to consider the criteria set forth in U.S.S.G. § 5E1.2(d) and 18 U.S.C. § 3572(a). The First Circuit was satisfied that the record adequately supported the district court’s ruling. The PSR contained sufficient information for the district court to consider defendant’s ability to pay, likely impact on his dependents, and the expected costs of imprisonment and supervision. Moreover, according to the PSR, the marijuana defendant distributed in 1991 alone yielded about $62 million in revenue, which the probation officer stated was a conservative estimate. Given defendant’s failure to present evidence that he was subject to extensive seizures or that he had no access to possible hidden drug proceeds, the district court could reasonably conclude that this money went somewhere and that defendant would have access to it upon his release. U.S. v. Lujan, 324 F.3d 27 (1st Cir. 2003), habeas corpus granted in part by Lujan v. U.S., 2004 WL 2044302 (D.N.H. Sep. 14. 2004) No. CIV 04-247-SM.
1st Circuit holds that assessment of $20,000 fine was not plain error. (630) Defendant argued for the first time on appeal that his indigent status at the time of sentencing barred the district court from imposing a $20,000 fine. However, USSG § 5E1.2(a) requires a district court to “impose a fine in all cases, except where the defendant establishes that he is unable to pay and he is unlikely to become able to pay any fine.” Defendant bears the burden of proving both a current and future inability to pay the fine. The district court found that defendant failed to meet that burden, noting that he had the intelligence and skills to work and earn the funds necessary to pay the fine upon his release. The First Circuit found no plain error in that ruling. U.S. v. Manjarrez, 306 F.3d 1175 (1st Cir. 2002).
1st Circuit says court had authority at resentencing to impose fine not previously imposed. (630) Defendant was originally was sentenced to 33 months in prison. Neither restitution nor a fine was imposed. On his first appeal, one count of conviction was reversed. At resentencing, defendant was sentenced to 18 months in prison, 24 months’ supervised release, and a fine of $10,000. Defendant appealed on a number of sentencing grounds, including a claim that the fine was vindictive. The appellate court agreed on some of the sentencing issues. The court did not address the fine, noting that defendant would have to be resentenced, and urged the district court to consider defendant’s arguments about the fine at that time. At resentencing, the district court sentenced defendant to five years of probation and a fine of $10,000. Defendant did not object to any part of the sentence. On his third appeal, the First Circuit held that the $10,000 fine was not plain error. A presumption exists that a fine will be imposed as part of a sentence, and the defendant bears the burden of showing that an exception should be made in his case. The court here considered defendant’s financial condition, and in fact waived interest on the fine because of his financial condition. The first judge’s failure to impose a fine as part of defendant’s sentence was not tantamount to a finding of indigence. At the second sentencing, the judge stated that the record did not show that defendant was incapable of paying a fine. The second judge did not err in imposing a fine, despite the first judge’s initial decision not to do so. U.S. v. Rowe, 268 F.3d 34 (1st Cir. 2001).
1st Circuit affirms where defendant failed to prove he could not pay fine. (630) The district court levied a $25,000 fine. Defendant claimed that the court failed to fulfill its duty under Rule 32(c)(3)(D) to settle dispute surrounding all facts relevant to his ability to pay the fine. In his sentencing memorandum, defendant had challenged the PSR’s finding that, despite extensive seizures by the government, he had the ability to pay a fine from either remaining assets or possible hidden drug proceeds. The First Circuit found no error, since defendant offered no affirmative evidence to prove that he could not pay the fine. A defendant bears the burden of proving that his case warrants an exception to the rule that a fine be imposed. Where a defendant failed to rebut factual assertions in a PSR, the district court is justified in relying on those assertions. The district court referred to the PSR’s findings regarding defendant’s financial condition at sentencing, and expressly adopted those findings in issuing the judgment. U.S. v. Torres-Otero, 232 F.3d 24 (1st Cir. 2000).
1st Circuit holds that court adequately considered statutory factors in imposing fine. (630) Defendant argued that in imposing a fine, the sentencing court failed to consider the factors required by 18 U.S.C. § 3572(a). In scrutinizing this claim, the First Circuit used a presumption of correctness — a presumption that, as long as the sentencing court was presented with adequate record evidence, it will be deemed to have considered the statutory criteria. The relevant section of the PSR, which the PSR explicitly adopted, contained all the necessary information concerning defendant’s financial condition, the likely impact of a fine on his family, and the details of the restitution that he already had made. In addition, defense counsel provided the court with abundant information concerning factors adversely affecting defendant’s ability to pay. The court opted to set defendant’s fine near the low end of his guideline range. Taking all of this into account, there was no serious question that the district court adequately complied with § 3572(a). U.S. v. Saxena, 229 F.3d 1 (1st Cir. 2000).
1st Circuit upholds large fines where defendants could not account for substantial robbery proceeds. (630) In additional to prison sentences, the district court imposed a $250,000 fine on each of five defendants convicted of a string of bank and armored car robberies. Defendants reported no appreciable assets, and contended that they lacked the ability to pay a fine. The district judge was not persuaded, pointing out that substantial robbery proceeds had not been accounted for and that defendants might also earn significant sums through interviews and the sale of literary rights. Given that defendants had stolen more than the amount of their fines and failed to account for a substantial portion of the money, the First Circuit upheld the fines. The fact that defendants denied having any money created at best a credibility contest. The district court was free to disbelieve defendants’ claims. U.S. v. Shea, 211 F.3d 658 (1st Cir. 2000).
1st Circuit holds that judge considered defendant’s ability to pay $4,000 fine. (630) Defendant pled guilty to firearms charges. The First Circuit affirmed a $4000 fine since the record showed that the judge considered whether defendant should be fined and concluded that he had the ability to pay the fine. The judge heard testimony that defendant was to receive about $20,000 in accrued disability benefits, rejected the government’s recommendation of a $15,000 fine, and stated that defendant could pay a fine in the low end of the scale. The sentence in the statement of reasons that the fine was waived because of “inability to pay” was “patently a clerical error.” Although combining the $4,000 fine with the $3,000 in counsel fees that defendant was also required to repay represented a considerable portion of his $20,000 net worth, defendant did not show the fine was improper. However, the district court improperly delegated to the probation officer the authority to make an installment schedule for payments. Although defendant did not raise this claim below, the claim was not waived because defendant did not learn of the condition until after the final judgment had been entered. U.S. v. Merric, 166 F.3d 406 (1st Cir. 1999).
1st Circuit finds self-reported financial disclosure statements did not prove inability to pay fine. (630) Husband and wife defendants were convicted of laundering drug money. They filed a joint motion to waive fines, based upon the self-reported financial disclosure statements they provided to the probation department. However, the government produced a summary of defendants’ personal income tax returns which indicated that defendants’ interest income had been $116,000 in 1988 and $98,000 in 1989. Those were the years just prior to the scheme’s collapse. Trial evidence showed that defendants had lent money to friends and business acquaintances over the years, with principal amounts outstanding in excess of $1 million. Also, they had significant land holdings above and beyond the land the government sought to forfeit. The First Circuit held that defendants’ self-reported financial disclosure statements did not rebut the government’s compelling evidence that they had sufficient resources to pay a fine. They did not establish an inability to pay. U.S. v. Cunan, 152 F.3d 29 (1st Cir. 1998).
1st Circuit rejects fine but upholds $500,000 restitution order for indigent defendant. (630) Defendant argued that because he was indigent, the district court erroneously imposed a cost of supervised release fine and a $500,000 restitution order. The 1st Circuit struck down the costs of supervised release, but upheld up the restitution order. U.S. v. Corral, 964 F.2d 83 (1st Cir. 1992) holds that the costs of supervised release may not be imposed on a defendant found to be indigent for purposes of a punitive fine. However, this ban does not apply to restitution orders. Restitution is imposed under a separate statutory scheme with its own independent considerations of defendant’s ability to pay. Here, the judge properly considered the statutory factors, and concluded that although defendant might not have a present ability to pay, he had the prospect of receiving or inheriting assets in the future, and the ability to obtain gainful employment. U.S. v. Brandon, 17 F.3d 409 (1st Cir. 1994).
1st Circuit finds court adequately considered defendant’s ability to pay $60,000 fine. (630) The 1st Circuit held that the district court properly considered defendant’s financial resources before imposing a $60,000 fine. From the record, the court could fairly conclude that not long before, defendant had been in possession of ample funds to pay such a fine, and that the funds’ sudden absence was not adequately explained. U.S. v. Lombardi, 5 F.3d 568 (1st Cir. 1993), superseded on other grounds by statute as stated in U.S. v. Martin, 363 F.3d 25 (1st Cir. 2004).
1st Circuit upholds $10,000 fine for loan shark. (630) Defendant was convicted of making extortionate extensions of credit. The First Circuit upheld a $10,000 fine, finding the district court properly considered defendant’s financial resources and earning ability. The PSR, adopted by the district court, detailed defendant’s assets, liabilities and monthly cash flow. The court waived interest on the fine after determining he could not pay it and chose a fine at the lower end of the $5,000‑$50,000 range. Although defendant’s net worth and cash flow were negative, this did not mean he could not pay a fine. Defendant did not offer any evidence establishing an inability to pay a fine. All of his debt was owed to family members who funded his defense costs. U.S. v. Peppe, 80 F.3d 19 (1st Cir. 1996).
1st Circuit upholds fine below guideline minimum where defendants did not show inability to pay it. (630) Defendants each challenged a $5,000 fine. The First Circuit affirmed since defendants did not show an inability to pay a fine. A district court must impose a fine unless the defendant establishes that he is unable to pay and is not likely to become able to pay a fine. The minimum statutory fine was $10,000 for one defendant and $12,000 for the other. Although their PSRs indicated they had no apparent source of funds, the report did not recommend no fine. Both defendants were healthy with no disabilities. They did not object to their fines at sentencing, and even now made no attempt to show an incapacity to earn money. U.S. v. Rivera, 68 F.3d 5 (1st Cir. 1995).
1st Circuit upholds fine designed to fill gap between value of forfeited assets and plea agreement amount. (630) In a plea agreement, defendant agreed to forfeit property with a total value of $2.8 million. In a separate agreement, he listed several assets to forfeit, including some condominiums owned by a corporation in which he had a 50 percent interest. The district court imposed a $634,000 fine, making it clear that its objective was to fill the gap between the value of the assets forfeited and $2.8 million plea agreement ceiling. The 1st Circuit affirmed, despite defendant’s dispute as to the valuation of certain forfeited assets and the government’s refusal to accept the listed condominiums for forfeiture. The court was not legally required to limit its fine to the size of the gap, and thus was not required to measure the gap precisely. The agreement provided that assets would satisfy the forfeiture obligation only if the assets were without any encumbrances. Defendant’s associate had filed a petition objecting to the forfeiture of the condos, claiming a 50 percent interest in them. The district court could properly construe this petition as an encumbrance. U.S. v. Maling, 988 F.2d 242 (1st Cir. 1993).
1st Circuit upholds fine where defendant presented no evidence of his inability to pay it. (630) The 1st Circuit affirmed that the district court followed statutory requirements in imposing a fine on defendant. Section 5E1.2(a) provides that the court shall impose a fine except where the defendant establishes that he is unable to pay and is unlikely to become able to pay any fine. Thus, a fine is the rule and it is the defendant’s burden to demonstrate that his case is an exception. Since defendant presented no “significant evidence” of his inability to pay, there was no basis for setting aside the fine, which was at the bottom of his guideline range. The court’s failure to make express findings in open court concerning defendant’s financial condition and prospects did not necessitate reversal. U.S. v. Savoie, 985 F.2d 612 (1st Cir. 1993).
1st Circuit vacates costs of supervised release fine for indigent defendant. (630) The trial court did not declare defendant indigent, but declined to impose a punitive fine on defendant due to his inability to pay. However, the court did impose a fine to pay for the costs of supervised release. The 1st Circuit vacated the fine in light of the trial court’s determination that defendant could not afford to pay a punitive fine. The costs of supervised release constitute an additional fine under section 5E1.2(a) which cannot be imposed where defendant has been found exempt from a punitive fine because of an inability to pay it. U.S. v. Pineda, 981 F.2d 569 (1st Cir. 1992).
1st Circuit holds that indigent defendant may not receive an additional fine to meet the costs of supervised release. (630) Following the 10th Circuit’s decision in U.S. v. Labat, 915 F.2d 603 (10th Cir. 1990), the 1st Circuit held that a district court may not impose a fine under section 5E1.2(i) to pay for the costs of incarceration or supervised release if the defendant is indigent for purposes of a punitive fine under section 5E1.2(a). If a defendant cannot pay a punitive fine, there is no basis for expecting that he will be able to pay for the expense of supervised release. Imposition of such a sanction would be meaningless and result in unnecessary recordkeeping. U.S. v. Corral, 964 F.2d 83 (1st Cir. 1992).
1st Circuit rules it lacks jurisdiction to review fine within guideline range. (630) In defendant’s first appeal, the 1st Circuit remanded because the district court improperly imposed a four level leadership enhancement. On remand, the district court reduced defendant’s offense level accordingly, and imposed a reduced term of imprisonment and the same $150,000 fine as before. On defendant’s second appeal, he claimed that the fine was excessive in light of the fact that he was not found to have a leadership role in the offense. The 1st Circuit held that because the fine was within the appropriate guideline range, it had no jurisdiction to review the appropriateness of the fine. U.S. v. McDowell, 957 F.2d 36 (1st Cir. 1992).
1st Circuit upholds $200,000 fine for corporate defendant against constitutional and statutory challenges. (630) Defendant corporation was convicted of eight counts of selling adulterated meat and poultry, and received a $200,000 fine, $25,000 for each count. The 1st Circuit upheld the fine against the corporation’s claim that the fine violated the 8th Amendment’s prohibition against excessive fines. Assuming the prohibition is applicable to a corporation (which the court noted was a tenuous assumption), the fine was not excessive. The fine was less than one-half of the $500,000 statutory maximum. Moreover, the court did not think a $200,000 fine for repeatedly selling rotten poultry and meat products to the public was excessive, and would also serve as a significant deterrent to future violators. The fine also complied with 18 U.S.C. section 3571. The district court was “fully cognizant” of the corporation’s financial condition, and refused to impose the $500,000 fine after defense counsel asserted that such a fine would put the corporation out of business. U.S. v. Pilgrim Market Corporation, 944 F.2d 14 (1st Cir. 1991).
1st Circuit holds plea agreement imposed ceiling on aggregate amount of forfeiture plus fines. (630) Defendants’ plea agreement provided that in lieu of a criminal fine, they would forfeit assets worth $2.8 million. In return, the government agreed “not to recommend the imposition of any fines.” Nevertheless, the district court ruled that the plea agreement permitted it to impose fines on all four defendants totalling $525,000. The 1st Circuit upheld the district court’s discretion to impose the fine. The appellate court rejected the claim that the government breached the plea agreement by failing to recommend against a fine, ruling that agreement permitted the government to remain silent. However, the court agreed that the plea agreement imposed a $2.8 million ceiling on the total amount of fines plus forfeiture. Since the plea agreement specified that the promise to forfeit $2.8 million was “in lieu of a criminal fine,” the imposition of a fine relieved the defendants of their promise to forfeit, “dollar for dollar.” U.S. v. Maling, 942 F.2d 808 (1st Cir. 1991).
1st Circuit upholds $50,000 fine. (630) The district court imposed a fine of $50,000, the maximum fine permitted by the guidelines for defendant’s offense level of 17. On appeal, defendant argued that the fine would unduly burden his dependents. The 1st Circuit found that this argument was more properly addressed to the district court. Defendant did not point to any law that forbid the district court from assessing the maximum fine, and therefore there was no error in the fine. U.S. v. Wheelwright, 918 F.2d 226 (1st Cir. 1990).
1st Circuit finds “premature” defendant’s argument that the fine was improper because he was an indigent. (630) Defendant argued that the $25,000 fine was improper because he was an indigent. The 1st Circuit rejected the argument as premature, quoting an earlier opinion stating that “we see no reason either to speculate unnecessarily about the possibility of future harm or to intervene to protect [defendant] from what is, at the moment, ‘a merely hypothetical injury.’” U.S. v. Mazzaferro, 907 F.2d 251 (1st Cir. 1990).
1st Circuit holds that defendant lacks standing to appeal stand-committed fine. (630) Defendant was sentenced to six years imprisonment, and also received a stand-committed fine of $15,000. On appeal, defendant contended that the court erred in imposing the fine since he was an indigent. The 1st Circuit held that defendant lacked standing to pursue his appeal because he had not exhausted available administrative remedies, nor was he serving or on the verge of beginning to serve time in consequence of the fine’s nonpayment. Only when those circumstances were present would defendant have standing to appeal. U.S. v. Levy, 897 F.2d 596 (1st Cir. 1990).
1st Circuit requires limited remand to resolve factual dispute. (630) During his first sentencing, defendant claimed he was a millionaire. At a second sentencing defendant stated he was indigent and that the presentence report stating he was a millionaire was inaccurate. Without making a finding on the presentence report, the district court imposed a $15,000 fine. The 1st Circuit held that a limited remand was necessary for the court to indicate on the presentence report whether it relied on the challenged information in sentencing defendant. If the sentencing court did not rely on the disputed information in imposing the fine, there was enough evidence presented to justify it. If the presentence report was relied upon to impose the fine, a third sentencing hearing would be necessary. U.S. v. Levy, 897 F.2d 596 (1st Cir. 1990).
2nd Circuit says failure to inform defendant of mandatory restitution was not plain error. (630) Defendant argued for the first time on appeal that he should be permitted to withdraw his guilty plea because the district court violated Rule 11(b) by failing to inform him of mandatory restitution. The Second Circuit agreed that the court violated Rule 11, but found that the error did not meet the plain error test, and thus defendant could not withdraw his plea. To show plain error in the context of a Rule 11 violation, a defendant must establish that the violation affected his substantial rights and that there was a reasonably probability, but for the error, that he would not have entered the plea. Defendant could not meet this burden. First, the PSR informed defendant before sentencing that restitution of $6500 was mandatory. At sentencing, defendant stated that he had read the PSR and was aware of its contents. In addition, at the Rule 11 proceeding, the court informed defendant that by pleading guilty, he would subject himself to a maximum fine of $250,000. Therefore, there was no reasonable probability that being told at the plea hearing of mandatory restitution of $6500 would have affected defendant’s decision to plead guilty. U.S. v. Vaval, 404 F.3d 144 (2d Cir. 2005).
2nd Circuit says costs of supervision assessed against defendant could not exceed maximum guideline fine. (630) The district court ordered defendant to pay the costs of his supervised probation in the amount of $9741. Under § 5E1.2 (d)(7) of the 1997 guidelines, the costs of imprisonment and supervision are one among several factors considered in determining the defendant’s fine. However, under § 5E1.2(c)(3), defendant faced a maximum fine of $5000. Because the costs assessed exceeded the guideline maximum fine, and because the court gave no indication that it intended to depart from the guidelines, the Second Circuit remanded for resentencing. U.S. v. Mordini, 366 F.3d 93 (2d Cir. 2004).
2nd Circuit refuses to modify fine and restitution where defendant did not disclose financial information. (630) Defendant was convicted of charges relating to a conspiracy to bomb U.S. commercial airliners in Asia, and on charges relating to the 1993 bombing of the World Trade Center. In a related case, the Second Circuit held that it was not an abuse of discretion for a court to impose $250 million in restitution and a $250,000 fine on each indigent defendant where defendants had failed to present evidence that future income from media contacts was not a substantial possibility. U.S. v. Salameh, 261 F.3d 271 (2d Cir. 2001). The court did, however, modify the judgments so that each defendant’s fine and restitution obligations would become payable only if he received income from the sale of his account of the World Trade Center bombing or the events leading up to it. The same modification was proper for defendant Ismoil. However, the Second Circuit did not order such a modification for defendant Yousef because he refused to disclose his financial resources to the probation department. Moreover, Yousef always had funds to travel, purchase bomb ingredients, and flee from authorities. The district court therefore assumed that he would be able to pay the $4.5 million fine. Given his refusal to provide financial information, the court would not limit the source of income from which the fine and restitution could be paid. U.S. v. Yousef, 327 F.3d 56 (2d Cir. 2003).
2nd Circuit approves fine and restitution based upon potential earnings from future media contracts. (630) Defendants, convicted of offenses relating to their involvement in the 1993 World Trade Center bombing, argued that the $250,000 fine and $250,000 in restitution imposed upon each of them failed to take account of their indigency. It was undisputed that defendants were indigent at the time of sentencing, but the judge determined that the level of media interest in the bombing was such that there was a “real possibility” that they could receive large amounts of money from books or television accounts of the crime. The Second Circuit ruled that the district court acted within its discretion in basing the fines on defendant’s future earning potential. Although fines may not be based on the “remote fortuity” that a defendant would win the lottery, this situation, involving a highly publicized crime, was distinguishable. See U.S. v. Wong, 40 F.3d 1347 (2d Cir. 1994). The parties stipulated that the entire amount of fines and restitution should be made contingent upon the realization of future earnings from media contracts and that, in the absence of such earnings, defendants would not be required to pay any fines or restitution, even though they might have minor earnings from other sources. U.S. v. Salameh, 261 F.3d 271 (2d Cir. 2001).
2nd Circuit remands for more specific findings on defendant’s ability to pay fine. (630) Defendant showed that he was presently indigent by pointing to the PSR’s finding that he was unable to pay a fine, and to the fact that he was represented by assigned counsel. Once a defendant has shown his present indigence, “the discretion vested in sentencing courts to waive a fine should generally be executed in favor of such waiver.” U.S. v. Corace, 146 F.3d 51 (2d Cir. 1998). Nonetheless, the district court imposed a $7500 fine, finding that defendant had not demonstrated his inability to pay a fine. The Second Circuit remanded because the grounds for the court’s finding were unclear from the record. On remand, the district court should make more specific findings regarding defendant’s ability to pay. Additionally, the court should allow defendant the opportunity to present evidence of his inability to pay, including affording him the opportunity to show the value (or lack thereof) of his stock. U.S. v. Aregbeyen, 251 F.3d 337 (2d Cir. 2001).
2nd Circuit upholds $5000 fine on currently indigent defendant who was to be deported upon release. (630) The district court imposed a $5000 fine even though defendant was currently indigent, was to serve a 120-month sentence, and was subject to deportation after he was released from prison. The court ordered defendant to pay $25 per quarter from his prison earnings and make monthly payments of 10% of his earnings following his release. In addition, as a condition of supervised release, the court ordered defendant to cooperate with the INS, as a result of which he presumably would be deported. The Second Circuit affirmed the fine. A fine may be imposed on a defendant who is presently indigent if the record contains evidence of his capacity to pay the fine from prison earnings. The district court did not clearly err in concluding that defendant would be able to pay part of the $5000 out of prison earnings and that he could satisfy the balance out of his earnings following his release from prison. Defendant had a GED and had held jobs as a cab driver, a factory worker, and a groom at a racetrack. Upon his release, he would have no other financial obligations; his teenage sons would be in their late twenties or early thirties and no longer dependent on him. Finally, defendant’s deportation did not exempt him from a fine. Although it might be more difficult for him to pay the fine from his earnings in Jamaica, such a consideration has not caused Congress to exempt deported persons from fines. U.S. v. Thompson, 227 F.3d 43 (2d Cir. 2000).
2nd Circuit says Rule 32 does not require notice that PSR information would be used to impose fine. (630) Defendant argued that his $500,000 fine was improper because he did not receive adequate notice that material in the PSR would be taken into account in determining his fine. The Second Circuit held that Rule 32 does not require notice that PSR information will be used in imposing a fine. Rule 32(b)(6) does require that a defendant be given an opportunity to contest the factual and legal determinations in a PSR. This is designed “to ensure that the PSR is completely accurate in every material respect, thereby protecting a defendant from being sentenced on the basis of materially untrue statements or misinformation.” The rule does not require notice of how PSR information will be used. Here, the PSR was furnished to defendant and he was provided an opportunity to state his objections to the report’s contents. The PSR specifically discussed the profits earned by defendant. Thus, defendant was provided adequate notice under Rule 32. The $500,000 fine was reasonable. The district court found that while defendants were on bail and during trial, they made about $1.7 million in profits from continued drug distribution. U.S. v. Greer, 285 F.3d 158 (2d Cir. 2002).
2nd Circuit rules that downward departure did not change offense level for purposes of determining fine. (630) Defendant’s total offense level was 24, which carries a maximum fine of $100,000. Combined with his criminal history category of I, defendant had a guideline range of 51-63 months. At sentencing, the district court said it would “depart downward to Offense Level 10,” and imposed a sentence of five years of probation. The maximum fine for offense level 10 is $20,000. Defendant argued that his $100,000 fine exceeded the maximum fine for his new offense level. The Second Circuit ruled that defendant misunderstood the nature of a downward departure. Despite the district court’s language, the court actually departed downward from the applicable guideline sentencing range, not the offense level. Although the court said (for analytical purposes) that it was lowering defendant’s offense level to 10, this mode of analysis was not required by the guidelines. Notwithstanding the downward departure on defendant’s sentence, his offense level remained 24. Since the fine imposed was within the applicable guideline range, it was not appealable. U.S. v. Monaco, 194 F.3d 381 (2d Cir. 1999).
2nd Circuit upholds $6.3 million fine. (630) Defendant argued that the district court failed to consider the factors required by USSG § 5E1.2(d) and by statute in imposing a $6.3 million fine. The Second Circuit found no error. A sentencing court is not required to articulate specifically its findings regarding a fine other than to state in open court the reasons for the particular sentence. The court here said that it believed defendant possessed substantial assets that were not reflected in the PSR, as evidenced by his style of living, his charity, and his loans to others. A defendant has the burden or proving that he is unable to pay the fine imposed. Defendant failed to meet this burden. His income from 1993 to 1995 ranged from about $700,000 to $7 million and he possessed bank accounts, securities, real estate and artwork with a value of $423,900. The record revealed that the district court reviewed the extensive submissions regarding the propriety of the fine. Both parties were on notice that the maximum fine to be imposed could be $6.3 million. The record showed that the court seriously considered the imposition of the fine, as well as the entire sentence. U.S. v. Reiss, 186 F.3d 149 (2d Cir. 1999).
2nd Circuit infers from convoluted steps that laundered money was drug proceeds. (630) Defendant laundered drug money for Colombian drug traffickers. The money laundering statute authorizes a fine “of not more than twice the amount of the criminally derived property involved in the transaction.” 18 U.S.C. § 1957(b)(2). The judge imposed a fine of $6.3 million based on three money laundering transactions involving a total of $3,150,000. The Second Circuit rejected defendant’s claim that the money that passed through his Swiss bank account to purchase an aircraft for Colombian buyers was not criminally derived. The scheme required many convoluted steps, involving front companies and numerous wire transfers from different accounts, a ruse that is characteristic of drug traffickers. The fine was not inconsistent with the district court’s refusal to enhance defendant’s sentence under USSG § 2S1.2 to reflect his knowledge that he was laundering drug proceeds. The requirements of § 1957 and USSG § 2S1.2 are different. Moreover, the court used a more lenient standard of proof in calculating defendant’s fine. U.S. v. Reiss, 186 F.3d 149 (2d Cir. 1999).
2nd Circuit upholds condition of supervised release requiring payment of local fine. (630) Based on defendant’s faulty removal of asbestos from a building, the City of New York ordered him to pay a fine of $22,000. Defendant later pled guilty in federal court to illegally removing asbestos. The district court ordered, as a condition of supervised release, that defendant pay the city fine, at the principal rate of $611.11 per month over three years. The Second Circuit held that principles of federalism did not bar the federal court from requiring payment of a state or local fine in accordance with local law. Such a condition does not interfere with the municipal enforcement scheme per se; it merely specifies the negative federal consequences that would flow from a decision not to comply with the city’s scheme. However, whether a federal court may require payment of a local fine at a rate not imposed by the city is an unsettled question. The Second Circuit affirmed the condition imposed here for two reasons. First, the district court’s decision not to impose a federal fine was motivated by the fact that the city fine had already been imposed. Thus, it was within the court’s discretion to ensure that defendant actually paid the city fine. Second, in the event the city someday requires a rate of payment different from that imposed here, defendant may seek modification of the condition pursuant to 18 U.S.C. § 3853(e). U.S. v. A-Abras Inc., 185 F.3d 26 (2d Cir. 1999).
2nd Circuit vacates fine because government did not follow § 851(a)(1)’s procedural requirements. (630) Defendant pled guilty to possessing less than one gram of cocaine base in violation of 21 U.S.C. § 844. Section 844(a) provides for a $5,000 fine where a defendant with at least two prior drug convictions is found in unlawful possession of a controlled substance. The Second Circuit vacated defendant’s $5,000 fine because the government did not follow the procedural requirements of 21 U.S.C. § 851(a)(1) to establish defendant’s prior convictions. Although the government did file a prior felony information, this information pertained only to a parallel charge against defendant that had since been dismissed. The government sought to withdraw the information but did not obtain the district court’s authorization under Rule 48(a). On remand, the district court should consider the matter of the appropriate fine and the proposed dismissal of the prior felony information. U.S. v. Rivera, 164 F.3d 130 (2d Cir. 1999), abrogation on other grounds recognized by U.S. v. Suleiman, 208 F.3d 32 (2nd Cir. 2000).
2nd Circuit says $100 special assessment violated ex post facto clause. (630) In 1991, defendant was deported. In November 1994, he was arrested by New York City police officers and convicted of drug charges. On April 19, 1996, while in prison, the INS discovered that he had reentered the country. In June 1997, he pled guilty to illegally reentering the country following deportation. From 1984 through April 23, 1996, a federal sentencing court was required to impose a $50 assessment on a defendant convicted of a felony. On April 24, 1996, a new law increased the special assessment to $100. The Second Circuit ruled that the $100 special assessment imposed on defendant violated the ex post facto clause. The offense of illegal entry is complete as soon as the entry is made. The offense of being found in the U.S. is complete when authorities discover the illegal alien in the U.S. Defendant’s illegal reentry occurred before November 8, 1994, the date of his arrest in New York. Even if defendant had been convicted of being found in the U.S. illegally, the INS’s finding that he was present April 19, 1996 would have made his offense complete five days before the increased special assessment became effective. U.S. v. Labeille-Soto, 163 F.3d 93 (2d Cir. 1998).
2nd Circuit requires findings for fine where defendant was also to pay $2.7 million restitution. (630) Defendant pled guilty to stealing from an employee benefit plan. The PSR said he appeared unable to pay a fine in addition to restitution. Although the district court did not order restitution, defendant had previously signed a consent judgment in a civil suit in which he and his company agreed to pay the pension plan $2.3 million plus $400,000 in interest. Defendant challenged a $60,000 fine. The Second Circuit directed the court to make findings on defendant’s ability to pay the fine. Generally, a defendant bears the burden of proving an inability to pay a fine. Defendant’s financial statement, which detailed his obligation to pay $2.7 million in restitution, provided significant evidence of his inability to pay a fine. Although a sentencing judge is not bound by the recommendation of the PSR, the circumstances obligated the court, before imposing a fine, to indicate the basis for its implicit conclusion that defendant could realistically be expected to pay a fine and not impair his ability to make restitution. U.S. v. Corace, 146 F.3d 51 (2d Cir. 1998).
2nd Circuit considers wife’s assets for fine purposes where defendant recently transferred house to wife. (630) Defendant was convicted of bribing the trustee of a welfare benefits plan. The Second Circuit upheld a $100,000 fine despite defendant’s contention that the district court did not consider the appropriate factors. Although 18 U.S.C. § 3572(a)(1) requires a court to consider a defendant’s income, earning capacity and financial resources in assessing the fine, the court need not articulate that consideration. The $100,000 fine was within the lower end of the guideline range of $10,000 to $2.6 million. The district court did not improperly rely upon defendant’s wife income to conclude that defendant could pay the fine. Around the time of the government investigation, defendant transferred title of his $800,000 house to his wife. The district court could have properly inferred that both defendant and his wife benefited from defendant’s illegal activities. U.S. v. Glick, 142 F.3d 520 (2d Cir. 1998).
2nd Circuit upholds fine of almost $3 million where defendant refused to disclose financial information. (630) Defendant was convicted of arson for a fire that resulted in the death of a firefighter. He argued that the statutory fine of $2,911,599.58 was overly punitive in light of his financial resources. The Second Circuit held that the fine was reasonable and sufficiently supported by the record. The record showed that the district court considered the mandatory factors, including defendant’s known assets and the possible financial dependence of his son and former wife. It also considered defendant’s failure to file tax returns over the past 10 years and his refusal to disclose financial information during pre-sentencing proceedings. The court reasonably inferred that defendant possessed more assets than he admitted, and therefore had the financial resources to pay the large fine imposed. Defendant failed to establish an inability to pay a fine. U.S. v. Tocco, 135 F.3d 116 (2d Cir. 1998).
2nd Circuit reverses where record did not support $50,000 fine. (630) Defendant embezzled over $524,000 from the retirement and pension plans of several school districts. Despite his indigence, the district court ordered defendant to pay full restitution plus a $50,000 fine. The Second Circuit reversed the $50,000 fine because the district court did not sufficiently follow § 5E1.2 and circuit precedent. Prior cases have interpreted § 5E1.2 to require a court to waive a fine where indigence is properly shown. The record did not show that he would have the capacity to pay a fine of $50,000. The district court suggested at sentencing that defendant’s “youth” and “talents” would enable him to become a success in the future. However, it is not clear what period of time the court envisioned by the word “future.” Defendant was a high school drop-out without skills or vocational training. He relinquished his insurance license and was banned from further employment in the securities field. Prior to imprisonment, he earned only $400 a month. This was not the kind of income out of which $50,000 fines are paid. In addition, defendant had a six-year old son. There was no evidence that the court considered the needs of defendant’s son. U.S. v. Drinkwine, 133 F.3d 203 (2d Cir. 1998).
2nd Circuit remands where court made sua sponte departure from guidelines’ fine range. (630) The district court sua sponte departed upward from the guidelines’ fine range and imposed a $500,000 fine on defendant. Defendant contended, and the government conceded, that the fine should be vacated because he did not receive advance notice that the court was going to depart upward. The Second Circuit agreed that resentencing was required on this point. U.S. v. Gabriel, 125 F.3d 89 (2d Cir. 1997), overruling on other grounds recognized by U.S. v. Quattrone, 441 F.3d 153 (2d Cir. 2006).
2nd Circuit upholds $25,000 fine where defendant had lucrative drug business, paid cash for car and did not provide financial reports. (630) Defendant argued that he could not pay a $25,000 fine, noting that he was found eligible for and was represented by assigned counsel, and the PSR stated he was unable to pay a fine. The Second Circuit upheld the court’s finding that he could pay a fine given the remunerative nature of defendant’s drug operation, his purchase of an expensive car with cash, and his lack of cooperation in furnishing financial reports. Defendant did not prove his indigence. U.S. v. Fields, 113 F.3d 313 (2d Cir. 1997).
2nd Circuit says court cannot delegate scheduling of fine payments. (630) Defendant complained that the district court should not have imposed a $1,000 fine because he was indigent, and that the court lacked authority to delegate scheduling of fine payments to the Bureau of Prisons. The Second Circuit upheld the fine but agreed that the court could not delegate the scheduling of the payments. Current indigence is not an absolute barrier to imposing a fine. However, the district court may not delegate the scheduling of fine payments. Although delegating the scheduling of fine payments would free sentencing courts from the awkward inconvenience of having to guess the future, and the legislative history suggests that Congress may have intended to allow some delegation, the plain language of § 3572(d) precludes it. U.S. v. Workman, 110 F.3d 915 (2d Cir. 1997).
2nd Circuit says criminal contempt statute does not permit both prison and fine. (630) Defendant was convicted of criminal contempt under 18 U.S.C. § 401. That section prohibits imposing both a fine and a term of imprisonment. The government argued that the Sentencing Reform Act (“SRA”) amended the statute to permit both to be imposed. The Second Circuit disagreed, holding that the SRA did not alter the prohibition. Defendant’s payment of the fine precluded the court from resentencing defendant to imprisonment. The fact that defendant paid the fine before legally required did not alter this fact. However, on remand the court may revise the fine in light of the invalidity of the imprisonment. A sentencing court may revise upward one component of a sentence after another component has been held invalid. In selecting $25,000 as the appropriate fine, the judge probably had in mind the aggregate punitive effect of this sentence. U.S. v. Versaglio, 85 F.3d 943 (2d Cir. 1996).
2nd Circuit upholds $10,000 fine to be paid from prison earnings over 25 years. (630) Defendant challenged for the first time on appeal the imposition of a $10,000 fine to be paid out of money he would earn while in prison. The Second Circuit held that the fine, which would be paid over the course of 25 years of imprisonment, was not plain error. Despite defendant’s present inability to pay, he would be able to work while incarcerated. The amount of the fine, to be paid over 25 years, was not unreasonable. U.S. v. Hernandez, 85 F.3d 1023 (2d Cir. 1996).
2nd Circuit refuses to consider guideline claim that defendant failed to raise on direct appeal. (630) In a § 2255 motion, defendant made three challenges to a $250,000 fine imposed by the district court. The Second Circuit rejected two of the challenges on the merits and found the third one barred because defendant failed to raise it on direct appeal. The district court’s consideration of the factors in 18 U.S.C. § 3573(a) was shown by its statement that it had “considered the financial implications [of imposing a fine.]” The fine was authorized under 18 U.S.C. § 3571(b)(3), which provides that an individual convicted of any felony may be fined up to $250,000. Defendant’s claim that the fine exceeded the applicable guideline range was procedurally barred due to his failure to raise it on direct appeal. Since guideline claims are neither constitutional or jurisdictional, absent a complete miscarriage of justice, such claims will not be considered on a § 2255 motion where the defendant failed to raise them on direct appeal. Since defendant was informed that he faced a $250,000 fine before he pled guilty, there was no “complete miscarriage of justice.” Graziano v. U.S., 83 F.3d 587 (2d Cir. 1996).
2nd Circuit says failure to give notice of alternative fine was harmless error. (630) Defendant, a chairman and trustee of an employee pension fund, agreed to vote in favor of an investment in return for a payment from the company of five percent of each investment. He challenged the imposition of a $250,000 alternative fine under 18 U.S.C. § 3571(b)(3) on the ground that he was not given prior notice that the court was considering such a departure as required by Fed. R. Crim. P. 32. The Second Circuit found any error harmless. The main argument that defendant claimed he would have made was that he was already subject to lawsuits from the pension fund and the investment company’s trustee in bankruptcy. The district court, however, clearly contemplated defendant’s liability to these parties when it chose not to award restitution. U.S. v. Lopreato, 83 F.3d 571 (2d Cir. 1996).
2nd Circuit approves fine departure where defendant’s gain vastly exceeded the maximum fine. (630) Defendant engaged in tax fraud. The district court originally departed upward from a fine range of $10,000-$100,000 to impose an $850,000 fine, and an additional $96,850 fine to cover the cost of incarceration. In defendant’s first appeal, the Second Circuit ruled the fine departure inappropriate, since the factors cited by the court were already considered by the Sentencing Commission. On remand, the district court imposed the same sentence, but reduced the fine to $650,000 in recognition of a divestiture the court had not previously considered. The court based the fine departure on the alternative-fine provision in Note 4 to § 5E1.2, which suggests an upward departure where two times the amount of defendant’s gain or the amount of loss exceeds the maximum of the fine guideline. The Second Circuit affirmed the departure. The tax loss was $6.7 million. Plainly, a fine of $100,000 did not meet the Commission’s expectation that a fine within the guideline range would be at least twice the gain or loss from the offense. U.S. v. Leonard, 67 F.3d 460 (2d Cir. 1995).
2nd Circuit approves $50,000 fine where defendant did not permit verification of his financial status. (630) Defendant challenged a $50,000 fine, since his PSR said it appeared he was unable to pay a fine, and the government did not object. The Second Circuit upheld the fine, since defendant had not permitted the probation department to verify his financial status. A defendant has the burden of proving an inability to pay a fine. The court is not required to accept a defendant’s unsubstantiated claim of penury, and is entitled to reject such a claim when he has refused to cooperate with the probation department’s attempt to explore his financial resources. Defendant provided no corroboration for his claim of inability to pay. Although the PSR stated that it appeared defendant could not pay a fine, it also noted that defendant had been employed under an alias for more than a decade and had refused to execute forms necessary for the release of his tax and financial records so that the probation department could verify his financial status. U.S. v. Sasso, 59 F.3d 341 (2d Cir. 1995).
2nd Circuit rejects claim that court imposed jail term simply because it could not impose a fine. (630) Defendant argued that the district court violated § 5H1.10 by imposing a jail term only because it could not impose a fine due to his indigence. The Second Circuit disagreed. The district court stated in its written opinion that it did not consider defendant’s inability to pay a fine in deciding whether to sentence him to a prison term. There was no reason to discredit the court’s explanation. The challenged portion of the transcript did not establish that the judge viewed imprisonment, supervised release, and a fine as mutually exclusive sentencing alternatives. U.S. v. Abrar, 58 F.3d 43 (2d Cir. 1995).
2nd Circuit permits cost of imprisonment fine without imposing general fine. (630) The district court imposed a $7,800 cost of imprisonment fine under § 5E1.2(i). However, the court did not impose a fine under § 5E1.2(c) based on defendant’s offense level. The judge also did not make any explicit findings about defendant’s ability to pay. Agreeing with the Seventh and Ninth Circuits, and disagreeing with the Second, Fifth, Tenth and Eleventh, the Second Circuit held that § 5E1.2 does not require the district court to impose a fine under subsection (c) before it can impose a cost of imprisonment fine under subsection (i). If the defendant is not able to pay the entire fine amount that the court would otherwise impose under subsections (c) and (i), the district court may exercise its sound discretion in determining which of the two subsections (or which combination of them) to rely on in pursuing the goals of sentencing. The word “additional” in subsection (i) is simply an expression of the Sentencing Commission’s intent that a defendant’s total fine, including the cost of imprisonment, may exceed the relevant fine range listed in subsection (c). U.S. v. Sellers, 42 F.3d 116 (2d Cir. 1994).
2nd Circuit reverses fine based on remote possibility that defendant wins the lottery. (630) Defendants’ presentence reports showed that they could not pay a fine. Nonetheless, the district court imposed $250,000 fines on each defendant (except for one who was fined $175,000). The court reasoned that it did not want one of the defendants to “get lucky” and win a lottery, and then not have to pay a fine. The 2nd Circuit reversed. A fine should not be imposed in the absence of some evidence of the defendant’s future ability to pay it. District courts must be realistic and should avoid imposing a fine when the possibility of a future ability to pay is based merely on chance. U.S. v. Wong, 40 F.3d 1347 (2nd Cir. 1994).
2nd Circuit approves cost of imprisonment fine under § 5E1.2(i). (630) Defendants, relying on U.S. v. Spriropoulos, 976 F.2d 155 (3rd Cir. 1992), argued that the Sentencing Commission exceeded the scope of its statutory authority by promulgating § 5E1.2(i) (authorizing cost of imprisonment fines). The 2nd Circuit disagreed, persuaded by the 7th Circuit’s decision in U.S. v. Turner, 998 F.2d 534 (7th Cir. 1993). Section 5E1.2(i) serves to deter criminal conduct, and thus is authorized by 28 U.S.C. § 994(c)(3) and (6), and by 18 U.S.C. 3553(a)(2)(A) and (B). The § 5E1.2(i) fine was not an upward departure, even though defendant already received the maximum guideline fine under § 5E1.2(c). The guidelines do not limit the accumulated fines under sections 5E1.2(c) and 5E1.2(i) to the maximum fine under § 5E1.2(c). U.S. v. Leonard, 37 F.3d 32 (2nd Cir. 1994).
2nd Circuit says reasons for fine departure were adequately considered by Commission. (630) Defendant, the 80% partner and CEO of a retail grocery store, was convicted of tax evasion charges for skimming profits from the store since the late 1970s. The district court departed upward from a fine range of $10,000 to $100,000, and imposed an $850,000 fine. The court relied on (1) defendant’s initiation of the cash-skimming scheme, (2) his involvement of others, (3) the fact that he was the sole beneficiary of the scheme, (4) the fact that the scheme existed before the first year charged in the indictment, (5) the presence of unprosecuted offenses, and (6) defendant’s receipt of the time value of the skimmed cash. The 2nd Circuit reversed, finding all of the stated reasons were adequately considered by the guidelines. The first three reasons were considered as factors relevant to defendant’s role in the offense. The fourth and fifth were considered as relevant conduct. The sixth was considered when the Commission established the base offense levels that corresponded to the tax loss caused by a defendant. Application note 4 to § 5E1.2 and the alternative fine provision of 18 U.S.C. § 3571(d) did not support the fine, since they were not cited by the district court. U.S. v. Leonard, 37 F.3d 32 (2nd Cir. 1994).
2nd Circuit agrees that defendant was concealing significant assets. (630) The district judge imposed a $2.25 million fine on defendant based on his conclusion that defendant was concealing significant assets from the court. The 2nd Circuit approved the fine. Defendant was the head of a profitable loansharking operation for a number of years. Defendant bore the burden of establishing his inability to pay the fine, and only offered conclusory allegations that he was unable to pay it. The court also approved a fine under § 5E1.2(i) to pay the costs of incarceration. The court declined to follow U.S. v. Spiropoulos, 976 F.2d 155 (3rd Cir. 1992). U.S. v. Orena, 32 F.3d 704 (2nd Cir. 1994).
2nd Circuit upholds $100,000 fine despite defendant’s claim of inability to pay. (630) Defendant argued that the district court erred in imposing a $100,000 fine despite his claim that he had no money. The 2nd Circuit upheld the fine. Under §5E1.2(a), the court must impose a fine except where the defendant establishes that he is unable to pay and is not likely to become able to pay. The court is not required to accept uncritically a representation by the defendant that he has no assets. The court’s suggestion that defendant might have some assets remaining after forfeiture was not mere speculation, since he had sufficient assets to consider hiring an attorney of his own choosing. U.S. v. Rivera, 22 F.3d 430 (2nd Cir. 1994).
2nd Circuit says court considered defendant’s finances before imposing $40,000 fine. (630) The 2nd Circuit concluded that the district court adequately considered defendant’s financial situation before imposing a $40,000 fine. At sentencing, defendant had the burden of proving an inability to pay the fine. Defense counsel acknowledged that defendant had a net worth of $64,000, that he earned $400 per week, and that he was paying legal fees for representation in the instant case as well as in a civil action. Also, defendant’s wife owned two properties that could be used to lessen the fine’s adverse impact on defendant’s family. U.S. v. Puello, 21 F.3d 7 (2d Cir. 1994).
2nd Circuit upholds $1.75 million fine for defendant with lucrative illegal businesses. (630) Defendant argued that the sentencing court failed to consider defendant’s ability to pay a $1.75 million fine. The 2nd Circuit found that defendant failed to meet his burden of proving an inability to pay, which, given the ample evidence of his participation in lucrative illegal businesses and his considerable assets, was not surprising. U.S. v. Amato, 15 F.3d 230 (2nd Cir. 1994).
2nd Circuit upholds $1 million fine despite eligibility for appointed counsel. (630) The 2nd Circuit upheld a $1 million fine, despite the fact that defendant was represented by assigned counsel. Although representation by assigned counsel is, under note 3 to section 5E1.2, a “significant indicator” of an inability to pay a fine, it is not dispositive. The PSR revealed that defendant received 30 percent of the proceeds from three lucrative drug conspiracy spots, he refused to disclose his earnings from his auto body repair shop, and that he was part owner of a home in Puerto Rico. The PSR concluded there was no support for defendant’s claim to be unable to pay a fine. U.S. v. Rosa, 11 F.3d 315 (2nd Cir. 1993).
2nd Circuit remands for defendant to have opportunity to present evidence of his inability to pay. (630) Although the PSR concluded that defendant was unable to pay a fine, the district court rejected this conclusion, stating that if they “scratch[ed] hard enough,” they would find money, because “most of the drug dealers in this world make lots and lots and lots of money, and most of them hide it.” The 2nd Circuit remanded for defendant to have the opportunity to present evidence of his inability to pay a fine and for the district court to consider the appropriate factors in determining whether or not to impose to a fine. U.S. v. Stevens, 985 F.2d 1175 (2nd Cir. 1993).
2nd Circuit affirms district court’s ability to reallocate fine after sentencing. (630) The district court initially imposed a fine of $78,859 to cover the costs of imprisonment and waived all other fines. However, the calculation was based on an incorrect term of imprisonment, and the correct calculation should have been $41,130. The district court denied defendant’s motion under Fed. R. Crim. P. 35(c) to reduce the fine, and the 2nd Circuit affirmed. The court’s written order rejecting defendant’s motion supported the interpretation that the court simply meant that the financial penalty ought not to exceed $78,859. In rejecting defendant’s motion, the judge stated that he accepted defendant’s determination that the cost of incarceration was $41,130, and that the remaining amount of 37,729 was within the appropriate guideline range for a fine, and thus the total fine of $78,859 was reaffirmed. The order was not a change of sentence, but a change of allocation. U.S. v. Carter, 978 F.2d 817 (2nd Cir. 1992).
2nd Circuit reverses fine that judge incorrectly thought was recommended by presentence report. (630) Defendant’s presentence report indicated a guideline fine range of $17,500 to $175,000, but stated that defendant owned no assets at the time, had no income or expenses, and did not appear to have the ability to pay a fine. Nonetheless, the district judge imposed upon defendant a fine of $17,500 “as recommended.” The 2nd Circuit remanded for resentencing. The presentence report should not be read as recommending a fine in view of its conclusion that defendant did not appear to have the ability to pay a fine. In view of the confused state of the record on this issue, defendant’s sentence was vacated and remanded for reconsideration of his sentence with respect to the fine. U.S. v. Rivera, 971 F.2d 876 (2nd Cir. 1992).
2nd Circuit rules defendant has burden of establishing inability to pay a fine. (630) Defendant challenged a $100,000 fine on the grounds that the district court failed to explain its reasons for imposing the fine and failed to consider defendant’s ability to pay such a fine. The 2nd Circuit found that since the fine was within the guideline range, the district court had no obligation to explain its reasons for the amount of the fine. The provision requiring an explanation of reasons for imposing a sentence at a particular point within a guideline range, if that range exceeded 24 months, 18 U.S.C. § 3553(c)(1), was not applicable here. The court also held that the 1990 version of guideline § 5E1.2 places upon a defendant the burden of proving an inability to pay a fine. Since the case was to be remanded on other grounds, the district court could, in its discretion, allow defendant to present additional evidence regarding his ability to pay the $100,000 fine. U.S. v. Marquez, 941 F.2d 60 (2nd Cir. 1991).
3rd Circuit requires court to evaluate defendant’s likelihood of winning lawsuits before imposing fine. (630) Although defendant had no assets, the district court imposed a $40,000 fine because defendant had filed two lawsuits against the government seeking the return of large amounts of money that were forfeited as being drug proceeds. The district court was advised at sentencing that one court had granted summary judgment in favor of the government, but that defendant had filed an appeal. Defendant characterized his prospects of winning the other lawsuit as not “very promising.” The district court found that if defendant won the lawsuits, he would have the ability to pay the fine. If not, he could petition the court for relief from all or part of the fine. The Third Circuit found that the court erred in concluding that defendant could come back and have the $40,000 fine reduced in the events he lost the lawsuits. Although a previous version of 18 U.S.C. § 3573 permitted a defendant to petition the court to remit or modify a fine, as of a 1987 amendment, § 3573 no longer contains this right. See U.S. v. Seale, 20 F.3d 1279 (3d Cir. 1994). As a result of this erroneous conclusion, the district court erroneously failed to assess defendant’s likelihood of prevailing in his lawsuits. Such an assessment was “an essential prerequisite” to a factual finding on the issue of whether the defendant was likely to be able to pay the fine. The court improperly accepted the face value of the claims without considering the information before it bearing on the likelihood of defendant’s success. U.S. v. Kadonsky, 242 F.3d 516 (3d Cir. 2001).
3rd Circuit holds that defendant with minimum wage job had ability to pay $5000 fine. (630) The district court ordered defendant to pay a $5000 fine in equal monthly installments over defendant’s five-year period of supervised release. The Third Circuit affirmed, finding defendant’s earning capacity upon his release from prison would be more than sufficient to pay the fine on an installment basis. Defendant was 21 years old at the time of sentencing, received a high school degree and satisfied the requirements for an associates degree in computer science at a college in the Dominican Republic. He could read, write and speak four languages. He was in good health, and had no history of mental problems or drug or alcohol abuse. If on release defendant held a 40-hour per week job earning minimum wage of $5.15 per hour, he would earn $892.66 per month. Allowing 80% of this sum for subsistence resulted in $178.50 per month, or $2142 per year, for payment of any fine. Accordingly, defendant would be capable of paying the fine in less than three years while providing subsistence for him family in addition to that provided by his wife, who worked as a waitress. U.S. v. Torres, 209 F.3d 308 (3d Cir. 2000).
3rd Circuit holds that court’s incorrect advice as to maximum fine was harmless error. (630) When taking defendant corporation’s plea, the district judge, apparently misled by defendant’s plea agreement and the government’s plea memorandum, advised defendant’s representative that the maximum fine for one count was the greatest of $10,000 or twice the gain or twice the loss. In fact, the correct maximum statutory fine on this count was the greatest of $500,000 or twice the loss or gain. The Third Circuit held that the incorrect advice was harmless error since the total fine actually imposed was less than the total fine to which defendant believed it was exposed. The district court correctly advised defendant that the maximum fine on its other count was one million dollars or twice the gain or loss. The district court imposed a total fine for both counts of one million dollars, which was less than the $1,010,000 exposure defendant believed he had. Under these circumstances, the error was harmless and defendant would not be permitted to withdraw its plea on these grounds. U.S. v. Electrodyne Systems Corporation, 147 F.3d 250 (3d Cir. 1998).
3rd Circuit says court’s refusal to allow six months to pay fine did not mandate plea withdrawal. (630) Defendant corporation’s plea agreement contained a stipulation that $140,000 was an appropriate fine and that the fine should be paid no later than six months after sentencing. Defendant argued that the six-month provision for payment of the fine was part of a specific recommended sentence, and the district court’s failure to give defendant six months to pay the ordered fine required that it be given the opportunity to withdraw its plea. The Third Circuit held that the court’s refusal to provide six months for paying the fine did not mandate plea withdrawal. The plea agreement also stated that its stipulations were not binding on the court. Also, the district court advised defendant that if the penalty imposed was more severe than anticipated by defendant, the plea could not be withdrawn. U.S. v. Electrodyne Systems Corporation, 147 F.3d 250 (3d Cir. 1998).
3rd Circuit refuses to limit judge’s ability to order fine. (630) Defendant corporation’s plea agreement contained a stipulation that $140,000 was an appropriate fine. The appellate court remanded because the district court did not resolve various disputed matters before sentencing. Defendant asked the appellate court to order the district court not to impose a fine over $140,000. Defendant said the PSR confirmed its inability to pay more than the stipulated fine and argued that by adopting the factual findings of the PSR, the district court also made this finding. The Third Circuit refused to limit the judge’s ability to order a fine. A constant problem in establishing fines is that defendants control the flow of information to the probation office. This is exacerbated by probation officers’ lack of accounting training and the fact that here, the defendant was a corporation, which could be less than forthcoming without facing the risk of jail. The financial statements provided by defendant were merely an accountant’s compilation, rather than an audited financial statement. Such compilations are not designed to be relied upon by one who does not have other financial information about the company. On remand, the district judge has the power to require production of necessary financial documents so as to have a basis for any fine which is to be imposed. U.S. v. Electrodyne Systems Corporation, 147 F.3d 250 (3d Cir. 1998).
3rd Circuit upholds $500,000 fine under Corrupt Organizations Act. (630) Defendant companies and their chief operating officer were convicted of visa fraud, environmental crimes, conspiracy and racketeering. They contended that the $500,000 fine imposed under the Corrupt Organizations Act, 14 V.I.C. § 605, was excessive. The Third Circuit affirmed the fine since defendants conceded that the fine fell within the range permitted by law and did not point to any legal or factual error underlying the assessment of a fine in this amount. U.S. v. West Indies Transport, 127 F.3d 299 (3d Cir. 1997).
3rd Circuit finds 50-fold fine departure unsupported by clear and convincing evidence. (630) The district court departed upward from a guideline maximum fine of $125,000 to a fine of $7 million. The court determined that this was the amount necessary to disgorge defendant of illegal profits he kept hidden in foreign bank accounts. The 3rd Circuit held that this departure, by a factor in excess of 50, had to be supported by clear and convincing evidence. The court’s findings were not supported by the record, and therefore were clearly erroneous. Defendant and two co-conspirators did transfer millions of illegally gained profits to a foreign country. However, there was no evidence that defendant received control of the entire money. The district court assumed that defendant had control over the funds from the fact that the government obtained payments of less than $800,000 from defendant’s co-conspirators. This assumption could not withstand scrutiny under the clear and convincing evidence standard. U.S. v. Bertoli, 40 F.3d 1384 (3rd Cir. 1994).
3rd Circuit says court may recalculate defendant’s net worth to determine if he can pay fine. (630) The PSR stated that defendant had a negative net worth of $20,000 and a negative net monthly cash flow. Nevertheless, the district court imposed the guideline minimum $10,000 fine based on defendant’s future ability to pay a fine. The district court noted that defendant’s net worth was about $20,000 when an undocumented, unsecured $30,000 loan payable to his mother was subtracted from his total liabilities. The 3rd Circuit upheld the fine. Imposing a fine based solely on future ability to pay is permissible. Moreover, a district court may sua sponte recalculate a defendant’s net worth where, as here, the PSR recommends that a fine be imposed. Although the government did not object to this portion of the PSR, defendant still had the burden to prove he could not pay the recommended fine in the future. U.S. v. Carr, 25 F.3d 1194 (3rd Cir. 1994).
3rd Circuit requires clear and convincing evidence for seven-fold fine departure. (630) Defendants each had a guideline fine range of $25,000 to $250,000. To ensure that defendants did not profit from the sale of the story of their crime, the district court departed upward to a fine of $1.75 million for one defendant and $500,000 for the other. The 3rd Circuit reversed both departures. The seven-fold, $1.5 million departure for the first defendant was sufficiently extreme to require a clear and convincing standard of proof. That standard was not met here. The letter the government submitted in support of the departure contained only “hypothetical” figures proffered by a person who had no knowledge of the offers being considered. There was no basis for the district court’s conclusion that defendant might not employ a collaborator (who would share in his profits) and might even earn more money than the agent hypothesized. The facts supporting the other departure were even less compelling. Thus, although proof by clear and convincing evidence was not required for the two-fold departure, the evidence did not meet this standard. U.S. v. Seale, 20 F.3d 1279 (3d Cir. 1994).
3rd Circuit says court may consider future earning capacity from possible story sales to determine ability to pay fine. (630) The 3rd Circuit held it was proper for the district court to consider the possibility that defendants’ would sell the story of their crime in determining that they were each able to pay a fine. Section 5E1.2(a) speaks in terms of whether a defendant is likely to become able to pay. A court is not required to consider whether a defendant actually intends to do that which enables him or her to pay. Thus, the fact that one defendant disclaimed any interest in capitalizing on her story did not diminish her capability to do so. The district court properly determined that each defendant was able to pay a fine. Although one defendant purportedly assigned his proceeds and the other claimed not to be interested in pursuing a sale, each of these reasons involved an element of choice. The question is not whether a defendant had access to funds to pay a fine, but whether a defendant chooses to become able to pay. U.S. v. Seale, 20 F.3d 1279 (3d Cir. 1994).
3rd Circuit refuses to find cost of imprisonment fine plain error, since fine was vacated for other reasons. (630) Defendant argued for the first time on appeal that a cost of imprisonment fine under section 5E1.2(i) was invalid. The 3rd Circuit refused to address this issue. First, defendant did not raise this issue below. Circuit courts have divided on this issue, and therefore the decision to impose the fine could not be “plain error.” Second, since defendant was already to be resentenced based on other reasons, his fine had to be vacated. At resentencing, the district court could consider his claim about section 5E1.2(i) U.S. v. Carrozza, 4 F.3d 70 (3rd Cir. 1993).
3rd Circuit rejects order requiring donation to charity. (630) Defendant was convicted of child pornography charges, and the district court ordered him to make a $5,000 donation to the Pittsburgh Coalition Against Pornography and pay incarceration costs of $17,904. The 3rd Circuit reversed. There is nothing in the Sentencing Reform Act or the guidelines permitting the court to order a defendant to make a donation to a charitable organization. Moreover, in U.S. v. Spiropoulos, 976 F.2d 155 (3rd Cir. 1992), the court held that a fine based on the costs of incarceration was invalid. U.S. v. Harvey, 2 F.3d 1318 (3rd Cir. 1993)3.
3rd Circuit holds that SRA does not authorize fine for cost of imprisonment. (630) The 3rd Circuit held that a fine under section 5E1.2(i) to pay to the government the costs of imprisonment was not authorized by the Sentencing Reform Act (SRA). Neither 18 U.S.C. section 3553(a), which sets forth the purposes in sentencing, nor section 3572(a), which details the factors to consider in imposing a fine, authorize fines to pay for the costs of incarceration. Although the fines collected under section 5E1.2(i) are actually used to provide restitution to crime victims, the court rejected restitution as a purpose of the fine. The plain language of the guideline, rather than the ultimate manner in which the money is spent, controls the analysis of the guideline. Moreover, if the purpose of the guideline were restitution, it might be irrational, because the cost of a victim’s incarceration bears no apparent relationship to the amount that a particular victim has been injured. U.S. v. Spiropoulos, 976 F.2d 155 (3rd Cir. 1992).
3rd Circuit remands because district court failed to state that it considered defendant’s ability to pay fine. (630) Defendant contended that the district court erred in imposing a $58,000 fine because it failed to consider his ability to pay a fine. The 3rd Circuit found that the district court made no finding as to defendant’s ability to pay a fine, and thus, remanded the case for resentencing on the fine. In cases where it is clear that a defendant has the ability to pay a fine, such an omission might be harmless. Here, however, the presentence report concluded that defendant did not have the ability to pay a fine. Although defendant had $60,000 worth of equity in real property, the mortgage was in arrears and the property was being foreclosed. Thus, the record did not clearly establish that defendant had the ability to pay a fine. U.S. v. Demes, 941 F.2d 220 (3rd Cir. 1991).
3rd Circuit upholds $2,000 fine that would require defendant to sell residence to pay. (630) The guidelines required a mandatory fine of at least $2,000 for defendant’s offense, “except when defendant establishes that he is unable to pay the fine” or “when the fine would unduly burden the defendant’s dependents.” Defendant, whose only significant asset was a house worth $5,000, argued that he should not be forced to sell his residence to pay the $2,000 fine. The 3rd Circuit upheld the fine, noting that selling the property would not have an unduly severe impact on him or his dependents because his dependents did not live at home, defendant would be in jail and therefore did not need a residence, and defendant lived much of the time at his girlfriend’s house and used the house primarily for business purposes. Moreover, defendant did not present any countervailing evidence or submit a requested financial statement to aid the court in sentencing. U.S. v. Preston, 910 F.2d 81 (3rd Cir. 1990).
3rd Circuit holds Criminal Fine Enforcement Act provision governing interest on fines applies to all crimes committed between December 31, 1984 and November 1, 1987. (630) The 3rd Circuit held that the interim Criminal Fine Enforcement Act provision governing interest on fines imposed [18 U.S.C. § 3565(b)(2)] applies to all crimes committed between December 31, 1984 (the effective date of the section) and November 1, 1987 (the effective date of the Guidelines). All crimes committed after November 1, 1987 are governed by the Sentencing Reform Act § 212 [18 U.S.C. § 3612(f),] which provides for interest payments on criminal fines. Thus, the fines imposed were proper and the defendants were required to pay interest. U.S. v. Atlantic Disposal Service, 887 F.2d 1208 (3d Cir. 1989).
4th Circuit rejects Apprendi challenge to fine based on defendant’s admissions of gain. (630) Defendant was the mastermind of a multi-million scheme to defraud the government by supplying defective and nonconforming spare parts for U.S. military aircraft, vehicles, and weapons systems. He argued for the first time on appeal that his $3 million fine was not based on facts found by the jury. The Fourth Circuit found no Apprendi error, because defendant’s admissions established both that he enjoyed a gross gain in excess of $1.5 million and that his offense produced a loss of at least the same amount, either of which alone would be sufficient to support the $3 million fine. Defendant admitted in a Rule 29 motion that he received “94.7% of the total gold” purchased during his scheme. Defendant proffered bank records indicating that the total value of the gold purchased during the scheme was $2.29 million. Thus, his own admissions established that he received a gain of at least $2.16 million. He also admitted at sentencing that his offense caused a loss of no less than $2.5 million. Because defendant’s admissions enlarged the maximum fine to which he could be sentenced to an amount in excess of the $3 million sum that was actually imposed, there was no Apprendi error. U.S. v. Day, 700 F.3d 713 (4th Cir. 2012).
4th Circuit rules fine was not retribution for exercising right against self-incrimination. (630) Defendant argued that his $25,000 fine was imposed as retribution because he exercised his Fifth Amendment right against self-incrimination. At sentencing, defendant’s lawyer told the court that her client did not intend to divulge his financial assets to the probation officer, for fear that it could incriminate him and hamper his chances for a successful appeal. In response, the court stated that “the inference should be drawn against [defendant] because of this in terms of sentencing.” It then found that the Guidelines recommended a fine of $25,000 to four million dollars, and imposed the $25,000 fine. The Fourth Circuit found no error. Despite the court’s comments, the record did not show that the court actually relied on defendant’s failure to divulge financial information in deciding to impose the fine. The court actually imposed the minimum fine called for by the Sentencing Guidelines. When the court explained its decision on the fine, it did not mention defendant’s refusal to submit financial information. Rather, it determined that defendant was capable of paying the fine. U.S. v. Jeffers, 570 F.3d 557 (4th Cir. 2009).
4th Circuit holds that guidelines do not limit fine when offense of conviction allows a fine per day. (630) The maximum fine set forth in the fine table “does not apply if the defendant is convicted under a statute authorizing … a fine for each day of violation. In such cases, the court may impose a fine up to the maximum authorized by the statute.” § 5E1.2(c)(4). The statute of conviction, 33 U.S.C. § 1319(c)(1) authorized a fine for each day of violation. The magistrate judge found that § 5E1.2(c)(4) is a directive that the guidelines do not provide any maximum fine when the statute of conviction authorizes a fine per day of violation. Under this interpretation, the maximum fine for each of 12 counts was $100,000 under 18 U.S.C. 3571, the alternative fine statute. On appeal, however, the district court, agreed with defendant that the guideline language referring to the “the maximum [fine] authorized by the statute” limits the potential fine to the maximum specified in the statute of conviction. Under this interpretation, the maximum fine for each count was $25,000. The Fourth Circuit found the district court’s interpretation incorrect, since under Note 5, “the guidelines do not limit the maximum fines” when § 5E1.2(c)(4) applies. There is no conflict between the guideline and the commentary. Rather, Note 5 explains the import of § 5E1.2(c)(4), namely, that the guidelines impose no limit on the maximum fine when the offense of conviction allows a fine per day of violation. U.S. v. Hong, 242 F.3d 528 (4th Cir. 2001).
4th Circuit holds that any error in fine calculation did not affect defendant’s substantial rights. (630) The district court calculated the loss from defendant’s fraud, and the corresponding fine range, based on defendant’s original contract with its victim. After defendant was sentenced, the government discovered that defendant and the victim had entered into a supplemental contract. As a result, the government filed a sentencing memo in a co-conspirator’s case which calculated the loss based on the amended contract. On appeal, defendant asked to be resentenced in light of the amended contract, suggesting that it was newly discovered evidence that the government failed to disclose at his sentencing. However, defendant was in as good a position as anyone to correct the facts regarding its contractual arrangement. It could have challenged, but did not, the specific loss figure that the court used at sentencing. The Fourth Circuit ruled that even if the error in calculating defendant’s fine range was plain, it did not affect defendant’s substantial rights. The district court imposed a fine that was almost exactly in the middle of the fine range used by the district court. The fine would be only slightly above the middle of the fine range as calculated by defendant. U.S. v. Brothers Const. Co. of Ohio, 219 F.3d 300 (4th Cir. 2000).
4th Circuit says assessments for both CCE offense and underlying drug offense are double counting. (630) The district court imposed a $300 “special assessment” collectively on all of defendant’s convictions, pursuant to 18 U.S.C. § 3013. In 1994, § 3013 required a special assessment of $50 per offense on any person convicted of a felony against the U.S. When this assessment is imposed twice for the same act, the Supreme Court has held that it is a “collateral consequence” amounting to an “impermissible [double] punishment.” The government conceded that defendant’s drug conspiracy was a lesser-included offense to the CCE charge. Because defendant was assessed $50 twice for the same act (for the CCE and drug conspiracy convictions), the Fourth Circuit remanded with instructions to vacate one of the $50 assessments. U.S. v. Brown, 202 F.3d 691 (4th Cir. 2000).
4th Circuit vacates fines where PSRs did not contain current financial information. (630) Defendants, officers of the United Way of America, were convicted of fraud and tax evasion stemming from their use of UWA funds for personal gain. The district court imposed a $300,000 fine on the first defendant and a $30,000 on the second defendant. Defendants argued on appeal that they lacked the ability to pay the fines. The Fourth Circuit found that it was unable to review the issue because defendants’ PSRs did not contain current financial information. Further, the district court did not make any findings on the statutory factors listed in 18 U.S.C. § 3572(a). Under these circumstances, effective appellate review was impossible. The court remanded with instructions for the district court to order revised PSRs to reflect the current financial conditions of defendants, reevaluate whether to impose fines in light of the updated information, and, if it decided to impose any fines, make the required statutory findings. U.S. v. Aramony, 166 F.3d 655 (4th Cir. 1999).
4th Circuit says fine remained after revocation of supervised release despite court’s statements. (630) After revoking defendant’s supervised release and imposing a new term of imprisonment, the district court’s revocation order stated that the unpaid portions of defendant’s fine and reimbursement costs for his court appointed counsel “remain[ed] in effect.” Defendant argued that the district court could not re-impose those obligations in the written judgment order revoking his supervised release when it failed to re-impose them in open court in the revocation hearing. The Fourth Circuit found that those obligations existed regardless of the court’s statements in the revocation hearing or the written order. Their inclusion in the revocation order was nothing more than a reminder and, therefore, was proper. U.S. v. Johnson, 138 F.3d 115 (4th Cir. 1998).
4th Circuit approves consideration of prison earnings in determining ability to pay fine. (630) Defendant argued that the district court erred by considering his projected earning while in prison to evaluate his ability to pay a fine. The Fourth Circuit held that a district court may consider income earned during incarceration through the Inmate Financial Responsibility Program in determining whether to impose—and the amount of—a fine. The district court properly considered amounts defendant could earn in prison and determined that he could earn $300 in the first three years of his confinement, and $43 per month during the remainder of his confinement. The court then found he could afford minimum monthly payments of $50 during the 57 months of his supervised release, and imposed a total fine of $9700. U.S. v. Walker, 83 F.3d 94 (4th Cir. 1996).
4th Circuit prohibits delegating timing and amount of fine payments to probation officer. (630) In U.S. v. Johnson, 48 F.3d 806 (4th Cir. 1995), the Fourth Circuit held that a district court may not delegate to the probation officer the authority to determine the amount and timing of restitution installment payments, without retaining ultimate authority over such decisions. Here, the Fourth Circuit held that Johnson also applies to fines. Like restitution, the statutory duty imposed upon district courts to fix the terms of a fine must be read as exclusive because the imposition of a sentence, including the terms of probation or supervised release, is a core judicial function. U.S. v. Miller, 77 F.3d 71 (4th Cir. 1996).
4th Circuit upholds $300,000 fine where defendant did not complete personal financial statement. (630) Defendant argued that the evidence did not demonstrate his ability to pay a $300,000 fine. The Fourth Circuit upheld the fine because the court considered all of the necessary factors under 18 U.S.C. § 3572(a), and defendant did not demonstrate his inability to pay the fine. The defendant bears the burden of demonstrating his present and future inability to pay. Defendant declined to complete a personal financial statement for the presentence report and did not provide any evidence at the sentencing hearing showing an inability to pay a financial sanction. U.S. v. Hyppolite, 65 F.3d 1151 (4th Cir. 1995).
4th Circuit upholds defendants’ ability to pay restitution and fine. (630) Defendants argued for the first time on appeal that the district court failed to make specific findings of fact concerning each defendant’s ability to pay a fine and restitution. The Fourth Circuit held that the PSRs, which were adopted by the district court, contained sufficient facts to support the fines and restitution. The reports described excellent job histories, earning records, and skill levels in the computer field, and indicated that each defendant had a future earning potential. Both defendants had founded their own businesses and had a history of success in business management. Although both defendants filed for bankruptcy before sentencing and had a negative monthly cash flow at the time of sentencing, these were temporary setbacks due to the prosecution. U.S. v. Castner, 50 F.3d 1267 (4th Cir. 1995).
4th Circuit remands for explanation of upward departure on fine. (630) Defendant pled guilty to conspiring to defraud the U.S. Although defendant had a fine range of $6,000 to $60,000, the district court imposed a $100,000 fine, stating that defendant’s offense was “a crime of greed” and that the fine imposed would “take some of the profits out of it.” The Fourth Circuit remanded for the district court to articulate a more complete explanation of its reasons for the upward departure. The court’s conclusory statements did not give the appellate court a meaningful opportunity to determine whether the departure was based on a factor not adequately considered by the Sentencing Commission. U.S. v. Chatterji, 46 F.3d 1336 (4th Cir. 1995).
4th Circuit says unclear financial status is no reason to refuse to impose fine. (630) The district court did not impose a fine on defendant because it was unable to determine his financial condition. It noted that no definite proof could be made of defendant’s equity in any properties he owned, and that imposing a fine would be a “useless gesture.” The Fourth Circuit reversed. A fine must be imposed in all cases, except where the defendant establishes that he is unable to pay and is not likely to become able to pay a fine. A defendant cannot meet this burden by frustrating the court’s ability to assess his financial condition. U.S. v. Hairston, 46 F.3d 361 (4th Cir. 1995).
4th Circuit finds court considered defendant’s ability to pay $2,000 fine. (630) Defendant argued that the district court failed to consider her ability to pay a $2,000 fine. The 4th Circuit disagreed. Defendant failed to object to the fine at sentencing. Although defendant had a fine range of $12,500 to $2 million, the court fined defendant only $2,000, and waived interest, because of her inability to pay. The court also allowed the fine to be paid over her 13 years in prison and five years of supervised release. U.S. v. Francisco, 35 F.3d 116 (4th Cir. 1994).
4th Circuit rules that district court found that defendant could pay $2000 fine. (630) The 4th Circuit rejected defendant’s claim that the district court failed to make a specific finding that he could pay the $2000 fine imposed. First, defendant failed to object to the fine at his sentencing hearing. Second, the district court made a specific factual finding that defendant was “unable financially to pay a fine in a greater amount” than $2000, and accordingly departed downward from the $6000 minimum under the guidelines. The presentence report supported the departure, stating that defendant had “no income, assets, or financial obligations,” but would be able “to earn income and make payments through the Inmate Financial Responsibility Program which could be applied toward fine payments.” It was not necessary for the court expressly to state that defendant could earn the $2000 while in prison. U.S. v. Taylor, 984 F.2d 618 (4th Cir. 1993).
4th Circuit affirms that difficulty in reaching assets does not prohibit fine. (630) Although the presentence report showed that defendant had no assets, the district court imposed an $25,000 fine based on evidence that defendant had assets in Saudi Arabia and Ecuador. The court doubted whether the fine would be collectable. The 4th Circuit affirmed the fine, since defendant did not dispute that he had access to overseas assets, and questions regarding the difficulty in collecting a fine do not affect the validity of the fine. U.S. v. Salama, 974 F.2d 520 (4th Cir. 1992).
4th Circuit upholds fine that defendant would be unable to pay unless he and his wife sold their home. (630) The district court determined that defendant had sufficient assets to pay a fine for the cost of confinement based upon his interest in a $246,000 house that he and his wife owned as tenants by the entirety. The court recognized that defendant’s and his wife’s interests in the residence were not severable, and ordered that the fine should be a lien against his interest in the home if the home was sold. The 4th Circuit rejected defendant’s claim that the fine violated 18 U.S.C. section 3572(d) because the fine was not due on a date certain or within five years. Section 3572(d) does not require that a court provide for payment on a date certain or in installments. It requires immediate payment of any fine unless the court extends payments by providing for payment on a date certain or in installments. Because the district court judgment did not provide for other than immediate payment, the payment was due immediately, and the five-year limitation on installment payment schedules did not apply. U.S. v. Gresham, 964 F.2d 1426 (4th Cir. 1992).
4th Circuit vacates because court failed to make findings with regard to fine. (630) In U.S. v. Harvey, 885 F.2d 181 (4th Cir. 1989), the 4th Circuit vacated and remanded for reconsideration of the fine imposed because the district court failed to make specific findings with regard to the factors listed in the applicable statute concerning fines. Here, the 4th Circuit vacated because the district court failed to comply with Harvey. U.S. v. Arnoldt, 947 F.2d 1120 (4th Cir. 1991).
4th Circuit prohibits upward departure from guideline fine range based upon a defendant’s wealth. (630) The 4th Circuit reversed an upward departure from the guideline fine range which was based on defendant’s wealth. Guideline section 5H1.10 provides that a defendant’s socio-economic status is “not relevant” in determining a defendant sentence, and monetary wealth or the lack thereof is typically an accurate indicator of socio-economic wealth. Moreover, the Sentencing Commission adequately considered a defendant’s ability to pay in formulating the fine guidelines, since a district court is expressly authorized to impose a fine below the minimum fine range when a defendant is unable to pay the minimum fine. In addition, “to permit an upward departure based on a defendant’s ability to pay a greater fine would be tantamount to holding that the district court may impose any fine amount it determined the defendant’s economic situation would permit, thereby effectively nullifying the fine guideline.” U.S. v. Graham, 946 F.2d 19 (4th Cir. 1991).
4th Circuit reviews departure from guideline fine range under same standard as other departures. (630) The 4th Circuit held that it was appropriate to review the district court’s upward departure from the guideline fine range under the same standard of review as other departures. Consequently, the court must first review de novo the statement of reasons offered by the district court for the departure to determine whether it identified a factor not adequately considered by the sentencing commission. Second, the court then reviews the sufficiency of the evidence to support the stated factor under the clearly erroneous standard. Finally, the court must determine whether the district court abused its discretion in determining that the factor is sufficiently important such that a sentence outside the guideline range should result and that the extent of the departure is reasonable. U.S. v. Graham, 946 F.2d 19 (4th Cir. 1991).
4th Circuit rules guidelines do not apply when the statutory maximum fine exceeds $250,000. (630) Defendants challenged the District Court’s method of calculating the $250,000 and $1,000,000 fines. The 4th Circuit found nothing in the record to indicate that one defendant had been punished for refusing to supply a complete financial statement to the Probation Department. Nor were the fines imposed in violation of the fine table found at § 5E4.2(c)(2) of the guidelines, because the maximum fines set out in that section do not apply when the statutory maximum fine exceeds $250,000 (see (c)(4)). Therefore, the sentencing court was not required to explain why it refused to follow the guidelines in determining the amount of the fines. Additionally, the sentencing court did not err in failing to make explicit findings as to the issue of ownership of money found on one of the defendants. The defendant simply denied ownership, which was insufficient to raise an issue of ownership. U.S. v. Roberts, 881 F.2d 95 (4th Cir. 1989).
4th Circuit rules that fine within limits of statute but in excess of guidelines was proper. (630) Defendant’s $1,000,000 fine was set under guideline § 5E4.2. Application Note 6 to that § provides that a larger fine than that set forth in the tables may be justified if the defendant failed to disclose income or assets. Because this finding was supported by the record and was within the range set forth in the statute of conviction, the sentencing court did not err. U.S. v. Roberts, 881 F.2d 95 (4th Cir. 1989).
5th Circuit says defendant could pay fine from large monthly disability payments. (630) Defendant, a doctor who maintained a medical practice that fraudulently obtained large quantities of hydrocodone, challenged for the first time on appeal the $550,000 fine assessed by the district court. He claimed that the fine was unreasonable because it far exceeded the $75,000 suggested by the Guidelines. The PSR showed that defendant’s net worth was $119,477.80 with a total debt of over $150,000. The Fifth Circuit upheld the $550,000 fine. Although it was above the guidelines range, the PSR reflected that defendant had a monthly income of $22,240 through a personal disability policy, and that this policy would pay him at least $16,000 per month until his death. The district court considered defendant’s ability to pay and adopted the facts in the PSR, which reflected an income on disability that easily covered the fine amount, even if the court limited its consideration to defendant’s expected income from this policy while serving his prison sentence. U.S. v. McElwee, 646 F.3d 328 (5th Cir. 2011).
5th Circuit upholds fine that approximated loss incurred by victims. (630) The PSR stated that defendant reported having no assets or liabilities, and he did “not have the ability to pay a fine in addition to restitution at this time.” The PSR contained no findings about defendant’s future earning capacity, but noted that defendant was 50 years old, had three crushed discs in his back, and had diabetes. The district court did not order restitution, but instead imposed a fine of $65,000, approximately the amount of loss incurred by the victims. The Fifth Circuit upheld the $65,000 fine. In U.S. v. Fair, 979 F.3d 1037 (1992), the court found that the district court erred by imposing a fine after adopting the PSR, which had recommended against a fine. Here, however, the PSR only said that defendant was financially unable “to pay a fine in addition to restitution at this time.” Moreover, even if the court erred in imposing the fine, this would not have affected defendant’s substantial rights, because the total loss incurred by the victims was $64,467, and the district court imposed a fine in lieu of restitution of about the same amount. U.S. v. Brantley, 537 F.3d 347 (5th Cir. 2008).
5th Circuit upholds $20,000 fine where PSR indicated defendant had net worth of $100,000. (630) Defendant argued that the district court clearly erred by imposing a $20,000 fine. District courts are directed to impose a fine in all cases, unless the defendant establishes that he will be unable to pay. Given that the PSR indicated that defendant had a net worth o $100,000, the Fifth Circuit held that the district court did not clearly err by imposing a $20,000 fine. U.S. v. Magnuson, 307 F.3d 333 (5th Cir. 2002).
5th Circuit upholds fine for defendant who refused to provide financial information. (630) Defendant challenged the court’s imposition of a $10,000 fine, even though it was within the sentencing guidelines range. However, a fine is appropriate unless the defendant establishes that he would be unable to pay. In this case, defendant refused to sign a personal financial statement, a consent and authorization for access to financial records, or forms swearing that he lacked assets and had no appreciable net worth. Since he willfully refused to carry his burden, the Third Circuit upheld the fine. U.S. v. Tovias-Marroquin, 218 F.3d 455 (5th Cir. 2000).
5th Circuit upholds fine that was consistent with PSR’s recommendations. (630) Defendant challenged for the first time in his supplemental brief the district court’s imposition of a $10,000 fine. The Fifth Circuit approved the fine, which was below the guideline range of $15,000 to $150,000, and was within the PSR’s recommendations. The PSR stated that “[i]t does not appear the defendant has the financial resources to pay a fine with the guideline range.” However, the report however further advised that the court should impose a fine amount for the cost of any imprisonment or supervised release. Finally the report also indicated that defendant might be able to pay a lesser fine, since he and his wife had a net monthly cash flow of $387. The district court imposed a $10,000 fine, without interest, payable in $300 monthly installments beginning 60 days after defendant was released on supervision. U.S. v. Landerman, 167 F.3d 895 (5th Cir. 1999).
5th Circuit holds defendant who failed to return Personal Financial Statement did not prove inability to pay fine. (630) Defendant argued that the trial court erred in imposing a $25,000 fine as a condition of his sentence. He claimed that his PSR supported his indigent status and made no recommendation concerning his ability to pay a fine. The Fifth Circuit held that defendant did not meet his burden of proving an inability to pay the fine. The PSR expressly stated that defendant did not return the Personal Financial Statement he was provided. Consequently, the probation officer had no information from which to assess defendant’s ability to pay a fine. The trial court said that it could not determine defendant’s ability to pay a fine because of insufficient information. Because defendant failed to establish he was unable to pay a fine, the trial court did not abuse its discretion by imposing the $25,000 fine, which was well within the guideline range. U.S. v. Martinez, 151 F.3d 384 (5th Cir. 1998).
5th Circuit rules increased special assessment was erroneous. (630) When defendants committed the crime of illegally reentering the U.S., the special assessment under 18 U.S.C. § 3013 for each felony conviction was $50. Thereafter, effective April 24, 1996, Congress increased the special assessment to $100 per felony. The government conceded that the district court incorrectly imposed a $100 special assessment for offenses committed prior to the effective date of the amendment. Therefore, the 5th Circuit reversed the special assessment and remanded to impose the $50 assessment. U.S. v. Herrera-Solorzano, 114 F.3d 48 (5th Cir. 1997).
5th Circuit rejects $10,000 fine for insolvent defendant. (630) Defendant argued that because he was insolvent, it was error for the court to impose a $10,000 fine. The Fifth Circuit agreed. Under U.S. v. Fair, 979 F.2d 1037 (5th Cir. 1992), when a sentencing court adopts a PSR which recites facts showing limited or no ability to pay a fine, the government must come forward with evidence showing that a defendant can in fact pay a fine before one can be imposed. Here, the district court adopted the findings of the PSR, which indicated that defendant had a net worth of negative $61,349, and living expenses that exceeded the limited monthly income of his spouse. This clearly showed a limited ability to pay a fine, if not a total inability. Fair required the government to come forward with evidence to show defendant’s ability to pay a fine, which it did not do. U.S. v. Hodges, 110 F.3d 250 (5th Cir. 1997).
5th Circuit upholds fine where defendant present no evidence concerning ability to pay. (630) Defendant argued that his $1000 fine was out of proportion with the evidence presented. The Fifth Circuit upheld the fine since defendant did not present any evidence concerning his ability to pay. The defendant has the burden to present evidence of his inability to pay a fine. U.S. v. Leal, 74 F.3d 600 (5th Cir. 1996).
5th Circuit says ineffective assistance claim must relate to custody rather than fine. (630) Defendant argued, in a 28 U.S.C. § 2255 motion, that counsel’s failure to challenge a $30,000 fine constituted ineffective assistance. The 5th Circuit held that the claim was outside the scope of § 2255 because it did not relate to defendant’s custody. To prove ineffective assistance, a defendant must show both that counsel’s performance was deficient, and that defendant was thereby prejudiced. To meet the prejudice requirement in a § 2255 motion, the harm must relate to his custody. A claim that relates only to the imposition of a fine does not relate to a prisoner’s custody, and therefore is not within the scope of § 2255. U.S. v. Segler, 37 F.3d 1131 (5th Cir. 1994).
5th Circuit says court need not make express findings regarding fine factors. (630) Defendant argued, in a 28 U.S.C. § 2255 motion, that the district court erred in imposing a $30,000 fine without making specific finding regarding his ability to pay. The 5th Circuit found that even if his claim was cognizable in a § 2255 motion (which it doubted), the claim lacked merit. Although defendant correctly identified the various factors to be considered, a district court need not make express findings regarding those factors. U.S. v. Segler, 37 F.3d 1131 (5th Cir. 1994).
5th Circuit refuses to review challenge to $1000 fine raised for first time on appeal. (630) Defendant’s PSR noted that he had no assets and no income, but made no recommendation with respect to a fine. Defendant did not object to the PSR, and did not object at sentencing when the district court imposed a $1000 fine. The 5th Circuit refused to review the fine. Four factors are required to review a matter not raised below: (a) there must be error, (b) the error must be plain, (c) the error must affect substantial rights, and (d) the appellate court must exercise its discretion to review the matter. Even assuming plain error, defendant did not show his substantial rights were affected. Moreover, the fairness and integrity of the judicial system were not implicated by the imposition of a $1000 fine, a downward departure, payable over 92 months, upon a defendant who was in good health and had earned a living as a truck driver for nearly 14 years prior to his incarceration. U.S. v. Rodriguez, 15 F.3d 408 (5th Cir. 1994).
5th Circuit upholds departure from fine guideline range. (630) The district court departed upward from the guideline fine range and imposed a four million dollar fine. The 5th Circuit affirmed, using the same standard of review previously established for review of departures from imprisonment ranges. The district court based the departure on two grounds: first, the enhanced fine was necessary to ensure that defendant disgorged any gain from his criminal activities, and second, the enhanced fine was permitted by 18 U.S.C. § 3571(d) because defendant’s criminal acts resulted in pecuniary losses to other persons exceeding five million dollars. The district court’s findings that defendant derived at least two million dollars in gross gains and caused at least two million dollars in gross losses was not clearly erroneous. U.S. v. Wilder, 15 F.3d 1292 (5th Cir. 1994).
5th Circuit upholds implicit finding of ability to pay $10,000 fine. (630) The 5th Circuit found the district court’s implicit finding of ability to pay a $10,000 fine was not clearly erroneous. The court incorporated the PSR into the record, and the PSR expressly evaluated defendant’s financial condition and recommended a $10,000 restitution order. Defendant did not object, except to successfully argue for a reduction in net worth and to unsuccessfully challenge the inclusion of his wife’s income. The court ordered a fine but no restitution. Because its assessment was consistent with the PSR’s recommendation and fell within the applicable guideline range, express findings were not necessary. Defendant did not carry his burden of proving inability to pay the fine. U.S. v. Thomas, 13 F.3d 151 (5th Cir. 1994).
5th Circuit holds failure to advise defendant of maximum fine was harmless error. (630) Defendant argued that his guilty plea was invalid because the court erroneously advised him that he faced a maximum fine of $250,000, when in fact it was $1 million, and that the court failed to explain supervised release. The 5th Circuit found that any deficiencies concerning the correct maximum fine or supervised release were harmless error, since defendant’s knowledge of the correct information most likely did not affect his willingness to plead guilty. Defendant made two motions to withdraw his guilty plea, neither of which mentioned the fine or supervised release issues. The first mention of the fine and supervised release came in the appellate brief, filed by his third attorney. These appeared to be merely post hoc rationalizations for defendant’s second thoughts about his decision. U.S. v. Thomas, 13 F.3d 151 (5th Cir. 1994).
5th Circuit holds that inability to pay is not an absolute barrier to a fine. (630) The PSR suggested that defendant had no present or future ability to pay a fine, but made no recommendation regarding a fine. The court adopted the PSR’s findings, but then imposed a $50,000 probated fine. The 5th Circuit held that under the guidelines, inability to pay is not an absolute barrier to a fine. Although the explicit prohibition against imposing fines on indigents in section 5E1.2(a) has been in the guidelines since November 1990, section 5E1.2(f) and the application notes give a sentencing court discretion to impose a fine on an indigent defendant. However, the district court lacked authority to probate a fine. Because defendant committed a Class B felony, 18 U.S.C. section 3561(a) and section 5B1.1(b) prohibited a probated sentence. U.S. v. Altamirano, 11 F.3d 52 (5th Cir. 1993).
5th Circuit suggests that on remand district court give reasons for fine. (630) The PSR indicated that defendant had a negative net worth and a negative cash flow. Nonetheless, the district court imposed a $3,000 fine as a condition of probation. Since the case was being remanded for other reasons, the 5th Circuit did not review the decision to impose a fine. However, it suggested that on remand, if a fine was still imposed, the district court should give reasons for the fine. Although circuit caselaw does not require that a district court give reasons for imposing a fine in every case in which the PSR contains facts suggesting the defendant’s inability to pay, but does not recommend against a fine, the special circumstances of this case suggested that reasons would be appropriate and helpful in any subsequent appeal. U.S. v. Voda, 994 F.2d 149 (5th Cir. 1993)
5th Circuit says payment of restitution was not condition precedent to supervised release. (630) Defendant’s judgment required him to pay any unpaid restitution at the commencement of the term of supervised release. He argued that this unfairly conditioned his release upon pre-payment of these amounts. The 5th Circuit held that the payment of restitution was a condition subsequent, rather than a condition precedent of supervised release. If defendant should fail to pay the restitution by the time of his supervised release, all that the government could do would be to seek to enforce that order of restitution. If such collection efforts were fruitless, defendant’s supervised release still would not be revoked automatically. The Supreme Court has held that a defendant’s probation cannot be revoked without inquiring into the reasons for the failure to pay. Nothing in the statute or guidelines governing the revocation of supervised release suggests that they would be applied in violation of this principle. U.S. v. Payan, 992 F.2d 1387 (5th Cir. 1993).
5th Circuit holds that defendant may rely on PSR to show inability to pay fine. (630) The district court adopted the facts in defendant’s PSR, which concluded that defendant did not have any realistic ability to pay a fine. Nonetheless, the court imposed a $20,000 fine to cover the cost of incarceration. The 5th Circuit held that if a court adopts a PSR’s findings, but then decides to depart, specific findings are necessary. A defendant may rely on his PSR to establish his inability to pay a fine or the cost of incarceration. Moreover, it was a misapplication of the guideline to impose a cost of incarceration fine absent the imposition of a section 5E1.2(a) punitive fine. U.S. v. Fair, 979 F.2d 1037 (5th Cir. 1992).
5th Circuit rules wire fraud is not a continuing offense. (630) The district court imposed a $1 million fine under the Criminal Fine Enforcement Act of 1984, then codified at 18 U.S.C. section 3623. Section 3623 provided for a fine of $250,000 for any felony committed between January 1, 1985 and November 1, 1987, and $1,000 per count for any wire fraud offense committed before January 1, 1985. All six wire transfers for which defendant was convicted occurred in 1984. The 5th Circuit held that the $1 million fine violated the ex post facto clause, rejecting the government’s claim that although the actual fraudulent wire transfers for which defendant was convicted occurred in 1984, the scheme to defraud continued into 1985 and should be treated as a continuing offense. Each wire transmission in furtherance of a scheme to defraud constitutes a separate crime. It is not the scheme to defraud but the use of the mails or wire that constitutes mail or wire fraud. U.S. v. St. Gelais, 952 F.2d 90 (5th Cir. 1992).
5th Circuit rules amount of fine indicated court considered defendant’s ability to pay fine. (630) The 5th Circuit rejected defendant’s argument that the district court failed to consider his ability to pay a $280,000 fine. The fine imposed was only a fraction of the maximum statutory fine of $4 million, which, along with the fact that the court waived the requirement that defendant pay interest, implied that the court considered defendant’s ability to pay. Moreover, defendant had been convicted of importing over seven tons of marijuana into the United States. The court had reason to believe that defendant had access to funds exceeding those he voluntarily listed in his forma pauperis affidavit. U.S. v. Hagmann, 950 F.2d 175 (5th Cir. 1991).
5th Circuit upholds cost of imprisonment fine against constitutional and statutory challenges. (630) The 5th Circuit rejected defendant’s claim that the cost of imprisonment fine imposed under guideline section 5E1.2(i) was inconsistent with the purposes of sentencing under 18 U.S.C. section 3553(a)(2) and that it violated the due process clause. The court disagreed with defendant’s argument that the sentencing purposes set forth in section 3553(a)(2) were wholly realized by the fine table and that the additional fine under section 5E1.2(i) rendered defendant’s overall fine excessive. The fact that the fine is calculated by reference to the cost of imprisonment but the money collected is actually spent on unrelated functions did not render the fine irrational. U.S. v. Hagmann, 950 F.2d 175 (5th Cir. 1991).
5th Circuit holds additional fine under guideline section 5E1.2(i) need not fall within guideline range. (630) Defendant received two fines totaling $26,000. The first fine was an offense-based fine under guideline section 5E1.2(c)(1)(A) in the amount of $2,200, and the second was an additional fine of $23,800 under guideline section 5E1.2(i) to covers the costs of defendant’s incarceration and supervision. The 5th Circuit affirmed the fines, even though defendant’s guideline range for fines was $2,000 to 20,000. Defendant misunderstood the difference between the straight fine and the additional fine. The $2,200 fine was at the lower end of the guideline range. The additional fine, to cover the costs of supervision and incarceration, was mandatory unless defendant carried the burden of satisfying the court that assessment should be lowered or waived. U.S. v. Francies, 945 F.2d 851 (5th Cir. 1991).
5th Circuit upholds $20,000 fine despite defendant’s claim that he had net worth of $3,000 to $5,000. (630) The presentence report concluded that defendant had a net wealth of $478,000. Accordingly, the district court imposed a $20,000 fine, which was within the guideline range. Defendant contended that he only had a net worth of $3,000 to $5,000 and that he had commenced bankruptcy proceedings two weeks prior to trial. The 5th Circuit upheld the fine, rejecting defendant’s contention that the court only considered his financial statement. The record reflected that the court reviewed the evidence and elicited comments from defendant at the sentencing hearing on the status of the respective assets listed in the presentence report. It determined that there was sufficient equity in the assets to enable defendant to pay the fine currently. U.S. v. O’Banion, 943 F.2d 1422 (5th Cir. 1991).
5th Circuit rules court need not make explicit findings concerning defendant’s ability to pay fine. (630) Defendant was assessed a $10,000 fine. He argued that the district court failed to consider the guideline factors when assessing his fine, particularly his ability to pay. The 5th Circuit upheld the fine, finding the district court had adequately considered defendant’s ability to pay, and that it was not required to make explicit findings. The court adopted the presentence report, which revealed that defendant’s only assets were valued at less than $1000, and that he was currently unemployed, had no dependents and lived with his mother, who supported him. “Where the presentence report makes no recommendation concerning the fine, and the defendant neither presents evidence on nor objects to the amount of the fine assessed within the guideline range, the defendant may not raise new objections absent plain error.” Defendant had an extensive education and lived at home with minimal financial obligations. Thus, the record supported the fine imposed. U.S. v. Matovsky, 935 F.2d 719 (5th Cir. 1991).
5th Circuit reverses order requiring defendant to pay costs of his incarceration. (630) Defendant argued that the trial judge improperly ordered him to pay $1220 per month to cover the costs of his incarceration, despite the recommendation of the presentence report that such costs not be imposed. The 5th Circuit agreed, finding no support for the proposition that defendant and his family would not be unduly burdened if required to cover the cost of his incarceration. The only income during defendant’s incarceration was his wife’s salary, which would not cover their necessary living expenses, let alone the cost of defendant’s incarceration. If the family sold all of their assets, or were to use their assets as collateral, they could cover the incarceration for a little over a year, while defendant was sentenced to three years’ imprisonment. U.S. v. Pattan, 931 F.2d 1035 (5th Cir. 1991).
5th Circuit remands for district court to recalculate defendant’s fine. (630) Defendant concealed from the bankruptcy court his receipt of $175,000. When caught, defendant was able to return all but $68,500 of the funds. In calculating defendant’s fine under guideline § 5E4.2, the district court included the $68,500 as the amount of defendant’s pecuniary gain from the commission of the offense. The 5th Circuit noted that the bankruptcy court had not yet determined whether the original $175,000 was part of the bankruptcy estate. If the money was not part of the bankruptcy estate, then the funds belonged to defendant and defendant gained nothing by concealing his own money. The case was remanded to the district court for recalculation of the fine either from the fine table in effect at the time of defendant’s sentencing or based on defendant’s pecuniary gain once the bankruptcy court determined the ownership status of the funds. U.S. v. Beard, 913 F.2d 193 (5th Cir. 1990).
5th Circuit rules that wealth of defendant’s family can be used to determine amount of a fine. (630) The district court imposed a $50,000 fine on defendant, determining in part that he had the ability to repay because of his family’s wealth. The 5th Circuit affirmed, holding that the guidelines do not preclude consideration of the wealth of the defendant’s family in determining defendant’s ability to pay a fine. Because defendant’s family had paid many of defendant’s expenses, the district court properly considered their wealth in determining the amount of the fine. U.S. v. Fabregat, 902 F.2d 331 (5th Cir. 1990).
6th Circuit upholds million dollar fine that was eight times the maximum guideline amount. (630) Defendant was convicted of conspiracy to commit insider trading and related charges. He argued that the $1,000,000 fine, which was eight times the maximum guideline amount, was unreasonable. The Sixth Circuit held that the district court did not abuse its discretion or commit plain error in imposing a $1,000,000 fine. Note 4 to § 5E1.2 says that an upward departure may be warranted where two times the amount of loss resulting from the offense exceeds the maximum guideline fine. Here, the resulting loss was $908,000, and this exceeded twice the maximum recommended fine ($125,000). Moreover, the amount the court departed upward was perfectly reasonable, since it accounted for the estimated loss resulting from defendant’s conduct. Next, 18 U.S.C. § 3572(a) permits a district court to consider a defendant’s financial resources in assessing fines. Finally, the fine was not disproportionate to the gravity of the offense since it was equal to the loss caused by the offense. U.S. v. Blackwell, 459 F.3d 739 (6th Cir. 2006).
6th Circuit reverses fine where record did not show court considered financial impact of restitution. (630) Defendant was convicted of fraud, embezzlement and money laundering charges stemming from her scheme to overcharge the federal government for serving meals to economically disadvantaged children. At trial, the government estimated that defendant’s non-profit corporation received between $13.5 and $15.5 million more than it was entitled to during the scheme. The judgment against defendant included a restitution award of $13.5 million and a fine of $10 million. After affirming the restitution, the Sixth Circuit reversed the $10 million fine, since the record did not reflect whether the district court considered the financial impact of the restitution. If a defendant has the obligation to make restitution to a victim, the court shall impose a fine only to the extent that such a fine will not impair the ability of the defendant to make restitution. 18 U.S.C. § 3572(b). The $13.5 million in restitution represented what defendant received, but it was unclear how the district court found that defendant could pay an additional fine of $10 million. U.S. v. Jackson-Randolph, 282 F.3d 369 (6th Cir. 2002).
6th Circuit upholds finding that defendant had ability to pay fine and costs. (630) Conflicting evidence was presented regarding defendant’s financial status. Prior to sentencing, defendant filed a motion seeking trial transcripts at public expense. The October 1998 affidavit he filed in support of the motion showed much lower income and asset value than the affidavit he filed a year earlier in support of a request for appointed counsel. Moreover, during the previous year, defendant bought a $75,000 house, making a $15,000 cash downpayment. His January 1998 mortgage application showed a substantially higher income and greater assets than either affidavit. Defendant stated that his Land Cruiser had been repossessed prior to the October 1998 affidavit, and this accounted for the different between the value of his assets. However, at sentencing, the government presented evidence that defendant’s Land Cruiser was still in his name and that between August 1998 and March 1999, over $4500 in monthly payments were made on the car. The Sixth Circuit held that the district court did not abuse its discretion in determining that defendant had the ability to pay a $12,500 fine and the costs of incarceration. The court’s decision was based on the finding that the vehicle had not been repossessed, and the existence of some assets that were being used to pay for the car. Defendant did not meet his burden of proving that he was unable to pay the guideline fine. U.S. v. Ukomadu, 236 F.3d 333 (6th Cir. 2001).
6th Circuit upholds validity of § 5E1.2(i) cost of imprisonment fines. (630) Defendant argued for the first time on appeal that § 5E1.2(i), imposing a fine to cover the cost of imprisonment and supervised release, was invalid. The Sixth Circuit found that defendant’s challenge to her § 5E1.2(i) fine was not waived because it was not convinced defendant had been given the opportunity to object to the fine at sentencing. Defendant’s PSR did not recommend a fine for costs of confinement and the government did not object to the absence of such a recommendation. Defendant also contended that the first time such a fine was mentioned was when the court imposed judgment. However, the court rejected defendant’s challenge on the merits. The Sentencing Commission did not act outside its authority in promulgating § 5E1.2(i). U.S. v. Breeding, 109 F.3d 308 (6th Cir. 1997).
6th Circuit holds that fine does not meet “in custody” requirement of § 2255 motion. (630) In a motion to vacate his sentence under 28 U.S.C. § 2255, petitioner argued that the district court erred in imposing a § 5E1.2(i) cost of imprisonment fine. The Sixth Circuit held that petitioner was barred from raising his challenge in a § 2255 motion because a monetary fine does not meet § 2255’s “in custody” requirement. Section 2255 is only available to prisoners who claim a right to be released from custody. Moreover, petitioner failed to establish cause or prejudice for his failure to raise this issue before the trial court. U.S. v. Watroba, 56 F.3d 28 (6th Cir. 1995).
6th Circuit says volume of commerce in price-fixing case includes all sales regardless of targeted price. (630) Defendants, an oil company and its president, conspired with other dealers to control retail gasoline prices in one town over a four-year period. Because of dealer cheating and other factors, the conspiracy was only partially effective. Section 2R1.1 bases a conspirator’s fine on the “volume of commerce,” which is defined as the conspirator’s volume of commerce that was “affected” by the anti-trust violation. The district court interpreted “volume of commerce” to include only the sales made by defendant when the conspirators successfully achieved their target prices. The Sixth Circuit disagreed, holding that the volume of commerce includes all sales made by the defendant during the conspiracy, regardless of the target price. It would be anomalous to make price-fixing illegal per se, but to provide for a fine only if it is successful. This interpretation is also supported by the Sentencing Commission’s commentary to §2R1.1. U.S. v. Hayter Oil Co. of Greeneville, Tenn., 51 F.3d 1265 (6th Cir. 1995).
6th Circuit approves $6,000 fine based on future ability to pay. (630) Defendant challenged a $6,000 fine, arguing he was currently indigent and could not pay a fine. The Sixth Circuit approved the fine based on defendant’s future ability to pay. Although defendant might not have resources today, he was owed substantial amounts of money and had investments in business equipment that made it likely he would be able to pay a fine in the future. U.S. v. Griggs, 47 F.3d 827 (6th Cir. 1995).
6th Circuit upholds cost of imprisonment fine where objection not raised below. (630) Defendant challenged a $108,356 fine under § 5E1.2(i) to cover the costs of his imprisonment. The 6th Circuit upheld the fine. The court refused to consider whether § 5E1.2(i) was invalid, since defendant did not raise this objection below. Defendant did not show he was incapable of paying the fine. Although the fine would create a financial strain for him and his family, the actual fine imposed should be sufficient to ensure that the fine, taken with other sanctions imposed, is punitive. U.S. v. Blandford, 33 F.3d 685 (6th Cir. 1994).
6th Circuit says defendant did not support claim of indigence. (630) Defendant argued that he was indigent, and therefore the district court should not have imposed a $10,000 fine. The 6th Circuit affirmed. The fine range was $12,000 to $2 million. The trial court departed downward because it understood that defendant might not be able to pay more. The record showed that defendant either had purchased or held a variety of assets. Defendant did not support his claim of indigency. U.S. v. DeFranco, 30 F.3d 664 (6th Cir. 1994).
6th Circuit upholds $5000 fine where defendant did not raise issue of ability to pay. (630) Defendant argued that the district court did not consider his ability to pay before imposing a $5000 fine. He noted that counsel had been appointed for him and the record did not reflect whether he had the financial resources to pay a fine. The 6th Circuit held that defendant did not meet his burden of proving an inability to pay a fine. Neither defendant nor his counsel raised the issue of his ability to pay in the court below. U.S. v. Wilson, 27 F.3d 1126 (6th Cir. 1994).
6th Circuit upholds refusal to waive fine despite PSR’s statement of inability to pay. (630) Defendant argued that the district court erred in imposing a $5,000 fine since the PSR concluded that he did not have the ability to pay a fine. The 6th Circuit found no error. Defendant bore the burden of showing he was unable to pay a fine. The PSR made no findings regarding defendant’s inability to pay in the future, and defendant presented no evidence showing he was unlikely to become able to pay the fine. U.S. v. Vincent, 20 F.3d 229 (6th Cir. 1994).
6th Circuit holds that PSR did not establish defendant could not pay $7500 fine. (630) Although the PSR noted that defendant had no income or assets and did not appear able to pay a fine, the district court imposed a $7500 fine. The 6th Circuit held that defendant did not meet his burden of proving an inability to pay the fine. The PSR made no conclusions about defendant’s future ability to pay a fine. Thus, defendant’s contention that the PSR’s findings satisfied his burden was without merit. The record established that even though defendant had no assets or present earnings, he could make installment payments from prisoner pay earned under the Inmate Financial Responsibility Program. U.S. v. Tosca, 18 F.3d 1352 (6th Cir. 1994).
6th Circuit finds defendant able to pay fine even though he qualified for appointed counsel. (630) The 6th Circuit held that defendant did not meet his burden to prove he was unable to pay a fine under section 5E1.2, even though he was found indigent for purposes of the appointment of counsel. The standard for requiring the defendant to pay counsel out of his funds is different from the standard for imposing fines. Section 5E1.2 puts the burden on the defendant to show not only that he cannot presently pay the fine but that he is not likely to become able to pay it. The presentence report concluded that defendant was not then able to pay a fine, but it made no conclusion regarding defendant’s future ability to pay. Therefore, when defendant presented no proof on the likelihood of regaining his earning capacity, the district court had a duty to impose a fine. U.S. v. Blanchard, 9 F.3d 22 (6th Cir. 1993).
6th Circuit directs district court to reconsider fine for each violation of Clean Water Act. (630) Defendant was convicted of 18 counts of violating the Clear Water Act. In addition to other punishment, the district court imposed a fine in the amount of $90,000 on defendant, or $5,000 per violation. The case was remanded for resentencing on other grounds. In so doing, the 6th Circuit suggested the district court reconsider whether to fine defendant on all 18 counts of conviction. In setting the fine, the district court was acting under the erroneous impression that the $5,000 per violation was a mandatory minimum. While the total amount of the fine was technically proper, and while the guidelines state that some fine shall be imposed in all cases, the statute under which defendant was sentenced does not require a fine for each violation. Rather, 33 U.S.C. § 1319(c)(2) gives the sentencing court the option of imposing a fine or imprisonment, or both. U.S. v. Rutana, 932 F.2d 1155 (6th Cir. 1991).
6th Circuit upholds community service imposed on defendant unable to pay fine. (630) The 6th Circuit rejected the government’s contention that the district court’s decision not to fine defendant was improper. The reason the district court did not impose a fine was because it expressly found that defendant was not able to pay a fine. Under guideline § 5E1.2(f), if a defendant establishes that he cannot pay a fine, a district court may waive the fine and impose an additional sanction such as community service. In this case, defendant was required to provide 100 hours of community service. U.S. v. Nelson, 918 F.2d 1268 (6th Cir. 1990).
6th Circuit upholds district court’s use of seized funds to pay costs of prosecution and special assessment. (630) Upon defendant’s arrest on various drug charges, police seized some personal property and cash. After defendant was convicted, the district court ordered all items not introduced as evidence to be released, except $397.25 cash. $380 was applied toward the costs of investigation and prosecution and the balance was applied toward the special assessment. The 6th Circuit found that the district court had properly balanced the competing equities in deciding whether to return the property. A defendant’s right to the return of lawfully seized property is subject to the government’s continuing interest in the property. In this case, the government had an interest in insuring that the monetary penalties imposed as part of defendant’s sentence were paid. Moreover, the record indicated that some of the money seized was the proceeds of an illegal drug sale. In addition, by applying the cash to the sentence imposed, the district court essentially allocated the defendant’s property for his benefit, rather than depriving him of the property altogether. U.S. v. Duncan, 918 F.2d 647 (6th Cir. 1990).
6th Circuit reverses district court’s failure to impose fine. (630) The district court refused to impose a fine on defendant, concluding that he was “unable to pay a large fine.” Reviewing this factual finding under the clearly erroneous standard, the 6th Circuit reversed. The guidelines place on a defendant the burden of proving an inability to pay a fine. Defendant presented no proof to the district court that he was unable to pay a fine. Uncontested evidence showed that defendant’s net worth was $250,500, of which $200,000 was the proceeds of a spendthrift trust. The minimum fine for a person with defendant’s offense was $15,000. Therefore, the district court’s finding was clearly erroneous. U.S. v. Hickey, 917 F.2d 901 (6th Cir. 1990).
7th Circuit remands where court mistakenly believed defendant was subject to mandatory minimum fine. (630) In explaining its decision to impose a $300 fine for each of defendant’s three drug counts, the court explained that there was “a mandatory minimum fine [of] $300 on each count.” It also explained that the payment was owed immediately. The parties agreed on appeal that defendant’s convictions carried no mandatory minimum fine amounts. The Seventh Circuit held that the court erred in stating that defendant was subject to a mandatory minimum fine. Although defendant faced an advisory guideline fine range of $20,000 to $80,000, the PSR concluded that defendant did not “have the ability to pay a fine within the guideline range nor did he have the ability to pay a fine immediately.” Defendant’s inability to pay permitted the district court to not impose a fine at all. The court’s mistake of law implicated defendant’s substantial rights because it dictated the outcome of his sentence – the court viewed itself as obligated to impose the fines. The panel remanded for the court to correct the mistake. U.S. v. Brown, 662 F.3d 457 (7th Cir. 2011).
7th Circuit says participation in Inmate Responsibility Program is voluntary. (630) At sentencing, the district court imposed a fine of $500 “to be paid from prison earnings and thereafter . . . at the rate of 10% of [defendant’s] net earnings per month.” The judgment stated that defendant was “to begin making payments toward the fine imposed through Inmate Responsibility Program earnings.” The Seventh Circuit held that mandating payment from the Inmate Responsibility Program was clear error because participation in the IFRP is voluntary. The government conceded as much. Accordingly, the Seventh Circuit modified the district court’s sentence to clarify that defendant’s participation in the IFRP was voluntary. U.S. v. Munoz, 610 F.3d 989 (7th Cir. 2010).
7th Circuit holds that statutory maximum fine was reasonable where defendant’s obstruction obscured extent of fraud offense. (630) Defendant, an orthodontist, was convicted of mail fraud and obstruction of justice based on fraudulent claims he submitted to state and federal authorities for services rendered to wards of the state of Illinois. The obstruction count was based on his destruction of case files and documents that had been subpoenaed in the case. The suggested guideline fine was $4,000-$40,000, § 5E1.2(c)(3). However, the district court imposed the statutory maximum of $250,000 per offense, or $500,000. The Seventh Circuit held that the statutory maximum fine was not unreasonable. The court found that defendant had bilked the taxpayers “out of a tremendous amount of money,” and that the doubt regarding the extent of the fraud existed in part because of defendant’s actions. The court was concerned that defendant may have benefited from the obstruction, noting that he was “well-to-do” with a net worth of $2.3 million. The court further found that a fine within the guideline range “would not adequately reflect the seriousness of the offense or provide just punishment for the offense.” The judge noted that the offense was non-violent, and chose not to increase the term of imprisonment, but opted instead to increase the fine, “punishing the perpetrator with a correlate of his own crime.” U.S. v. Rinaldi, 461 F.3d 922 (7th Cir. 2006).
7th Circuit holds that adding fine caps from two different counts was permissible. (630) The money laundering statute, 18 U.S.C. § 1957(b)(2), authorizes a fine “of no more than twice the amount of the criminal derived property involved in the transaction.” One of defendant’s counts involved conspiring to launder $280,070 in proceeds, and another entailed the substantive offense of laundering $250,000. Doubling these produced a statutory maximum high enough to authorized the one million dollar fine. Defendant argued that adding the caps from the two counts was a form of double counting, but the Seventh Circuit disagreed. Defendant did not contend that the counts were multiplicitous or that cumulative punishment was improper under Blockburger v. U.S., 284 U.S. 299 (1932). Conspiracy and the completed offense are separate crimes. The fact that all money laundering counts were grouped under § 3D1.1 was irrelevant. The grouping rules did not constrain defendant’s fine. Both the statutes and the guidelines authorized the judge to proceed as she did. U.S. v. Tedder, 403 F.3d 836 (7th Cir. 2005).
7th Circuit upholds modest fine to be paid from future prison earnings. (630) The district court ordered defendant to pay a $2000 fine, to be paid from the Inmate Financial Responsibility Program. The PSR, which the sentencing court adopted, found that he had no present ability to pay a fine either in a lump sum or on an installment basis. Defendant argued that the court’s adoption of the PSR’s findings was irreconcilable with its finding that a fine was appropriate. The Seventh Circuit upheld the fine. A finding that defendant is currently unable to pay a guideline fine does not logically preclude a finding that he could afford a substantially lower fine, especially one based on future earnings over the course of his prison term and supervised release. Based on the PSR’s findings of defendant’s financial condition, the sentencing court departed downward substantially from the guideline range, ordered that defendant pay the fine through the IFRP, and waived interest on the fine and the costs of incarceration and supervision. There was no plain error. U.S. v. Isienyi, 207 F.3d 390 (7th Cir. 2000).
7th Circuit holds that court properly considered statutory matters before imposing fine. (630) Defendant claimed that the district court did not properly consider his ability to pay a $15,000 fine. The Seventh Circuit found no error. The district court spent considerable time properly considering the relevant factors. The court reviewed the PSR’s factual findings, questioned defendant concerning his current financial situation, and then asked defendant and his attorney to meet over lunch with the probation officer who prepared the PSR in order to provide to the court “a little detail about where all this money went in the last six years.” After the meeting, the court reviewed the material and questioned defendant further concerning the estimated unpaid taxes and life insurance. He noted the high cost of living in New York and the costs involved in schools for his daughters. The court then determined that $15,000 was an appropriate fine within the range of $4-40,000 for defendant’s offense level. Thus, the district court gave defendant the opportunity to prove his inability to pay a fine. It carefully reviewed defendant’s claim of insolvency during the sentencing hearing before rejecting it. Defendant provided no grounds for re-evaluating the district court’s decision on this matter. U.S. v. Gellene, 182 F.3d 578 (7th Cir. 1999).
7th Circuit says adding 47 months as punishment for not paying fine did not violate double jeopardy. (630) The district court held defendant in civil contempt after he failed to make any payments on his criminal fine. The district court ordered him into custody, and his original 188-month prison sentence was tolled until he purged the contempt order. Two years later, the judge found that defendant had transferred his interest in certain real estate in violation of the contempt order, and that the transaction was a sham to avoid paying the fine. At the government’s request, the court added 47 months to defendant’s sentence under 18 U.S.C. § 3614, which allows a court to increase the sentence (up to the previous maximum) of any defendant who knowingly fails to pay a delinquent fine. The court also ordered the contempt incarceration to continue. The Seventh Circuit held that the resentencing did not violate the double jeopardy clause. The contempt order was coercive rather than punitive and therefore was not a criminal penalty. If there was no reasonably possibility that defendant would ever comply, then the order might be considered punitive. Here, the contempt order might still secure defendant’s compliance because in reinstating the order, the court altered its terms to allow defendant to purge it by making a good faith effort to help the government secure the real estate. U.S. v. Lippitt, 180 F.3d 873 (7th Cir. 1999).
7th Circuit holds that “costs of prosecution” under Internal Revenue Code does not include jury fees. (630) Defendant was convicted of Medicare fraud, tax fraud and related crimes. The district court ordered, as required by the Internal Revenue Code, that defendant pay “the costs of prosecution” of the tax offenses of which she was convicted. 26 U.S.C. §§ 7202 and 7206. The district court included in this the jury fees, which exceeded $9000. The Seventh Circuit held that the term “costs of prosecution” refers to costs under § 1920 of the Judicial Code incurred by the government in successfully prosecuting a criminal defendant. The list of six items in § 1920 does not include jury fees. Thus, the district court erred in ordering defendant to pay jury fees. U.S. v. Stefonek, 179 F.3d 1030 (7th Cir. 1999).
7th Circuit affirms $20,000 fine even though PSR recommended against it. (630) Defendant was convicted of drug conspiracy charges. The Seventh Circuit upheld a $20,000 fine, even though the PSR concluded that defendant was unable to pay a fine. When a district court adopts the PSR’s fact finding but deviates from its fine recommendation, it must articulate why it chooses this route. Here the judge took detailed stock of defendant’s assets and liabilities. The court noted that the PSR found total assets of $105,350 in defendant’s name. The court addressed defendant’s supposed inability to pay the fine, and subtracted $44,700 in recently imposed liens from the $105,350, leaving around $60,000 in assets remaining. Based on this finding, the court did not clearly err in imposing a $20,000 fine. U.S. v. Hach, 162 F.3d 937 (7th Cir. 1998).
7th Circuit vacates fine where court let probation office decide timing of payments. (630) Defendant was convicted of firearms charges and sentenced to 235 months in prison, 3 years supervised release and a $5,000 fine. The Seventh Circuit vacated the fine because the district court erroneously gave the probation office discretion to determine the frequency and timing of installment payments of the fine. Such an order cannot be delegated to administrative staff. The district court itself must set the payment schedule for fines and restitution. U.S. v. Arellano, 137 F.3d 982 (7th Cir. 1998).
7th Circuit rejects need for specific findings on each relevant fine factor. (630) Defendant pled guilty to firearm, robbery and related counts. He argued that the district court failed to make the findings required by § 5E1.2(d) before imposing a $175,000 fine. The Seventh Circuit rejected the need for express or specific findings regarding each of the relevant factors before imposing a fine. Express findings are not mandated by either the guidelines or by statute. The focus is on whether the court has properly considered the necessary factors. Although express findings as to each factor are helpful, a record can show that appropriate consideration took place despite the lack of specific findings on each factor. The district court need only consider the relevant factors and provide “a reasoned and reviewable basis” for the its decision to impose a fine. Here, the record established that even without express findings, the court carefully considered the seven factors listed in § 5E1.2(d). The court satisfied its duties by adopting the PSR and the Supplement to the PSR and making express findings regarding defendant’s ability to pay the fine. U.S. v. Bauer, 129 F.3d 962 (7th Cir. 1997).
7th Circuit refuses to refund fines and assessments defendant paid before his death. (630) Defendant was convicted of numerous racketeering charges. He appealed, and after his appeal had been fully briefed, defendant died. The Seventh Circuit remanded the case and directed the court to vacate defendant’s convictions. Before he died, defendant had paid a $50,000 fine, $450 in special assessments, and $9,115 to cover the government’s costs of prosecuting him. He also paid $137,500 to cover his share of a stipulated criminal forfeiture. The Seventh Circuit rejected defense counsel’s claim that all monies paid before defendant’s death should be refunded to his estate. The fine and assessments served to deprive defendant of some of his resources during his lifetime. They were analogous to time served and were not refundable. The costs of prosecution served both to deprive defendant of some of his illegal profits during his lifetime and compensate the government as the victim of is tax offenses. The criminal forfeiture also was not refundable. Like the fine and assessments, it served to strip away a small fraction of the millions of dollars defendant raked in from his illegal activities. U.S. v. Zizzo, 120 F.3d 1338 (7th Cir. 1997).
7th Circuit remands for court to clarify reasons for imposing $15,000 fine. (630) Defendant challenged a $15,000 fine, arguing that the court ignored evidence that he was indigent. The PSR stated that defendant did not appear to have the financial ability to pay a fine within the guideline range, but that he could pay a fine below the guideline range in installment payments. The government recommended no fine because defendant had agreed to forfeit substantially all of his assets. The court said it would “accept the recommendation of the presentence report and impose a fine of $15,000, which is the minimum fine.” The Seventh Circuit remanded for the court to clarify its reasons for the $15,000 fine. The court’s statements were inconsistent with the PSR’s recommendation that defendant receive a fine below the guideline range, to be made in installments after his release. Although a court may discharge its duty by adopting the findings of the PSR, such blanket statements are insufficient where the evidence indicates the court neglected to make the required factual findings. U.S. v. Monem, 104 F.3d 905 (7th Cir. 1997).
7th Circuit upholds $50,000 fine where defendant sheltered significant sources of income. (630) Defendant challenged a $50,000 fine, since he was 63 years old, serving a 20‑year state sentence, and a “substantial portion” of his assets were seized by the federal government and forfeited. The Seventh Circuit affirmed the fine, although the matter was “close.” The district court believed that defendant was responsible for sheltering significant sources of income, and that it was within his power to undo that which he had done. For example, defendant transferred his unencumbered title in an airplane worth $20‑ 30,000 to another individual following his arrest. The other individual had agreed not to sell the plane pending resolution of defendant’s case, and the government was prepared to seek to void the transfer so that the equity in the plane would be available for the fine. Also, defendant purchased more than $15,000 in savings bonds which had not been redeemed. Finally, defendant had transferred to his girlfriend title to certain real property with an equity of more than $85,000. The court also mentioned two or three other potential sources of income. U.S. v. Gabel, 85 F.3d 1217 (7th Cir. 1996).
7th Circuit bases fine on property titled in defendant’s daughter’s name. (630) In imposing a $100,000 fine, the district court considered defendant’s “significant interest” in various real estate holdings titled in the name of his putative common-law wife and his daughter. The Seventh Circuit upheld the court’s consideration of the property even though others held legal title to it. Defendant acknowledged buying and selling properties over the years and helping his family manage their properties and collect rental income. He also had been recorded telling an undercover agent that he “flipped” his drug profits into real estate, and that he had 150 properties titled in the names of his 33 children and nine different women. Ownership of property is not always a function of title. Defendant pointed to no evidence undermining the court’s conclusion that he retained a concrete, if not formal, interest in the properties. U.S. v. Granado, 72 F.3d 1287 (7th Cir. 1995).
7th Circuit upholds $10,000 fine where defendant refused to provide financial data. (630) Defendant argued that the district court erred in imposing a $10,000 fine because there was no evidence that he had the ability to pay. The Seventh Circuit affirmed the fine, since defendant failed to meet his burden of proof by refusing to provide any financial data to the probation department. The district court ordered the fine paid through the Inmate Financial Responsibility Program, with the remainder paid in $100 per month installments during the period of supervised release. Moreover, the fine imposed was below the minimum set forth in the fine table. An appellate court lacks jurisdiction to review the extent of a district court’s departure below the minimum fine amount authorized by the guidelines. U.S. v. Young, 66 F.3d 830 (7th Cir. 1995).
7th Circuit remands because court delegated payment schedule for fine and restitution. (630) Defendant argued, and the government conceded, that the district court erred in delegating to the probation office the establishment of a payment schedule for the fine and restitution. The Seventh Circuit agreed, and remanded with directions for the district court to set the payment schedule. U.S. v. Yahne, 64 F.3d 1091 (7th Cir. 1995).
7th Circuit upholds garnishment of prison wages to pay guidelines fine. (630) Defendants challenged the court’s order that their fines be paid out of their prison wages, contending that it caused an unwarranted disparity between prisoners who were assigned jobs with different compensation levels. The Seventh Circuit rejected this “novel” argument because the Sentencing Reform Act charges sentencing courts with responsibility to avoid sentencing disparities, not sentencing impact disparities. Differentials in prison wages are unavoidable, just as they are in everyday life. The fine was not improper simply because the installment period exceeded the suggested 12-month limit in § 5E1.2(g). The court did not impermissibly delegate the timing of the payments and amount of the fines to the Bureau of Prisons. The timing of the payments was clearly specified in the court order. Payments were to be made when the monthly wages exceed the specified minimums. The amounts to be paid were similarly unambiguous. U.S. v. Sanchez-Estrada, 62 F.3d 981 (7th Cir. 1995).
7th Circuit lacks jurisdiction to review extent of downward departure from guideline fine range. (630) Defendant challenged a $15,000 fine based on his limited financial resources and earning capacity. Section 5E1.2(c)(3) called for a minimum fine of $25,000. The Seventh Circuit held that it had no authority to review defendant’s claim that the court’s departure from the minimum fine was not enough. The district court found that while defendant could not pay the $25,000 minimum, he could pay a $15,000 fine from prison earnings or while on supervised release. Prison wages are available to pay fines. The extent of any departure from the minimum fine set by § 5E1.2(c)(3) is committed to the discretion of the district court. U.S. v. Gibbs, 61 F.3d 536 (7th Cir. 1995).
7th Circuit upholds $1000 fine to be paid through participation in Inmate Financial Responsibility Program. (630) Defendant argued for the first time on appeal that he was unable to pay a $1000 fine, as evidenced by the fact that he was represented by appointed counsel. The Seventh Circuit found no error because the fine was to be paid through defendant’s participation in the Inmate Financial Responsibility Program. A district court may consider an indigent defendant’s ability to earn money under this program. U.S. v. Burrows, 48 F.3d 1011 (7th Cir. 1995).
7th Circuit approves fine based on large profits from marijuana trafficking. (630) Defendant claimed he was unable to pay a $500,000 fine. The Seventh Circuit approved the fine, based on the judge’s findings that defendant made very large profits on his marijuana trafficking. The government recovered very little of this, leading the judge to conclude that defendant had probably “squirreled away” much of his profits. Although defendant claimed there was no evidence that he could pay the fine, the only question was whether defendant met his burden of proving that he lacked the ability to pay. He did not meet this burden. U.S. v. Mustread, 42 F.3d 1097 (7th Cir. 1994).
7th Circuit holds that court satisfied requirements for pre- and post-guideline fines. (630) Defendant challenged a $185,000 fine. $125,000 related to post-guidelines counts, the other $60,000 related to pre-guidelines counts. The 7th Circuit upheld the fine. The district court explicitly adopted the findings contained the PSR at sentencing. The PSR discussed at length defendant’s ability to pay the fine in terms of his financial resources, financial obligations, and the needs of his dependents for financial support. This consideration and analysis were more than sufficient to support the fines. U.S. v. Morgano, 39 F.3d 1358 (7th Cir. 1994).
7th Circuit says court may consider money defendant would earn in prison as basis for fine. (630) Defendant challenged a $6,191 fine. Defense counsel concluded that the argument was groundless and sought to withdraw from appellate representation. The 7th Circuit agreed that there were no valid grounds for appeal, and granted counsel’s motion. The fine was reasonable. The district court considered defendant’s ability to pay and limited the fine to a portion of the income he might earn in prison to be paid in monthly installments. Moreover, payment of the fine was only required while defendant was in custody, and to the extent of his ability to pay. U.S. v. Garcia, 35 F.3d 1125 (7th Cir. 1994).
7th Circuit holds that prison wages are available to satisfy fine. (630) Defendants each had a minimum guideline fine of $10,000. The district court departed downward based on defendants’ indigency and imposed $3,000 fines, to be paid from prison earnings. The 7th Circuit held that prison wages are available to satisfy fines. Regulations of the Bureau of Prisons permit prisoners to keep half of their wages no matter what their obligations; the other half, however, is available for alimony, civil debts, and fines. The appellate court stated that it had no authority to inquire into the precise amount of the fine, since the extent of a downward departure is committed to the district court’s discretion. U.S. v. Gomez, 24 F.3d 924 (7th Cir. 1994).
7th Circuit says adoption of PSR did not satisfy obligation to make findings to support fine. (630) Under circuit caselaw, before imposing a fine, the district court must make specific findings with respect to the factors listed in 18 U.S.C. § 3572(a). The 7th Circuit concluded that the district court’s adoption of defendant’s PSR did not satisfy its obligation to make such findings. In cases where the adoption of the PSR was found to satisfy the duty to make factual findings, the district court only adopted the findings on a particular issue, and referred to a discrete section of the report. Here, in contrast, the district court never discussed the issue of concern, the appropriateness of the fine, and never mentioned the report’s analysis of defendant’s financial condition. Moreover, the court arguably did not adopt that analysis, for defendant objected to it, and the court expressly adopted only those factual statements to which there were no objections. U.S. v. Vargas, 16 F.3d 155 (7th Cir. 1994).
7th Circuit holds that court made adequate findings before imposing $250,000 fine. (630) The 7th Circuit held that the district court made adequate findings before levying a $250,000 fine. Defendant’s presentence report discussed his financial situation at length and his ability to pay the fine. At the sentencing hearing, the district court adopted the report’s factual statements. The court also heard additional evidence about defendant’s ability to pay a fine. The court clearly considered defendant’s ability to pay, including his earning capacity, as required by statute and by section 5E1.2(d)(2). The court also considered the government’s position that the court should fine defendant severely in order to limit his ability to hire another hit man to kill his nephew or anyone else. Defendant did not meet the burden of showing he could not pay the fine. U.S. v. Levine, 5 F.3d 1100 (7th Cir. 1993).
7th Circuit outlines method for considering defendant’s ability to pay a fine. (630) Defendant argued that when a court declines to impose any fine under §5E1.2(c), it cannot impose an additional fine under §5E1.2(i) to cover the costs of confinement. In response, the 7th Circuit outlined the method for determining defendant’s financial ability to pay a fine. First, the court must fix an appropriate fine using the table in §5E1.2(c). Second, the court must determine under §5E1.2(i) the additional fine amount to pay the costs of custody. Third, the court must inquire whether the defendant can pay the sum of the amounts determined under §5E1.2(c) and (i). If the court concludes that defendant cannot pay anything, even in installments, it may decline to impose any fine. One implication of this approach is that if a defendant lacks the ability to pay a fine under §5E1.2(c), then no “additional” fine may be imposed under §5E1.2(i). U.S. v. Turner, 998 F.2d 534 (7th Cir. 1993).
7th Circuit upholds validity of cost of incarceration fine under §5E1.2(i). (630) Rejecting the 3rd Circuit’s decision in U.S. v. Spiropoulos, 976 F.2d 133 (3rd Cir. 1992), the 7th Circuit upheld the validity of §5E1.2(i), which authorizes a fine to cover the cost of a defendant’s confinement. Measuring a fine by the costs of confinement meets a statutory objective of sentencing: deterrence. Moreover, a fine based on these costs reflects the seriousness of the crime, since the costs of confinement rise with the seriousness of the crime. The fact that the money collected actually goes to victims rather than the Bureau of Prisons is irrelevant, since the function of the fine is deterrence. U.S. v. Turner, 998 F.2d 534 (7th Cir. 1993).
7th Circuit holds that court may impose imprisonment or fine for contempt, but not both. (630) The criminal contempt statute, 18 U.S.C section 401, provides for either a fine or imprisonment. Guideline section 5E1.2(a) requires a fine in all cases unless the defendant is unable to pay. Defendant argued that because a fine is required under the guidelines, and because the contempt statute does not allow the imposition of both, the district court could only impose a fine, and could not imprison him for contempt. The 7th Circuit held that a court may impose either imprisonment or a fine, but not both. The guidelines do not trump statutes. Because section 401 states that punishments may only be disjunctive, the mandatory fine provision in the guidelines cannot be given effect. The court also rejected the government’s argument that 18 U.S.C. section 3551, which permits a fine to be imposed in addition to any other sentence, constituted a repeal of the disjunctive sentencing provision of the criminal contempt statute. U.S. v. Holloway, 991 F.2d 370 (7th Cir. 1993).
7th Circuit upholds $5,000 fine where defendant had $20,000 in assets and hired private attorney. (630) The 7th Circuit upheld a $5,000 fine despite defendant’s claim that he was indigent. Defendant had a fine range of between $17,500 and $4,000,000, and the district court exercised its discretion under section 5E1.2(f) to depart below this minimum. Defendant owned a car worth $1,000, a truck worth $14,000, furniture worth $5,000, and his wife was able to hire an attorney to handle defendant’s appeal. In light of this, the district court did not err in its assessment of defendant’s degree of indigence and his family’s degree of hardship. U.S. v. Fulford, 980 F.2d 1110 (7th Cir. 1992).
7th Circuit rejects claim that fine should have been offset by $18,000 seized from defendant’s residence. (630) The 7th Circuit rejected defendant’s contention that his $10,000 fine was based on clearly erroneous information and that he should have been credited with the $18,000 seized by police at the time of his arrest. The district court determined that defendant not only had assets, but that he had the ability to earn excellent income from legitimate sources. Although defendant challenged the presentence report’s determination of his net worth, he did nothing to contest the conclusion that he had the ability to earn sufficient money to satisfy his obligations following his release. If defendant did have a claim to the $18,000, he would have adequate opportunity to pursue this claim in a separate proceeding. U.S. v. Blackman, 950 F.2d 420 (7th Cir. 1991).
7th Circuit affirms $50,000 fine even though judge considered defendant’s ability to pay $40,000 fine. (630) The 7th Circuit rejected defendant’s claim that the district court failed to weigh all the factors set forth in 18 U.S.C. section 3572(a) in determining his ability to pay a $50,000 fine. Although the statutory factors were considered with respect to defendant’s ability to pay a $40,000 fine, defendant did not argue that his ability to pay a $50,000 fine was substantially less than his ability to pay $40,000. Defendant failed to object to the increased fine at sentencing, even though he had the opportunity to do so. The trial judge’s determination that a $50,000 fine would not pose undue hardship on the defendant was permissible. U.S. v. Bradach, 949 F.2d 1461 (7th Cir. 1991).
8th Circuit upholds minimum guideline fine. (630) Defendant was convicted of being a felon in possession of firearms. He challenged for the first time on appeal a $12,000 fine. The PSR indicated that, in spite of defendant’s limited financial prospects, he could “perform some type of work” and “make payments toward a fine.” In imposing the fine, the district court remarked that the fine was “a legitimate part of the sentence” and it expected defendant to pay it. The fine was the minimum fine under the guidelines, and defendant did not challenge the PSR’s finding that he could work to pay a fine. The Eighth Circuit found no plain error. U.S. v. Cornelison, 717 F.3d 623 (8th Cir. 2013).
8th Circuit upholds fine despite lack of assets and $40,000 credit card debt. (630) The court directed that during his term of incarceration, defendant must pay at least $25 quarterly or ten percent of his prison earnings, whichever was greater. In addition, after release, defendant must pay monthly installments of at least ten percent of his monthly household income, and in no case less than $200 per month. On appeal, defendant argued that the district court failed to address the relevant statutory or guideline factors, and erred in finding that he would be able to pay the fine. The Eighth Circuit upheld the fine. Defendant held college degrees in math and physics. Although he had no assets and credit card debt of about $40,000 at the time of sentencing, he reported several instances of prior employment, including working as a weapons mechanic in the U.S. Air Force and serving in the Army Reserves, which included tours in Iraq and Kosovo. He also had worked part-time as a math tutor and part-time at a restaurant. In addition, defendant claimed that he discovered something that might bring him a lot of money. Defendant projected an ability to earn money during and after incarceration, and the court was entitled to consider his college education and prior employment in determining that payment of the fine was “realistic.” U.S. v. Morais, 670 F.3d 889 (8th Cir. 2012).
8th Circuit says inability to pay interest on fine did not mean defendant could not pay fine. (630) The district court imposed a $500 fine on defendant, and ordered him to pay $112.50 in restitution. Defendant argued that the court erred in imposing a fine, claiming that the court necessarily found that he was unable to pay the fine because the court found that he was unable to pay the interest on the fine and the interest on the restitution. He contended that if he was unable to pay a nominal amount of interest, it would be inconsistent for the district judge to find that he could pay a $500 fine. The Eighth Circuit upheld the fine. Defendant’s argument ignored the fact that a reasonable interpretation of the district judge’s finding was that defendant was able to pay up to – but no more than – $612.50 in fines and restitution fees. U.S. v. Knox, 634 F.3d 461 (8th Cir. 2011).
8th Circuit upholds $250,000 fine for corporate defendant despite negative net worth. (630) Defendant, a Subchapter S corporation, pled guilty to harboring illegal aliens for commercial advantage. The court calculated defendant’s guideline fine range to be $420,000-$500,000. Defendant argued that it lacked the resources to pay a fine, especially in light of the $400,000 it spent on satisfying a forfeiture claim. The Eighth Circuit held that the district court did not plainly err in imposing a fine of $250,000. Although the PSR calculated the defendant as having a substantial negative net worth, the district court considered other factors in concluding that it was “not readily ascertainable” that defendant could not pay a fine. The court noted that defendant was still operating at least four restaurants and retained at least $400,000 of equity in the properties as to which the government originally asserted a forfeiture claim. U.S. v. Acambaro Mexican Restaurant Inc., 631 F.3d 880 (8th Cir. 2011).
8th Circuit says court did not pierce corporate veil by asking about finances of defendant’s sole shareholder. (630) Defendant, a Subchapter S corporation, pled guilty to harboring illegal aliens for commercial advantage. Defendant argued the court erred in imposing a fine because it “pierced the corporate veil” by considering the personal financial situation of Reyes, the sole owner of defendant’s stock. The Eighth Circuit disagreed. All profits and losses in a Subchapter S corporation are passed through to shareholders in proportion to the percentage of stock owned by the shareholders. Determining whether the corporate veil was pierced requires more than just recognizing the nexus between a corporation and its shareholders. Here, the court simply inquired how it could conclude that it was readily ascertainable that defendant could not pay a fine when it had no information on Reyes’ personal financial picture. Inquiring about Reyes’ financial status without imposing any personal liability for defendant’s obligations was not tantamount to piercing the corporate veil. U.S. v. Acambaro Mexican Restaurant Inc., 631 F.3d 880 (8th Cir. 2011).
8th Circuit upholds above-guideline fine for wealthy defendant who obtained a portion of his money by fraud. (630) Defendant pled guilty to one count of tampering with a witness, which he did to cover up the fraudulent use of food stamp benefits at his grocery store. Noting that defendant was a “millionaire,” the court imposed a $100,000 fine, which was $70,000 above the advisory guideline range, but well within the statutory maximum for the offense. The Eighth Circuit held that the $100,000 fine was substantively reasonable. Defendant was a relatively wealthy retailer who acquired at least a portion of his wealth by the fraudulent abuse of the food stamp program. Under these circumstances, the substantial fine, in lieu of a prison sentence, was appropriate not only to ensure that the sentence was punitive to defendant, but also to deter other retailers from similar conduct. U.S. v. Koestner, 628 F.3d 978 (8th Cir. 2010).
8th Circuit finds court considered ability to pay before imposing $5,000 fine. (630) Defendant argued that the district court erred in fining him $5,000 without assessing his ability to pay the fine. The Eighth Circuit disagreed. The court did consider defendant’s ability to pay a fine, since the court explicitly held that he did not have the ability to pay a fine within the advisory range of $20,000 to $9,000,000. The court also referenced defendant’s ability to work while in prison, and the court established an installment schedule for payment of the fine. There was no clear error. U.S. v. Alston, 626 F.3d 397 (8th Cir. 2010).
8th Circuit says failure to consider burden that $5,000 fine would place on dependents was not plain error. (630) Defendant argued that the district court failed to consider the burden that his $5,000 fine would place on his dependents, as required by § 5E1.2(d)(3). However, defendant did not object to the trial court’s failure to consider that particular factor. The Eighth Circuit held that defendant failed to establish that the court’s alleged failure to consider the burden the fine would place on his dependents constituted plain error, because he did not show a reasonable probability that the district court would have levied a more favorable sentence absent the alleged error. The court allowed defendant to pay the $5,000 fine at the rate of the greater of $25 per quarter or ten percent of his quarterly income. Defendant did not show why the court would have altered his sentence based on the burden placed on defendant’s dependents by defendant’s obligation to pay $25 per quarter. U.S. v. Alston, 626 F.3d 397 (8th Cir. 2010).
8th Circuit holds that court’s reliance on its own understanding of accounting principles was not plain error. (630) Defendant corporation, which provided ambulance transport services, was convicted of filing false Medicare and Medicaid claims. Defendant challenged the court’s imposition of a $500,000 fine, complaining that the district court relied on its own understanding of certain accounting principles and used a questionable method of determining the company’s ability to pay and that the company did not have the ability to pay the fine. The Eighth Circuit held that the district court did not commit plain error by relying on its own understanding of accounting principles. Defendant did not expressly state what it believed was wrong about the court’s method of calculation, nor pointed to anything unusual about it. It also cited no case that supported its argument that the court should be reversed because its method of calculating the amount of fine defendant was able to pay. The court explained in detail both the manner in which it calculated defendant’s assets, liabilities and future earning estimates, and the rationale behind those calculations. U.S. v. Patient Transfer Service, 465 F.3d 826 (8th Cir. 2006).
8th Circuit finds no plain error in judge’s articulation of basis for fine. (630) Defendant contended for the first time on appeal that the district judge fined him without making specific findings as required by the guidelines. The guidelines state that the district court shall consider eight factors in determining the amount of the defendant’s fine. In this case, the district judge made specific findings regarding defendant’s ability to pay. The judge also explicitly adopted the facts of the PSR, which contained the information defendant now claimed the district court should have considered. Citing previous cases where the judge made a similar or less thorough analysis of the factors, the Eighth Circuit held that the district judge did not commit plain error in its articulation of the basis for the fine. Excluding the portion of the fine imposed for supervised release, the fine was the minimum recommended for defendant’s offense level. Even including the cost of supervised release, the fine was near the bottom of a guideline range of $17,500 to $175,000. The court’s finding was based upon defendant’s participation in the federal prison work program. There was no reason defendant could not pay his total fine of $25,318.41 in his 22 years of incarceration and three years of supervised release. U.S. v. Gladfelter, 168 F.3d 1078 (8th Cir. 1999).
8th Circuit vacates restitution and fine for insufficient findings. (630) Defendant, the senior vice president of a bank, helped the bank president and others conceal a scheme to defraud the bank. Although she received no monetary profit from the scheme and participated out of a misguided loyalty to the president, the district court ordered her to pay $250,000 restitution and a $10,000 fine. The Eighth Circuit vacated the restitution and fine since the district court did not make the required findings. Sentencing courts are required to consider a number of factors under 18 U.S.C. § 3664(a) in determining whether to order restitution, and should make specific findings of fact in regard to those factors. The district court made no findings that showed it considered these factors, including whether defendant had the ability to pay restitution. Similarly, the court did not make the required findings showing that it considered the relevant factors under § 5E1.2, including ability to pay, in imposing a fine. Such findings are mandatory. U.S. v. Van Brocklin, 115 F.3d 587 (8th Cir. 1997).
8th Circuit remands where court did not explain reason for upward fine departure. (630) Defendant pled guilty to skimming more than one million dollars from HUD‑insured housing projects owned and operated by her and her family. The guidelines called for a fine of $3‑$30,000, and the district court imposed a fine of $100,000. The Eighth Circuit reversed, finding the court’s conclusory statements justifying the departure were inadequate. The court justified the departure on the willful, deliberate and repetitious malfeasance of defendant in the management of the property and its woeful condition when she returned them to HUD. The government was prepared to offer testimony on this issue. Defense counsel requested a continuance to prepare rebuttal evidence. The request was denied, and the fine imposed without hearing evidence from either party on the issue. Without record support, the court’s conclusory statements did not provide an adequate basis for the departure. U.S. v. Sharma, 85 F.3d 363 (8th Cir. 1996).
8th Circuit upholds $30,000 fine where defendant attempted to conceal assets. (630) Defendant challenged a $30,000 fine, since the PSR showed he had a negative net worth of $95,000 with a net monthly cash flow of $440. The Eighth Circuit affirmed the fine based on “substantial evidence” that defendant was hiding assets and overstating his debts. The government disputed defendant’s claim that he owed a friend $50,000 and his grandfather $10,000 in business loans. Defendant also transferred almost $25,000 worth of assets to his friend and his $30,000 in his attic. The $30,000 fine was within the guideline range of $6‑60,000. U.S. v. Berndt, 86 F.3d 803 (8th Cir. 1996).
8th Circuit permits cost of supervision fine without § 5E1.2(c) punitive fine. (630) The district court imposed a fine under § 5E1.2(i) to cover the costs of defendant’s supervised release, but rejected a § 5E1.2(c) punitive fine because defendant did not have the ability to pay such a fine in addition to the cost of supervised release and restitution. The Eighth Circuit affirmed, holding that a court may impose a cost of supervision fine without imposing a punitive fine. It makes little sense to impose a token punitive fine under § 5E1.2(c) merely to be able to impose a fine representing the government’s costs. Senior Judge Godbold dissented. U.S. v. Aguilera, 48 F.3d 327 (8th Cir. 1995).
8th Circuit remands where court did not state how it balanced factors in $2.5 million fine. (630) The district court imposed a $2.5 million committed fine, payable in full immediately, but ordered that any interest be waived because defendant did not have the ability to pay interest. Defendant argued that (1) it was error to impose a committed fine, (2) he did not have the ability to pay a $2.5 million fine, and (3) the district court did not expressly find that he had the ability to pay $2.5 million fine. The 8th Circuit agreed that the committed fine was in error, because the guidelines do not provide for committed fines. In addition, remand was necessary because the magnitude of the fine was difficult to justify in light of defendant’s known assets, the lengthy prison term he faced, and the financial needs of his wife and children. Countervailing considerations supporting a high fine included the duration, magnitude and profitability of his drug offenses, his many years of high living at the expense of the victims of drug trafficking, and his attempts to conceal his assets from authorities. Because the record did not reflect how the district court balanced these conflicting factors, remand was necessary. U.S. v. Bauer, 19 F.3d 409 (8th Cir. 1994).
8th Circuit says objection to PSR’s financial assessment preserved challenge to fine. (630) On appeal, defendant challenged the imposition of a $2.5 million fine. Previously, he had objected to the “Financial Situation” portions of his PSR, and he testified at the sentencing hearing that the PSR inflated his net worth. The 8th Circuit held that defendant adequately preserved the challenge to his fine for appeal. Although he also should have objected specifically to the district court’s imposition of the fine, and to the court’s failure to make findings under section 5E1.2, the challenge was preserved. U.S. v. Bauer, 19 F.3d 409 (8th Cir. 1994).
8th Circuit upholds $500 fine for defendant with net worth of $1025. (630) Defendant argued that the trial court’s determination that he could pay a $500 fine was clearly erroneous. The 8th Circuit upheld the fine, even though defendant’s net worth at the time of sentencing was only $1025. The court initially imposed a $3000 fine, but after counsel objected, reduced it to $500. Moreover, defendant’s fine was less than the fines imposed on his co-defendants. Finally, it was clear that the trial court considered the factors specified in the guidelines, although the findings reflected in the sentencing transcript could have been more specific. U.S. v. Magee, 19 F.3d 417 (8th Cir. 1994).
8th Circuit upholds fine that was less than minimum specified in the guidelines. (630) Defendant challenged the propriety of a $15,000 fine. The 8th Circuit upheld the fine, since defendant failed to present evidence that the fine was unreasonable, and the fine was less than the minimum specified in section 5E1.2(c)(3). U.S. v. West, 15 F.3d 119 (8th Cir. 1994).
8th Circuit upholds refusal to vacate fine. (630) Defendant filed a 28 U.S.C. section 2255 motion seeking to have his fine vacated, claiming that after he was sentenced, his financial situation changed dramatically and that he was unable to pay the fine. The 8th Circuit upheld the district court’s refusal to vacate the fine. When defendant was sentenced, section 5E4.2(d) required the district court to consider defendant’s financial ability to pay the fine. Here, the district court considered information about defendant’s financial resources, including his six-figure net worth reported in the presentence report. With respect to defendant’s claim of postsentencing indigency, constitutional safeguards protect an indigent defendant at the time of enforcement proceedings. An individual cannot be punished by incarceration merely for inability to pay a fine. Lincoln v. U.S., 12 F.3d 132 (8th Cir. 1993).
8th Circuit finds defendant waived objection to payment of costs of supervised release. (630) The district court imposed no fine against defendant under section 5E1.2, concluding that defendant lacked the financial ability to pay. However, the court concluded that defendant should be able to pay the costs of supervised release upon his release from prison. Defendant argued that the district court’s decision not to impose a punitive fine precluded requiring him to pay for supervised release under section 5E1.2(i) and that requiring him to pay for the costs of supervised release was not authorized by statute. The 8th Circuit concluded that defendant had waived the arguments, and it found no plain error justifying relief. U.S. v. Prendergast, 4 F.3d 560 (8th Cir. 1993).
8th Circuit upholds $7500 fine despite PSR’s conclusion that fine would cause undue hardship. (630) The 8th Circuit upheld a $7500 fine despite the PSR’s conclusion that a fine would be an undue hardship on defendant’s family. The district court made specific findings showing it considered mitigating factors before assessing the fine. The court concluded that a fine was appropriate, given that defendant’s own valuation of his assets showed a net worth of $18,254. U.S. v. Vidrickson, 998 F.2d 601 (8th Cir. 1993).
8th Circuit affirms $200,000 fine based on unaccounted-for drug profits. (630) Defendant objected to the district court’s imposition of a $200,000 fine on him in his conviction for drug activity. The 8th Circuit found that the district court’s findings were sufficient to withstand the requirement that the court address the factors set forth in 5E1.2(e). Unlike an earlier case, the district court’s finding that defendant had reaped large profits that had not been accounted for was adequate consideration of the defendant’s ability to pay the fine. In light of the evidence, the court was free to disregard defendant’s self-report that he had only a few thousand dollars. U.S. v. Miller, 994 F.2d 441 (8th Cir. 1993).
8th Circuit holds that amendment requiring fine to be paid immediately was not clerical correction. (630) Defendant’s original judgment provided that his $250,000 fine would be paid in installments as a condition to his supervised release. Several days later the district court amended the judgment to provide for payment in full immediately. The 8th Circuit rejected the government’s claim that this amendment to the judgment was the correction of a clerical error. Defendant was entitled to notice and a hearing before the court ordered the amendment to his judgment. U.S. v. Nelson, 988 F.2d 798 (8th Cir. 1993).
8th Circuit upholds fine despite personal guaranty and restitution payment to fraud victim. (630) Defendant argued that a $250,000 fine was excessive, particularly in light of a $2.7 million guaranty executed by himself and his wife for the benefit of his company and the $1.7 million restitution payment he made to his fraud victim. The 8th Circuit upheld the fine, since defendant had the ability to pay it. He did not dispute the district court’s assessment of his net worth at $1,258,113. The personal guaranty covered the value of computer assets and might not be enforced. U.S. v. Nelson, 988 F.2d 798 (8th Cir. 1993).
8th Circuit rules that civil tax penalties and criminal fines did not violate double jeopardy. (630) Defendants conspired to evade paying employment taxes. In calculating the tax loss under section 2T1.1, deficiencies in defendants’ personal taxes were used. Thus, they argued that their criminal fines violated double jeopardy because the civil penalties assessed against them for nonpayment of their personal taxes were punitive. The 8th Circuit affirmed that there was no double jeopardy violation, since the civil penalties and criminal fines did not arise from the same conduct. The tax court imposed civil penalties because defendants did not file returns and pay their personal taxes. The district court imposed the criminal fines because defendants conspired to impede the IRS by evading employment taxes owed by their corporation. U.S. v. Mathis, 980 F.2d 496 (8th Cir. 1992).
8th Circuit remands because district court failed to find whether defendant had the ability to pay $20,000 fine. (630) The 8th Circuit remanded because the district court failed to make specific findings as to defendant’s ability to pay a $20,000 fine. Defendant graduated from high school and attended vocational school but never finished. He was self-employed for a time as a auto mechanic, and had previously worked as a machine operator, bus boy and paper boy. The presentence report indicated that defendant owned a house, but his equity in that house was unknown. No other assets were specifically listed in the presentence report nor was any independent evaluation of defendant’s assets ever introduced at sentencing. It is an incorrect application of the guidelines to impose a fine that defendant has little chance of paying. A determination that the defendant has sufficient assets to pay a fine must be based on more than a statement to that effect in the presentence report. U.S. v. Granados, 962 F.2d 767 (8th Cir. 1992).
8th Circuit affirms order to pay share of taxable trial costs. (630) Under 28 U.S.C. section 1918(b), the district court ordered each defendant to pay his share of taxable trial costs. The 8th Circuit affirmed, notwithstanding defendants’ claim of indigence at the time of sentencing. The court taxed costs with the amounts to be deducted from defendants’ prison earnings. The court found nothing wrong with imposing financial obligations on convicted defendants who are indigent at the time of sentencing when it reasonably can be foreseen that in the future they will have the ability to pay the obligation. Given the length of defendants’ prison terms, their prison wages should be more than enough to pay the costs. U.S. v. Pou, 953 F.2d 363 (8th Cir. 1992).
8th Circuit upholds $40,000 fine despite disparity with codefendant. (630) Defendant contended that his $40,000 fine was unjust because his co-conspirator received only a $4,000 fine. The 8th Circuit upheld the fine, noting that the district court properly based its decision on defendant’s ability to pay the fine. U.S. v. Dall, 918 F.2d 52 (8th Cir. 1990).
8th Circuit finds district court failed to make adequate findings supporting $25,000 fine. (630) Defendant contended that the district court failed to state adequate reasons for the imposition of a $25,000 fine. The 8th Circuit agreed that the district court failed to make adequate findings on the record demonstrating that it considered various factors, including the defendant’s ability to pay the fine and the burden the fine placed on the defendant. The presentence report stated that defendant had a negative net worth, had not generated income through his sales job, and was living on $15-20,000 a year that he borrowed from his family. At sentencing the government stated that defendant lived off of “hundreds of thousands of dollars” but introduced no evidence in support of this position. U.S. v. Cammisano, 917 F.2d 1057 (8th Cir. 1990).
8th Circuit, en banc, holds that money subject to forfeiture may not be used to satisfy criminal fine. (630) Vacating the contrary panel opinion at 889 F.2d 153 (8th Cir. 1989), the en banc 8th Circuit held that money subject to forfeiture may not be used to satisfy a fine. The defendant was found with approximately $120,000 in the trunk of his car. In addition to the criminal action, the government also brought a separate civil forfeiture proceeding against the $120,000 found in the trunk. Before the forfeiture proceedings were complete and after defendant’s conviction, the district court fined defendant $120,000, and ordered the criminal fine be paid from the seized money. The en banc court held that under the relation-back doctrine, the seized money became the property of the United States at the time defendant committed his crime. Therefore, the transfer by defendant to pay his criminal fine was invalid, even though the transfer was ordered by the district court. A district court has no discretion to direct the payment of a fine imposed upon a criminal defendant with monies of the United States. U.S. v. Trotter, 912 F.2d 964 (8th Cir. 1990)(en banc).
8th Circuit reverses two million dollar fine because defendant’s ability to pay was not considered. (630) Following a guilty plea to two counts of possession of cocaine with intent to distribute, the District Court imposed a one million dollar fine for the first offense and a concurrent two million dollar fine for the second offense. The court imposed the fine because of defendant’s “open and defiant” violation of the law and a need for a substantial penalty to address his “reprehensible conduct.” The 8th Circuit reversed. Although a sentence should deter and punish, a fine cannot be imposed without consideration of U.S.S.G. 5E1.2, which directs a court to consider defendant’s ability to pay the fine. Because the District Court did not make a specific finding on the record that the factors in § 5E1.2 were considered, the case was remanded for resentencing. U.S. v. Walker, 900 F.2d 1201 (8th Cir. 1990).
8th Circuit holds fine is warranted when defendant fails to disclose assets. (630) Defendant appealed the imposition of a $10,000 fine, claiming that he did not have the money to pay a fine. The 8th Circuit affirmed the imposition of the fine on the ground that the defendant’s purchase of a Corvette three days prior to the preparation of the presentence report justified the conclusion that he had willfully misrepresented all or part of his income. In this case, the defendant had reported a net worth of minus $18,643.24, but failed to disclose the purchase of the car. U.S. v. Allen, 886 F.2d 143 (8th Cir. 1989).
9th Circuit upholds fine for antitrust conviction. (630) At defendants’ trial for fixing prices, in violation of the Sherman Act, the jury found that the conspiracy had a collective gain of more than $500 million. At sentencing, the district court imposed a fine of $500 million pursuant to the Alternative Fine Statute, 18 U.S.C. § 3571(d). The Ninth Circuit held that the gross gains of all members of the conspiracy, and not defendants’ individual conduct, was an appropriate means of determining the fine. The court also held that the district court was not required to reduce the fine by amounts already paid by other members of the conspiracy to fix prices. U.S. v. Hsiung, __ F.3d __ (9th Cir. July 10, 2014) No. 12-10492.
9th Circuit upholds fine for firearms possession. (630) Defendant was convicted of possession of an unregistered machinegun, in violation of 18 U.S.C. § 922(o). Before sentencing, defendant did not provide a financial statement, and the presentence report found that he had several assets and minimal debt. At sentencing, the district court imposed a fine of $12,500, in addition to a prison sentence. The Ninth Circuit held that the district court had not clearly erred in imposing the fine. U.S. v. Vargem, 747 F.3d 724 (9th Cir. 2014).
9th Circuit upholds fine imposed on illegal reentry defendant. (630) At sentencing on defendant’s conviction for illegal reentry after deportation, the district court found that defendant could not pay the $7,500 to $75,000 fine set forth in the Guidelines. The court nevertheless imposed a $1,000 fine, to be paid in installments. On appeal, the Ninth Circuit held that the fine was not unreasonable. U.S. v. Hernandez-Arias, 745 F.3d 1275 (9th Cir. 2014), superseded, 757 F.3d 874 (9th Cir. 2013).
9th Circuit finds $30,000 fine reasonable for tax evasion. (630) Prior to defendant’s sentencing for tax evasion, he refused to disclose his finances to the probation officer. At sentencing, the district court imposed a $30,000 fine. The court found the fine appropriate because it was not ordering restitution, and it found that defendant’s claim that he was indigent was not credible. The Ninth Circuit upheld the fine, noting defendant’s failure to disclose his finances and his possession of marketable employment skills. U.S. v. Orlando, 553 F.3d 1235 (9th Cir. 2009).
9th Circuit holds that fine may be imposed only for willful violation of bulk cash smuggling offense. (630) Under 31 U.S.C. § 5332(b), a court may impose only a term of imprisonment for the offense of smuggling more than $10,000 out of the U.S. with the intent to evade currency-reporting requirements. By contrast, 31 U.S.C. § 5332(a) allows for imposition of a fine and imprisonment for a willful violation of the bulk cash smuggling statute. At defendant’s trial, the district court did not instruct the jury that defendants had to have acted willfully in attempting to smuggle cash out of the country. For that reason, the Ninth Circuit held, the district court erred in imposing a fine as part of their sentence. U.S. v. Tatoyan, 474 F.3d 1174 (9th Cir. 2007).
9th Circuit says government must return fines, but not restitution, when defendant successfully collaterally attacks conviction. (630) In 1993, defendant was convicted of fraud based on his operation of a Ponzi scheme. As part of his sentence, he was ordered to pay restitution. In 2000, the Ninth Circuit granted defendant’s habeas petition, vacated his conviction, and ordered a new trial. The government elected to dismiss the case because it had not retained the evidence against defendant. Defendant then sought return of the restitution he had paid. The Ninth Circuit held that a defendant who has successfully attacked his conviction collaterally may obtain the return of funds that the government retains, such as fines, special assessments, and costs, but that a defendant may not obtain the return of restitution that the government has collected and distributed to victims. U.S. v. Hayes, 385 F.3d 1226 (9th Cir. 2004).
9th Circuit says uncertain employment prospects are insufficient to show inability to pay fine. (630) Defendant, convicted of transmitting child pornography, argued that he lacked future ability to pay a fine because the stigma of his conviction would prevent him from resuming his career as an art director and set director for movies. The Ninth Circuit held that defendant’s uncertain employment prospects did not carry his burden of showing that he lacked the future ability to pay a fine. The court noted that if the stigma of a child pornography conviction were sufficient to show an inability to pay a fine, no person convicted of that offense would ever have to pay a fine. U.S. v. Rearden, 349 F.3d 608 (9th Cir. 2003).
9th Circuit finds no jurisdiction to reduce fine 11 years after sentence. (630) Eleven years after being ordered to pay a large fine, defendant moved to vacate or reduce the fine. The district court denied the motion, and the Ninth Circuit affirmed. The court held that the district court lacked jurisdiction to reduce the fine under Federal Rule of Criminal Procedure 35(a), which allows a court to correct clear errors within seven days of sentencing. The court also held that the court could not reduce the fine under a statute allowing a court to modify conditions of supervised release or pursuant to its inherent supervisory power. U.S. v. Morales, 328 F.3d 1202 (9th Cir. 2003).
9th Circuit holds Apprendi does not affect loss calculation resulting in fine below statutory maximum. (630) Based on its loss calculation, the district court found that defendant corporation’s fine range straddled the statutory maximum. The district court then sentenced the corporation to a fine below the statutory maximum. The Ninth Circuit rejected defendant’s claim that Apprendi v. New Jersey, 530 U.S. 466 (2000), required the district court to submit the amount of loss for a jury determination, ruling that its prior precedent established that Apprendi does not apply to sentences below the statutory maximum. U.S. v. West Coast Aluminum Heat Treating Co., 265 F.3d 986 (9th Cir. 2001).
9th Circuit reverses $10,000 fine for failure to clearly consider burden on defendant’s dependants. (630) Defendant objected to the PSR’s recommendation that he pay a $10,000 fine, arguing that it would unduly burden his dependants to order him to pay the fine by cashing in a life insurance policy. At sentencing, defense counsel did not raise the issue, and the district court imposed the lump sum fine of $10,000 without making clear that it had considered the burden on defendant’s dependants. The Ninth Circuit noted that prior cases have not required that district court to make explicit findings on the record with regard to the burden issue. But the panel held that “a district court should, in some way, make clear that it has considered the issue.” This error, along with another error in the case led the court to vacate the fine and remand for reconsideration. U.S. v. Sager, 227 F.3d 1138 (9th Cir. 2000).
9th Circuit permits modification of fine where it is an express condition of supervised release. (630) Under 18 U.S.C. § 3583(e), district courts have broad discretion to alter the conditions of a defendant’s supervised release. However, in this case the district court held that it lacked jurisdiction to modify defendant’s fine because the fine was imposed independently of the conditions for supervised release. On appeal, the Ninth Circuit disagreed, noting that “even if the original $6,000 fine was imposed by the court’s judgment, payment of $3,000, in $100 monthly installments, was nevertheless expressly made a condition of supervised release.” Therefore, “because the payment of $3,000 of [defendant’s] fine is a condition of his supervised release, § 3583(e)(2) gives the district court the power to modify that portion of the fine.” U.S. v. Miller, 205 F.3d 1098 (9th Cir. 2000).
9th Circuit finds no plain error in $9,000 fine despite lower fine for defendant’s son. (630) Absent an objection at sentencing, the Ninth Circuit will review an issue only where “exceptional circumstances” exist, under a “plain error” standard. Here, defendant pointed out that his son’s attorney objected to the imposition of the same fine and argued that “a similar objection by the defendant would no doubt have yielded the same result.” However, the Ninth Circuit ruled that defendant’s “wholly separate financial circumstances logically required a separate objection.” “Certainly, if exceptional circumstances had existed, [defendant] would not have relied on co-counsel to make his objections for him.” The $9,000 fine fell at the low end of the range. Thus, even if exceptional circumstances were present, there was no plain error. U.S. v. Scrivener, 189 F.3d 944 (9th Cir. 1999).
9th Circuit says oral pronouncement as to payment of fine prevailed over written judgment. (630) In pronouncing the oral judgment, the judge said defendant could pay his fine upon release from prison. However, the written judgment said the fine was due in full immediately. Because the sentence was being reversed on other grounds, the district court was instructed on remand “to correct the written judgment so that it is consistent with the judge’s earlier oral pronouncement.” U.S. v. Fiorillo, 186 F.3d 1136 (9th Cir. 1999).
9th Circuit says Inmate Financial Responsibility Program does not intrude on court’s responsibility to set fines. (630) The Inmate Financial Responsibility Program was instituted by the Bureau of Prisons to encourage “each sentenced inmate to meet his or her legitimate financial obligations.” See 28 C.F.R. 545.10. The program provides for development of a financial plan that allows inmates to pay certain enumerated obligations, including court ordered assessments, restitution, and fines. Petitioner argued that the program impermissibly intruded on the sentencing court’s responsibility to determine the amount and timing of fine payments. The Ninth Circuit rejected the argument, noting that contrary to some other circuits, the Ninth Circuit has held that a sentencing court may delegate the timing and manner of payments of court-ordered restitution. See U.S. v. Barany, 884 F.2d 1255, 1259-60 (9th Cir. 1989). See also U.S. v. Fuentes, 107 F.3d 1515, 1528 n.25 (11th Cir. 1997). Second, this case does not involve an express delegation. The court also rejected the petitioner’s argument that the program interfered with a “core function” of Article III judges. The program does not usurp judicial power. It simply prevents prisoners from being employed in prison without making payments toward their outstanding fine obligations. Montano-Figueroa v. Crabtree, 162 F.3d 548 (9th Cir. 1998).
9th Circuit says pre-guidelines fine did not require ability to pay, and was not double punishment. (630) Petitioner argued that his $750,000 fine was cruel and unusual punishment because the court failed to inquire into his ability to pay. The Ninth Circuit rejected this argument because defendant was sentenced in September, 1986, before the effective date of the sentencing guidelines which require the court to consider the defendant’s ability to pay. The fine was within statutory limits and was presumptively valid. That it was in addition to imprisonment did not result in multiple punishment or double jeopardy. The fine and prison sentence were defined by Congress as a single punishment. U.S. v. Mejia-Mesa, 153 F.3d 925 (9th Cir. 1998).
9th Circuit finds defendants had ability to pay fines of $10,000 and $15,000 respectively. (630) The district court imposed a $15,000 fine on defendant Ladum because he made significant income between 1983 and 1996, “only some of which has been accounted for.” It imposed a $10,000 fine on defendant Weaver because his net worth was $38,650 and he had significant assets that had not been disclosed. On appeal, the Ninth Circuit upheld both fines. The defendant has the burden to show that he cannot pay a fine, and neither defendant made a sufficient showing. U.S. v. Ladum, 141 F.3d 1328 (9th Cir. 1998).
9th Circuit says $50 special assessment prevents sentences from being truly concurrent. (630) In Ray v. U.S., 481 U.S. 736, 737 (1987) (per curiam), the Supreme Court held that because $50 special assessments must be imposed on each count of conviction under 18 U.S.C. § 3013 and Guideline § 5E1.3 the sentences imposed on each count are not truly concurrent. Accordingly, in the present case, the Ninth Circuit held that resentencing was required on four reversed bank fraud counts even though defendant was sentenced concurrently to the same sentence on other counts. U.S. v. Nash, 115 F.3d 1431 (9th Cir. 1997).
9th Circuit says court may consider post-sentencing information in resentencing. (630) After sentencing, defendant filed a motion under 28 U.S.C. § 2255 claiming he had not been given enough time to read the presentence report before sentencing, and therefore had not been able to present accurate financial information. The district court granted his petition but ordered that “the only issue to be decided at the resentencing hearing is the propriety of the $1,000 fine.” At resentencing, the judge re-imposed the $1,000 fine after noting that defendant had improved his financial situation, post-sentencing, by paying down a mortgage. On appeal, defendant argued that under U.S. v. Klump, 57 F.3d 801, 803 (9th Cir.), cert. denied, 116 S.Ct. 675 (1995), and U.S. v. Caterino, 29 F.3d 1390 (9th Cir. 1994), courts are precluded from considering post-sentencing conduct at resentencing. The Ninth Circuit expressed doubt about this supposed “rule,” but noted that in any event Klump and Caterino involved resentencing after remand from the Court of Appeals, whereas this case involved resentencing without an intervening remand. The district court properly considered the “best available information” in re-setting defendant’s fine. U.S. v. Jones, 114 F.3d 896 (9th Cir. 1997).
9th Circuit upholds $75,000 fine despite “no expectation that he’ll pay it.” (630) The district court imposed the maximum fine even though it had “no expectation that he’ll pay it.” The district court explained that “in view of my inability to provide the victim with any restitution, this is the appropriate thing to do.” On appeal, the Ninth Circuit rejected defendant’s argument that the district court found he did not have the ability to pay a fine. The court said that the district court’s comment “seems to have been a reflection on [defendant’s] willingness to hide his income.” Moreover, the defendant had the burden of proving that he could not pay a fine. In the absence of that proof, the court must impose a fine under § 5E1.2(a). A court may fine a presently indigent defendant if it finds that defendant has sufficient earning capacity to pay the fine in the future. Here, defendant had an excellent background in the securities field and real talent in the real estate development field. There was no clear error. U.S. v. Ortland, 109 F.3d 539 (9th Cir. 1997).
9th Circuit says no criminal history points can be assessed for non-willful failure to pay fines. (630) The district court added two criminal history points pursuant to § 4A1.1(d) because defendant was under a sentence of “legal financial obligation” (LFO) when he committed his most recent offense. As part of his sentences for two prior convictions in 1988 and 1991, he was to have paid fines, costs and restitution in the amount of $713 and $632, respectively. However, he was unable to pay these amounts immediately and the record failed to disclose how much of the amounts remained unpaid. The Ninth Circuit did not reach the issue of whether a LFO sentence constitutes a criminal justice sentence under § 4A1.1(d) because “even if it does, the imposition of additional criminal history points for such a sentence, on the record before us and without a finding of willful failure to pay, violates the Due Process Clause.” On resentencing, the district court was directed not to add the additional two points unless it found that defendant’s failure to pay was willful. U.S. v. Parks, 89 F.3d 570 (9th Cir. 1996).
9th Circuit upholds fine where defendant transferred property to his father-in-law. (630) Defendant challenged his fine on the ground that he was indigent. The district court found that he had transferred property to his father-in-law in what was “nothing more than a straw arrangement in fraud of [his] creditors.” The Ninth Circuit found no error, concluding that the district court properly found that Cox had the assets to pay the fine. U.S. v. Cox, 74 F.3d 189 (9th Cir. 1996).
9th Circuit says loss of property after dismissal of forfeiture complaint did not violate “excessive fines” clause. (630) The forfeiture complaint was dismissed pursuant to a voluntary agreement between the parties and all the properties were returned to defendant, so no forfeiture was actually imposed. Nevertheless defendant argued that her subsequent loss of two of the properties in foreclosure sales constituted a “forfeiture” and therefore was “punishment” that would trigger the protections of the “excessive fines” clause. See Austin v. U.S., 113 S.Ct. 2801, 2805 (1993). The Ninth Circuit rejected the argument, concluding that the civil forfeiture proceeding did not result in any forfeiture and therefore the excessive fines clause was never implicated. U.S. v. Kearns, 61 F.3d 1422 (9th Cir. 1995).
9th Circuit upholds $4,000 fine for destitute prisoner. (630) Defendant argued that the $4,000 fine was inappropriate because he was destitute at the time of sentencing. The 9th Circuit affirmed, noting that defendant could earn money by working in the Inmate Financial Responsibility Program while incarcerated. There was no error. U.S. v. Haggard, 41 F.3d 1320 (9th Cir. 1994).
9th Circuit reverses fine that was a ten level upward departure. (630) Defendant’s maximum guideline fine was $30,000 under §5E1.2(c)(3). Nevertheless the district court imposed the maximum statutory fine of $250,000, an upward departure of 10 fine range levels. The district court listed three aggravating circumstances involving defendant’s flight to a foreign country where he remained at large for 2-1/2 months, but the court did not explain whether these circumstances were adequately considered by the Sentencing Commission. The district court also failed to explain its reasons for the extent of the departure. U.S. v. Gray, 31 F.3d 1443 (9th Cir. 1994).
9th Circuit upholds order to reimburse government for attorney’s fees in lieu of fine. (630) Defendant argued that the district court erred in ordering him to reimburse the government for attorney’s fees and costs in lieu of a fine. The 9th Circuit rejected the argument, holding that the district court had discretion to impose fees in lieu of the fine recommended in the guidelines. The dollar amount of the penalty was well within the guideline range. U.S. v. Eaton, 31 F.3d 789 (9th Cir. 1994).
9th Circuit reviews procedures for imposing fines where defendants allege inability to pay. (630) After finding defendants did not clearly establish their inability to pay fines, the district court imposed punitive fines and costs of incarceration totaling $212,864, $236,736 and $236,736 respectively. The Ninth Circuit found several errors. First, the appropriate standard for defendants to show inability to pay fines is by a preponderance of the evidence. Here the evidence was sufficiently strong to establish by a preponderance that defendants did not have the present ability to pay the fines. The presentence report concluded defendants did not have the ability to pay and they were represented by appointed counsel, facts which compel a finding defendants did not have the present ability to pay. In addition, the district court cannot defer the determination of future ability to pay, but must determine this before imposing a fine. U.S. v. Robinson, 20 F.3d 1030 (9th Cir. 1994).
9th Circuit refuses to permit community service to be fallback where defendant cannot pay fine. (630) The district court imposed substantial fines on each of three defendants and required that if they could not pay the fines, they were to perform community service as a substitute punishment. On appeal, both defendants and the government agreed that the court could not impose an alternative sentence to be carried out in the event the fine was not paid. The Ninth Circuit agreed, finding that any sentence imposed in place of a fine, such as community service, is an alternative sanction that cannot be imposed as a fallback punishment if defendant cannot pay the fine. U.S. v. Robinson, 20 F.3d 1030 (9th Cir. 1994).
9th Circuit refuses to address challenges to fines not raised below. (630) For the first time on appeal defendants argued that § 5E1.2(i), the guideline provision requiring imposition of a fine unless the defendant establishes an inability to pay, violated the Sentencing Reform Act and the Due Process Clause. Because defendants did not raise these claims in the district court, the Ninth Circuit declined to consider them on appeal. U.S. v. Robinson, 20 F.3d 1030 (9th Cir. 1994).
9th Circuit holds that government is a “person” for fine purposes. (630) Former 18 U.S.C. §3623(c)(1) provided that the fine could be based upon the “pecuinary loss to another person.” Defendant argued that the government was not a “person” under 18 U.S.C. §3623 because “person” is defined under 1 U.S.C. §1 as including only “corporations, companies, associations, firms, partnerships, societies, and joint stock companies as well as individuals.” The 9th Circuit rejected this argument, noting that the statutory definition of “person” is not an exhaustive list. Section 1 provides simply that “person” includes the above. The court held that the government is a “person” under 18 U.S.C. §3623. U.S. v. Hughes Aircraft Co., Inc., 20 F.3d 974 (9th Cir. 1994).
9th Circuit says findings were vague, but sufficient to uphold $3.5 million fine. (630) Under the government’s calculations, which the defendant did not show were incorrect, the court could have fined defendant anywhere from $17.6 million to $984 million. Thus the 9th Circuit held that even though the district court’s findings were “vague,” they were sufficiently supported to uphold the $3.5 million fine imposed. U.S. v. Hughes Aircraft Co., Inc., 20 F.3d 974 (9th Cir. 1994).
9th Circuit finds no evidence of inability to pay fine; denies motion to supplement record. (630) The district court ordered defendant to pay a fine of $100,000 as part of his sentence for RICO and related offenses. Defendant moved to supplement the record with information demonstrating his inability to pay the fine and also challenged the findings of the trial court. The Ninth Circuit found no evidence to substantiate defendant’s financial status and denied the motion to supplement the record. Under Fed. R. App. P. 10(a), the appellate record consists of the original papers and exhibits filed in the district court. Defendant’s supplemental information was neither filed nor presented to the district court during or after sentencing. Defendant did not provide requested personal financial information for the presentence report and without the supplemental materials there was no evidence to support defendant’s financial claims. U.S. v. Blinder, 10 F.3d 1468 (9th Cir. 1993).
9th Circuit holds that cost of incarceration fine can be imposed even if punitive fine is not. (630) Rejecting holdings in the 1st, 5th and 10th Circuits, and following the decision of the 7th Circuit in U.S. v. Turner, 998 F.2d 534 (7th Cir. 1993), the 9th Circuit held that a cost of incarceration fine may be imposed even though the district court does not impose a punitive fine. Here the evidence indicated defendant’s ability to pay was $650 per month. The district court simply imposed the highest fine within the total permitted by the guidelines, regardless of rubric that it found defendant could afford to pay. U.S. v. Favorito, 5 F.3d 1338 (9th Cir. 1993).
9th Circuit says defendant failed to show inability to pay fine by refusing to provide financial information. (630) Defendant claimed that she was unable to pay the $25,000 fine. The 9th Circuit rejected the argument, noting that by refusing to provide financial information to the probation officer, defendant failed to carry her burden show an inability to pay the fine. However, since the sentence was vacated on other grounds, the 9th Circuit noted that her fine would have to be recomputed if her offense level changed on remand. U.S. v. Soyland, 3 F.3d 1312 (9th Cir. 1993).
9th Circuit rejects substitution of community service for fine and remands for findings on ability to pay. (630) The district court sentenced defendant to 3 months of home detention and 240 months of community service but no fine, finding that the community service would remind defendant of what he did wrong. The court made no finding concerning defendant’s ability to pay. Noting that the probation report showed defendant was not destitute, the 9th Circuit reversed and directed the district court to make appropriate findings as to defendant’s ability to pay. The guidelines do not permit substitution of community service for a fine. U.S. v. Ferrin, 994 F.2d 658 (9th Cir. 1993).
9th Circuit upholds $25,000 fine based on substantial undisclosed funds. (630) Although the presentence report suggested that defendant had a negative net worth, it also contained information that defendant had access to substantial undisclosed funds. The defendant challenged this information, but the 9th Circuit held that the “fact that the district court resolved the conflicting information against [defendant] does not mean that the district court improperly refused to consider evidence of his indigency.” The court upheld the fine. U.S. v. Schubert, 957 F.2d. 694 (9th Cir. 1992).
9th Circuit upholds fine where defendant chose to live a more extravagant life style than his means allowed. (630) In denying the defendant’s motion to stay the execution of the fine, the district court stated that it had imposed the fine and payment schedule because it found that defendant “had chosen to live a more extravagant lifestyle than his means made practical and that the schedule could be met if [defendant] lived within his means.” Among other factors the court noted that defendant earned $31,000 per year, that many of his debts were owed to relatives and could be paid off at any time, that he was paying off a new BMW automobile, and that he was allowing a friend to live rent-free in his apartment. U.S. v. Nazifpour, 944 F.2d 472 (9th Cir. 1991).
9th Circuit upholds finding that defendant had ability to pay $17,500 fine. (630) The district court explained the imposition of the fine based upon defendant’s income tax information and his co-defendant’s statements suggesting that he had large sums of money to spend. The 9th Circuit found no plain error in relying on this information. U.S. v. Inafuku, 938 F.2d 972 (9th Cir. 1991).
9th Circuit holds that defendant did not meet his burden to show he could not pay $500 fine. (630) Defendant, an indigent prisoner at the time of his offense, was ordered to pay a $500 fine. The 9th Circuit affirmed the fine, ruling that he failed to meet his burden to show that he had no ability to pay the fine under § 5E1.2(d). The presentence report showed he had no debts and was employed in prison. No impediment to his future earning capacity was shown. U.S. v. Quan-Guerra, 929 F.2d 1425 (9th Cir. 1991).
9th Circuit refuses to consider challenge to fine raised for the first time on appeal. (630) Defendant argued that the fine provision of the guidelines were contrary to statutory authority and that the district court erred in failing to determine whether he was financially able to bear the fine assessed. However, the defendant did not contest the fine in the district court. The 9th Circuit held that as a general rule it will not consider an issue raised for the first time on appeal. Accordingly it refused to consider the defendant’s claim. U.S. v. Mondello, 927 F.2d 1463 (9th Cir. 1991).
9th Circuit holds that mandatory fines are not inconsistent with the Commissions’ general mandate. (630) Defendant argued that the guidelines violate their Congressional mandate by establishing mandatory fines rather than discretionary fines. The 9th Circuit rejected this argument, noting that the primary purpose of the guidelines was to limit discretion. Moreover, under the guidelines judges have discretion to waive any fine upon a finding of inability to pay or undue burden on a defendant’s dependants. U.S. v. Martinez-Cortez, 924 F.2d 921 (9th Cir. 1991).
9th Circuit suggests that court may impose a fine greater than the maximum specified in the fine table. (630) Guideline § 5E1.2(c)(2) provides that the maximum fine is the greater of the maximum amount shown in the fine table, or twice the pecuniary loss, or three times the pecuniary gain. Therefore the statement in the presentence report that “the fine range for a level 11 offense is $2,000 to $20,000” was not completely accurate. The 9th Circuit said “it may be that the district court had discretion to impose more than a $20,000 fine.” However, the court found no plain error in the court’s refusal to do so. U.S. v. Lopez-Cavasos, 915 F.2d 474 (9th Cir. 1990).
9th Circuit holds that guidelines require imposition of a fine unless defendant establishes inability to pay. (630) The guidelines establish that it is the “defendant’s burden” to prove that he is unable to pay a fine. (See U.S.S.G. § 5E4.2.) Here the defendant did not present any financial evidence whatsoever and in fact “inhibited the government’s own efforts to ascertain the true extent of his drug-related wealth.” Accordingly the 9th Circuit held that he did not meet his burden of proof and thus the $50,000 fine, “which was relatively small in comparison to his known wealth,” was properly assessed. U.S. v. Rafferty, 911 F.2d 227 (9th Cir. 1990).
9th Circuit limits remand to correcting illegal fine. (630) Under 28 U.S.C. § 2106, an appellate court may remand a case for complete resentencing where part of the sentence is vacated. Here, however, only the fine was illegal, and the 9th Circuit declined the government’s invitation to mandate complete resentencing. The mandate was limited to correcting the excessive fine. U.S. v. Garren, 893 F.2d 208 (9th Cir. 1989).
9th Circuit rules it improper to impose fine as “reimbursement” for cost of appointed counsel without determining ability to pay. (630) Defendant argued that the $5,000 fine was imposed to punish him for the zealous advocacy of his lawyer. The government suggested that it was merely intended to reimburse the government for the fees paid to court appointed counsel. The 9th Circuit held that under either rationale, the fine was improper. Even if it was intended as reimbursement, the court “erred in not making the requisite finding that ‘funds are available for payment’ of the fees.” 18 U.S.C. § 3006A(f). U.S. v. Seminole, 882 F.2d 441 (9th Cir. 1989).
10th Circuit holds that below-guidelines fine amount was presumptively reasonable. (630) Defendant was convicted of possessing a weapon while an inmate of a federal prison, in violation of 18 U.S.C. § 1791(a)(2) & (b)(3). The guidelines called for a fine of between $4,000 and $40,000, but the district court imposed a fine of only $2,000. The Tenth Circuit affirmed, rejecting defendant’s argument that the district court erred in failing to consider the burden that the fine would impose on his daughter. Defendant had no financial dependents and his daughter was 18 years old. In response to counsel’s request that a fine would be “counterproductive” and his savings “should go to a place where it’s going to have a productive impact upon a human being whose dad hasn’t been able to give her much else,” the court reduced the fine from $4,000 to $2,000. The amount of the fine was substantively reasonable. Because a guidelines sentence is presumptively reasonable, it follows that a “below-guideline sentence is also presumptively reasonable against an attack by a defendant claiming that the sentence is too high.” U.S. v. Perez-Jiminez, 654 F.3d 1136 (10th Cir. 2011).
10th Circuit rejects $10,000 fine where court did not make finding that defendant could pay a fine. (630) Defendant argued that the district court erred in imposing a fine of $10,000 because (1) the PSR found that he was unable to pay a fine; (2) he objected to the imposition of the fine on the basis of his inability to pay; and (3) the fine impermissibly impaired his ability to pay restitution. The Tenth Circuit held that the district court abused its discretion by not considering either defendant’s ability to pay the fine or the effect the fine might have on his ability to pay restitution. Although the $10,000 fine was well within the guideline range of $3,000 to $30,000, the record did not reflect the district court’s consideration of the pertinent factors prior to imposing the fine. Despite the PSR’s finding that defendant did not appear able to pay a fine, and the absence of any objection by the government to this finding, the district court did not provide any reasons for imposing the fine. U.S. v. Vigil, 644 F.3d 1113 (10th Cir. 2011).
10th Circuit holds that current indigence did not preclude imposition of fine. (630) Defendant claimed that the court erred in ordering him to pay a $1000 fine when it was clear that he had no ability to pay a fine. Guideline § 5E1.2(a) require the imposition of a fine “except where the defendant establishes that he is unable to pay and is not likely to become able to pay any fine.” Thus, defendant had the burden to establish both his present and future inability to pay. The Tenth Circuit found no plain error in the court’s imposition of a fine. At sentencing, defendant did not object to the fine. Even assuming he established a present inability to pay a fine, he did not establish a future inability to pay. Defendant did not submit any evidence establishing an inability to find future employment or any evidence indicating current or future financial liabilities that would prevent him from using future earnings to pay a fine. Defendant’s indigence at the time of sentencing did not preclude the imposition of a fine. U.S. v. Brown, 314 F.3d 1216 (10th Cir. 2003).
10th Circuit upholds maximum guideline fine. (630) Defendant operated a Ponzi scheme, in which individuals and organizations invested money, and were paid returns generated from money invested by later investors. Defendant was eligible for a fine ranging between $15,000 and $150,000. The Tenth Circuit upheld a $150,000 fine, the maximum guideline fine. Defendant failed to complete and sign her financial affidavit, claiming she was unable to do so because she had not had access to her financial records for over three years due to a “cease and desist” order. She also asserted that her eligibility for appointed counsel demonstrated her inability to pay any fine. However, evidence at trial indicated that about $2 million was unaccounted for, and defendant offered no explanation at sentencing as to its whereabouts. Further, the court asked defense counsel at sentencing whether there were “any records that she says exist that somehow [he] couldn’t get [his] hand on in this case.” Defense counsel said no. U.S. v. Deters, 184 F.3d 1253 (10th Cir. 1999).
10th Circuit upholds $7500 fine despite present lack of assets. (630) Defendant was convicted of armed bank robbery. He appealed a $7500 fine, claiming that the court could not have considered the impact of the fine on his dependents and on his ability to make restitution. His PSR showed that he was arrears on his child support and installment debt payments, and indicated that he was incapable of paying both restitution and a fine at the time of sentencing but might, over time, pay restitution or a fine. The Tenth Circuit held that the fine was not an abuse of discretion. The district court considered defendant’s ability to pay both restitution and a fine despite his present lack of assets and parental responsibility. Based on defendant’s significant employment record, the court concluded defendant would have the future capacity to defray the financial consequences of his conduct. Accordingly, it imposed a fine at the lowest end of the guideline range, in addition to ordering restitution. The court was not required to make factual findings specific to each statutory factor prior to imposing a fine. U.S. v. Trujillo, 136 F.3d 1388 (10th Cir. 1998).
10th Circuit holds Rule 35(b) permits court to reduce fine. (630) Based on defendant’s cooperation with police, the district court granted the government’s initial Rule 35(b) motion to reduce his term of imprisonment. The government then filed a second Rule 35(b) motion, seeking to further reduce his sentence and to eliminate or reduce his fine. The district court further reduced his term of imprisonment, but ruled it did not have authority under Rule 35(b) to reduce a fine, because fines are controlled by 18 U.S.C. § 3573. The Tenth Circuit held that Rule 35(b) permits a court to reduce a fine. The rule allows a court to reduce a sentence in to reflect a defendant’s substantial assistance in the prosecution of others in accordance with the sentencing guidelines. The guidelines include fines as a type of criminal sentence. The statutes under which defendant was convicted also include fines as part of the sentence. U.S. v. McMillan, 106 F.3d 322 (10th Cir. 1997).
10th Circuit upholds § 5E1.2(i) cost of imprisonment fine. (630) Relying on U.S. v. Spiropoulos, 976 F.2d 155 (3d Cir. 1992), defendant argued that a § 5E1.2(i) cost of imprisonment fine was invalid because it served none of the purposes of punishment set forth in the Sentencing Reform Act. He also argued that it violated due process because it was irrationally tied to a government expense that fine money cannot be used to offset. The Tenth Circuit disagreed, finding the fine was rationally related to a legitimate government purpose. The guidelines provide longer sentences for more serious crimes. Since the costs of confinement rise with the seriousness of a crime, a fine based on these costs reflects the seriousness of the crime. The fine is not greater than necessary to comply with the purposes of the Sentencing Reform Act. Nothing in the Act indicates that the boundary of a “sufficient” fine is set by the fine table in § 5E1.2(c). U.S. v. May, 52 F.3d 885 (10th Cir. 1995).
10th Circuit relies on earning capacity to uphold $15,000 fine. (630) Defendant challenged a $15,000 fine because his presentence report concluded that he was unable to pay a fine. The 10th Circuit held that the fine was not plain error. Defendant did not object to the fine at sentencing. Section 5E4.2 required the court only to consider the pertinent factors before imposing the fine. The court considered defendant’s ability to pay in setting the amount of the fine. Although defendant was without substantial assets and unable to pay the full fine immediately, defendant had earning capacity sufficient to pay the fine over time during his period of supervised release. U.S. v. Sneed, 34 F.3d 1570 (10th Cir. 1994).
10th Circuit upholds $15,000 fine where defendant had $7500 equity in property. (630) The 10th Circuit held that defendant did not meet her burden of proving she was unable to pay a $15,000 fine. Although many of defendant’s properties were in foreclosure, she presented no evidence that she made any effort to sell them before foreclosure so that the equity could be preserved. Of the properties that were sold, defendant’s ownership interests were not disclosed to the court until after the sales were completed. Additionally, defendant presented no evidence of the whereabouts of the money from cashier’s checks totaling $10,900 that she purchased shortly before her arrest. Finally, one of the properties defendant still owned at sentencing was not in foreclosure and had about $7500 equity in it. U.S. v. Ballard, 16 F.3d 1110 (10th Cir. 1994).
10th Circuit upholds fine despite negative monthly cash flow. (630) The 10th Circuit upheld a $1,000 fine for a defendant with a negative monthly cash flow of $23. The district court concluded the fine was appropriate because defendant lacked any significant financial debt, held a Masters of Science in Education, and demonstrated an ability to maintain gainful employment. U.S. v. Meuli, 8 F.3d 1481 (10th Cir. 1993).
10th Circuit remands to reimpose fine using proper fine range. (630) The district court calculated defendants’ fine range to be $141,598 to $424,794, based on the pecuniary gain to defendants as the minimum, under section 5E4.2(c)(1)(B), and three times that amount as the maximum, under section (c)(2)(C). The district court then imposed the minimum fine on each defendant. However, the district court also ordered restitution by each defendant in the amount of $141,598, which had the effect under section 5E4.2(c) of reducing the minimum fine to $10,000. The 10th Circuit rejected defendants’ attempt to simply revise the sentence and impose the minimum fine of $10,000, and the government’s request to uphold the fine as still within the proper fine range. Instead, the court remanded the case to the district court to reconsider the imposition of the fine. It was impossible to determine whether the district court would have imposed a fine of $10,000, or $141,598, or some other amount, had it properly calculated the fine range. U.S. v. Hollis, 971 F.2d 1441 (10th Cir. 1992).
10th Circuit reverses special assessment imposed on forfeiture counts. (630) Defendant was convicted of several fraud and money laundering counts. In addition, pursuant to 18 U.S.C. section 982, the jury ordered the forfeiture of certain items which defendant had purchased with fraudulently obtained money. The 10th Circuit ruled that the district court erroneously ordered defendant to pay a $50 mandatory special assessment on each of the forfeiture counts. Because he could not have been imprisoned for the forfeiture convictions under section 982, he should not have been ordered to pay the $50 special assessments, which apply only to felonies. U.S. v. Lovett, 964 F.2d 1029 (10th Cir. 1992).
10th Circuit reverses fine for costs of incarceration where no punitive fine was imposed. (630) The 10th Circuit ruled that the district court erred in imposing a fine for the costs of incarceration and supervised release under guideline section 5E1.2(i) because no punitive fine was imposed. In U.S. v. Labat, 915 F.2d 603 (10th Cir. 1990), the court held that an additional fine under section 5E1.2(i) cannot be imposed unless the court first imposes a punitive fine under section 5E1.2(a). U.S. v. Edmonson, 962 F.2d 1535 (10th Cir. 1992).
10th Circuit upholds pre-guidelines fine where defendant refused to reveal financial information. (630) In a pre-guidelines case, defendant contended that the district court failed to comply with the mandatory language of 18 U.S.C. section 3622(a)(3) in imposing a $30,000 fine because no evidence existed to support a finding that he was capable of paying the fine in one year. The 10th Circuit upheld the fine, since the record revealed that defendant had earned over $100,000 over the years and owned substantial real and personal property. He refused to furnish any information to the court concerning his financial status. If defendant felt the court had inadequate information to impose such a fine, he should have provided the information to the district court. U.S. v. Burson, 952 F.2d 1196 (10th Cir. 1991).
10th Circuit upholds $12,500 fine. (630) Defendant complained that the district court erred in assessing him a $12,500 fine when there was no evidence that he was able to pay the fine. The 10th Circuit upheld the fine. Here, the district court imposed the minimum fine based upon defendant’s financial profile and his future earning potential. At the time of his arrest, defendant had considerable assets, including an expensive car, an expensive boat, a house in Texas and $25,000 in cash. Although some, but not all, of defendant’s assets were seized in a forfeiture proceeding, a loss of assets obtained in an illegal activity does not insulate a defendant from a fine. Further, defendant had considerable earning potential as a “wizard” auto mechanic. U.S. v. Ruth, 946 F.2d 110 (10th Cir. 1991).
10th Circuit rules district court cannot impose larger fine because it disagrees with defendant’s disposition of property. (630) Defendant owned a rental property valued at $57,000 which had a first mortgage of $23,000. Defendant attempted to get a second mortgage on the property in order to pay the $10,000 she owed to her attorney, but was unsuccessful. She ultimately entered into a contract to sell the property to a third party for $33,000, which paid her attorneys’ fees but left her no equity. Nonetheless, the district court imposed a $21,146.64 fine, relying upon the vanished equity to provide her with the needed money. The court reasoned that defendant could not avoid a fine by “stripping” herself of assets in order to discharge other obligations based on her own “idiosyncratic determination of her priorities.” The 10th Circuit reversed, finding that the defendant should not be punished for a financial decision to satisfy “perfectly legitimate obligations” in a priority not endorsed by the district court. However, the court rejected defendant’s contention that the district court must make specific findings on each factor when imposing a fine. U.S. v. Washington-Williams, 945 F.2d 325 (10th Cir. 1991).
10th Circuit upholds fine despite district court’s failure to make explicit findings, where facts were undisputed. (630) Defendant claimed that he was unable the pay the $3,000 fine imposed by the district court, and that the district court erroneously failed to make explicit findings concerning the factors to consider under guideline section 5E1.2. The 10th Circuit held that the court’s failure to make explicit findings was not plain error where it had before it undisputed facts supporting a substantial fine. The defendant did not challenge the fine range stated in the presentence report nor did he challenge the financial information. He did not mention an inability to pay the fine, although he did allege that he had worked steadily at a well-paying job for 16 years. Since the necessary facts were in the record and the imposition of a minimum fine was unchallenged, the court would not assume the sentencing court failed to consider the factors enunciated in section 5E1.2(d). U.S. v. Nez, 945 F.2d 341 (10th Cir. 1991).
10th Circuit vacates additional fine in absence of punitive fine. (630) In accordance with its decision in U.S. v. Labat, 915 F.2d 603 (10th Cir. 1991), the 10th Circuit vacated a $150,000 fine for the costs of incarceration and supervised release, since no punitive fine had been imposed. U.S. v. Eves, 932 F.2d 856 (10th Cir. 1991).
10th Circuit vacates “additional fine” because no “punitive fine” was imposed. (630) The 10th Circuit vacated a fine of $80,633 for the cost of incarceration and the cost of supervised release imposed upon defendant. Under U.S. v. Labat, 915 F.2d 603 (10th Cir. 1990), where a “punitive fine” has not been imposed under guideline § 5E1.2(a) because of the defendant’s inability to pay or burden to the defendant’s dependents, then a district court may not impose an “additional fine” under § 5E1.2(i) for the costs of incarceration. U.S. v. Estrella, 930 F.2d 824 (10th Cir. 1991).
10th Circuit reverses fine that exceeded guideline range. (630) On appeal, defendant objected to the alternative fine of $225,000. Since he had not objected to the amount of the fine in the district court, the 10th Circuit reviewed the sentence only for plain error. The court found that the district court had committed obvious error in selecting the appropriate fine range under the guidelines. The maximum fine was governed by the fine table in § 5E1.2(c), which provided for a maximum fine of $50,000, unless defendant was convicted under a statute authorizing a maximum fine “greater than $250,000.” Defendant was convicted of violating a statute with a maximum fine of $5,000. The alternative fine statute provided that a fine of “not more than $250,000” may be imposed if the defendant was convicted of a felony. The 10th Circuit found that even if the reference to “the statute under which ‘the defendant is convicted’ could be construed to include the alternative fine statute,” a “maximum fine greater than $250,000” is not the same as a fine “not more than $250,000.” Therefore, $50,000 was the maximum fine permissible. U.S. v. Smith, 919 F.2d 123 (10th Cir. 1990).
10th Circuit reverses fine for reimbursement of costs of incarceration where court refused to impose a punitive fine. (630) Defendant’s presentence report concluded that defendant had a limited ability to pay a fine on an installment basis at the lower end of the guideline range, but that defendant should be considered indigent for purposes of imposing an additional fine for reimbursement of the costs of incarceration under guideline § 5E1.2(i). The district court imposed a fine in excess of $110,000, which the court stated was for incarceration and supervision. The 10th Circuit found that the fine for reimbursement was improper because the district court, in not imposing a punitive fine, had implicitly determined that defendant was financially unable to pay a fine. U.S. v. Labat, 915 F.2d 603 (10th Cir. 1990).
10th Circuit upholds $32,291 fine imposed upon drug conspirator. (630) Defendant pled guilty to conspiring to possess cocaine, and received a sentence that included a fine of $32,291. Defendant contended that the fine was an abuse of discretion since he lacked the financial ability to pay it. Defendant had no substantial assets and a net income of $1000 per month, of which $605 was to be paid in child support. The 10th Circuit rejected defendant’s argument, finding that guidelines sections 5E1.2(e) and 5E1.2(i) mandate a punitive fine that is at least sufficient to cover the costs of defendant’s incarceration and supervision. Although a court must consider a defendant’s ability to pay, “the Guidelines impose no obligation to tailor the fine to the defendant’s ability to pay.” The 10th Circuit also rejected defendant’s argument that guidelines § 5E1.2(i), which requires a defendant to pay the costs of incarceration, violated equal protection principles. U.S. v. Doyan, 909 F.2d 412 (10th Cir. 1990).
11th Circuit reverses fine in health care fraud case that violated Apprendi. (630) Defendant was convicted of multiple health care fraud charges. He was sentenced under 18 U.S.C. § 3571, which provides two alternative maximum fine amounts. Under § 3571(b), a defendant may be fined a maximum of $250,000 for each felony conviction. Under § 3571(d), “[i]f any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss….” The court calculated the statutory maximum fine under § 3571(d) as $14,062,101.36, twice the $7,031,050.68 gross loss the court found resulted from the offense. The district court then imposed a $3 million fine. Defendant argued for the first time on appeal that the $3 million dollar fine violated Apprendi v. New Jersey, 530 U.S. 466 (2000), because it exceeded the statutory maximum without a jury finding on loss. The Eleventh Circuit agreed, and reversed. After defendant was sentenced, the Supreme Court held that that “the rule of Apprendi applies to the imposition of criminal fines.” Southern Union Co. v. U.S., 132 S.Ct. 2344 (2012). Because the jury convicted defendant of ten felonies, the maximum fine amount authorized by the facts the jury found was $2,500,000. The imposition of a $3 million fine, without a jury finding, was therefore error. U.S. v. Bane, 720 F.3d 818 (11th Cir. 2013).
11th Circuit remands for explanation of fine where PSR concluded defendant lacked ability to pay fine. (630) The PSR contained a detailed financial analysis of defendant’s assets and concluded that he lacked the ability to a pay a fine in addition to mandatory restitution. Nonetheless, the district court imposed a $250,000 fine. Defendant argued that he met his burden regarding his inability to pay a fine. The government argued that, during trial, the district court learned of defendant’s bank record and his lavish lifestyle, but conceded that the fine was otherwise unsupported by the record. The Eleventh Circuit remanded. The court imposed a fine of more than three times the maximum fine provided for in the Guidelines without providing any reasoned basis and without explaining why the PSR’s conclusion about defendant’s inability to pay was incorrect. U.S. v. Gonzalez, 541 F.3d 1250 (11th Cir. 2008).
11th Circuit upholds fine departure where loss and twice the gain to defendant exceeded guideline range. (630) Defendant was convicted of failing to pay income taxes for the years 1981 through 1988. The guideline range for a fine was $7500 to $75,000 under guideline § 5E1.2(c)(3). The district court found that defendant was able to pay a fine and departed upward, imposing a fine of $250,000, the statutory maximum for his offense. The Eleventh Circuit affirmed the fine, rejecting defendant’s claim that he lacked the ability to pay it. The PSR outlined defendant’s financial situation based upon interviews with defendant’s wife and other witnesses. It also provided information with respect to the other factors enumerated in § 5E1.2 and concluded that defendant was able to both pay a fine and satisfy outstanding tax liabilities. At the time of trial, defendant admitted that he had $400,000 to $450,000 in a bank in the Bahamas, and that he had spent over a decade moving his assets offshore and into the names of nominee owners. Although defendant argued at sentencing that he had sold the assets listed in the PSR, he presented no documentation of these transfers nor testimony as to what had happened to the proceeds. Moreover, the amount of departure in this case was specifically contemplated by the guidelines. Note 4 to § 5E1.2 authorizes an upward departure from the fine guideline where two times either the amount of gain to the defendant or the amount of loss caused by the offense exceeds the maximum of the fine guideline. The tax loss in this case was $544,555 and the total actual loss to the government exceeded $3 million. U.S. v. Hunerlach, 258 F.3d 1282 (11th Cir. 2001).
11th Circuit remands where special assessment violated ex post facto clause. (630) Both parties agreed that the district court erred in levying a special assessment of $100 per count against defendant under 18 U.S.C. § 3013(a) (2)(A). The statutory special assessment for the crimes of which defendant was convicted was raised from $50 to $100 for offenses taking place on or after April 24, 1996. Although defendant was convicted after that date, all of the offenses of conviction were committed prior to that date. Because the ex post facto clause forbids retroactive application of criminal sanctions, the Eleventh Circuit vacated the special assessment and remanded for recalculation at the rate of $50 per count. U.S. v. Prather, 205 F.3d 1265 (11th Cir. 2000).
11th Circuit upholds fine despite lack of specific findings. (630) Defendant pled guilty to bankruptcy fraud. He argued that he was unable to pay a $15,000 fine. Although the PSR stated that defendant could not pay a fine, defendant’s attorney did not object at sentencing to the fine. The Eleventh Circuit upheld the fine, even though it was unclear what factors the court relied upon in imposing the fine. Had defendant objected, the court could have addressed more specifically its reasons for imposing the fine. However, the record suggested that defendant might be able to pay a $15,000 fine. Defendant owned a $500,000 home and a $500,000 yacht immediately before seeking bankruptcy relief. Defendant also was waiting until after the bankruptcy proceedings concluded to accept the remaining payments due on his sale of a franchise. Finally, his unwillingness to answer specific questions about his financial dealings suggested that he was still concealing assets from the bankruptcy trustee. U.S. v. Hernandez, 160 F.3d 661 (11th Cir. 1998).
11th Circuit says court need not distinguish criminal histories in sentencing outside guidelines. (630) Defendants were convicted of reentering a military base after having been removed, a Class B misdemeanor not subject to the Sentencing Guidelines. The district court sentenced all defendants to the maximum six months’ imprisonment and imposed a $3,000 fine on each. They argued that their sentences were plainly unreasonable because the district court failed to individualize their sentences. Some defendants were repeat offenders and others were not, but they all received the same sentence. The Eleventh Circuit affirmed because under extra-guidelines law, the district court is not bound to respect any difference in criminal histories. Since each defendant made a defiant political statement at sentencing, promising to break the law again, it was not unreasonable for the court to conclude that a six-month sentence was necessary. The court also was authorized under extra-guidelines law to impose a fine without a finding of ability to pay. Although the court must consider the defendant’s income, earning capacity and financial resources, there was no suggestion that the court failed to do so. The fine was intended to dissuade defendants from future protesting. U.S. v. Bichsel, 156 F.3d 1148 (11th Cir. 1998).
11th Circuit upholds departure because two times gain to defendant exceeded fine guideline. (630) Defendant was the owner and chief executive officer of a home health care provider that submitted falsified Medicare claims to a fiscal intermediary. The district court departed upward from a fine range of $7500-$75,000 to a fine of $2.5 million because defendant profited substantially from her involvement in the offense and the sale of her company. Defendant contended that the fine was unreasonable. The Eleventh Circuit upheld the large fine. Note 4 to § 5E1.2 provides that where two times either the amount of gain to the defendant or the amount of loss caused by the offense exceeds the maximum of the fine guideline, an upward departure may be warranted. Defendant’s net worth was $14 million. She was to net an estimated $14 million from the sale of the company after all her obligations to the government and the company’s creditors were paid. Over 90 percent of the company business was reimbursed by Medicare, which defendant had bilked for years to cover personal expenses, employees’ salaries for non-Medicare work, and even political contributions. The departure was not based on socioeconomic status or the publicity surrounding the case. Given defendant’s substantial profits over time from her Medicare fraud, the district court properly believed that the highest applicable fine was not sufficient to punish defendant’s crime. U.S. v. Garrison, 133 F.3d 831 (11th Cir. 1998).
11th Circuit upholds $2,000 fine based on current financial situation and future prospects. (630) Defendant argued that the district court erred in imposing a $2,000 fine without making explicit findings as to his ability to pay a fine. He contended that he was indigent and lacked the ability to pay a fine. The Eleventh Circuit affirmed because the record clearly indicated that the district court considered defendant’s current financial situation and future prospects. The fine was a downward departure from the guideline range of $10,000 to $100,000. Moreover, the court allowed defendant to pay the fine on the terms ordered by the probation office while defendant served his term of supervised release. Over the course of defendant’s 3 years of supervised release, he would have to pay less than $56 per month, plus interest, to pay the fine. U.S. v. Long, 122 F.3d 1360 (11th Cir. 1997).
11th Circuit holds that court should have resolved defendant’s objection concerning ability to pay fine. (630) Defendant argued that he was unable to pay the $175,000 fine imposed by the district court. The Eleventh Circuit found that the court considered the pertinent factors before imposing the fine; however, it erred in imposing the fine without ruling on defendant’s challenge to the PSR’s accuracy. Defendant contended that he repeatedly objected to the financial information in the PSR and submitted a financial statement to the probation office showing that he had no money. The PSR that was part of the record on appeal did not state whether the probation officer received a financial statement and did not address defendant’s original objection. The court did not address defendant’s allegation at sentencing that he submitted a financial statement and that the PSR was inaccurate. The district court cannot simply adopt a PSR without ruling on unresolved objections specifically brought to its attention. U.S. v. Khawaja, 118 F.3d 1454 (11th Cir. 1997).
11th Circuit bars court from waiving fine if defendant completes term of imprisonment. (630) The district court ordered that if defendant served his full prison sentence, his fine would be waived. The Eleventh Circuit rejected the waiver. There is no provision in the guidelines or the statute for the expiration of a fine based on a defendant’s service of his full term of incarceration. The guidelines require a fine except for defendants unable to pay a fine. U.S. v. Mueller, 74 F.3d 1152 (11th Cir. 1996).
11th Circuit affirms cost of imprisonment fine. (630) Defendant argued that § 5E1.2(i) (authorizing a cost of imprisonment fine) conflicted with 18 U.S.C. § 3553(a) (a sentence shall not be greater than necessary), since § 5E1.2(i) imposes an additional fine on top of the fine range in § 5E1.2(c). The Eleventh Circuit upheld the validity of § 5E1.2(i), concluding that fining criminals on the basis of their term of imprisonment is a rational means to assist victims of crime collectively. The Third Circuit’s opinion in U.S. v. Spiropoulos, 976 F.2d 155 (3d Cir. 1992) (striking down § 5E1.2(i)) has been rejected by every other circuit to consider the issue. U.S. v. Price, 65 F.3d 903 (11th Cir. 1995), abrogated on other grounds by Koon v. U.S., 518 U.S. 81 (1996).
11th Circuit holds that money paid by defendant must be applied first to restitution and then to fine. (630) The district court ordered defendant to pay a $100,000 fine within 30 days and make restitution of $400,000 after his release from prison. The Eleventh Circuit remanded for the district court to order the restitution to be paid before the fine. Section 5E1.2(c) states that if a defendant is ordered to make restitution and pay a fine, the court shall order that any money paid by the defendant shall first be applied to satisfy the order of restitution. On remand, because the defendant would no longer be paying the fine immediately, the court could order the restitution payments accelerated. U.S. v. Lombardo, 35 F.3d 526 (11th Cir. 1994).
11th Circuit rejects need for explicit findings on each fine factor listed in guidelines. (630) The district court imposed a $100,000 fine on defendant, but did not explicitly discuss the seven factors it was required to consider under § 5E1.2(d). The Eleventh Circuit held that the court’s failure to make specific findings on the listed factors was not error. The guidelines require only that the court consider the factors listed in § 5E1.2(d). The record contained sufficient information with respect to the seven factors for the appellate court to conclude that the fine was proper. Defendant did not prove he was unable to pay the $100,000. He provided no documentary support for his claim that he was in bankruptcy. He also provided no documentation for the alleged transfer of his house to his wife. According to defendant’s tax returns, his income for 1988-1990 was $74,714, $35,904, and $236,423, respectively. He was the sole owner of a thoroughbred race horse business, and was a partner in a government securities brokerage. There was sufficient information from which the court could conclude that defendant’s business sense and acumen would allow him to accumulate a comfortable income in the future. U.S. v. Lombardo, 35 F.3d 526 (11th Cir. 1994).
11th Circuit says fine for cost of imprisonment may not be imposed absent punitive fine. (630) The 11th Circuit held that a court may assess a fine under section 5E1.2(i) to cover the cost of imprisonment and supervision only if the court first imposes a punitive fine under section 5E1.2(a). Section 5E1.2(i) states that costs of imprisonment and supervision shall be assessed as an additional fine amount. U.S. v. Norman, 3 F.3d 368 (11th Cir. 1993).
11th Circuit says contempt fine was improper where defendant served term of imprisonment. (630) Defendant pled guilty to criminal contempt, in violation of 18 U.S.C. section 401(3). This authorizes punishment “by fine or imprisonment.” The district court sentenced defendant to six months in prison and a fine a $3,184.84. Defendant served her prison term but did not pay her fine, arguing that since she served a sentence of imprisonment the fine was improper under the statute. The 11th Circuit agreed. Although the guidelines provide for the imposition of fines in most circumstances, the guidelines cannot and do not authorize the imposition of a fine in contravention of express statutory authority. Defendant could not be both fined and imprisoned for violating section 401. U.S. v. White, 980 F.2d 1400 (11th Cir. 1993).
11th Circuit vacates $100,000 fine because district court did not discuss factors which might justify it. (630) The 11th Circuit vacated a $100,000 fine and remanded the case for further consideration since the record was insufficient to determine whether the fine was an appropriate amount. The district court imposed the fine without an explicit discussion of the factors that might justify the fine. U.S. v. Paskett, 950 F.2d 705 (11th Cir. 1992).
11th Circuit finds that imposition of $100,000 fine violated plea agreement. (630) Defendant’s plea agreement was silent with respect to imposing a fine. However, the original draft of the agreement explicitly left the issue of a fine to the discretion of the court, and this reference was deleted after the government orally agreed that no fine would be imposed. The district court subsequently imposed a $100,000 fine. The 11th Circuit found that, based on the intent of the parties, the plea agreement precluded the imposition of the fine. U.S. v. Jefferies, 908 F.2d 1520 (11th Cir. 1990).
11th Circuit vacates $50,000 fine for lack of evidence that defendant had undisclosed assets. (630) In sentencing a drug defendant, the court imposed a $50,000 fine because he had been apprehended with $35,000 in his possession. The 11th Circuit reversed, finding no evidence that the defendant had any undisclosed assets. Even if the $35,000 belonged to him, he no longer had access to it to pay a fine. Moreover, prior to his arrest, defendant earned $100 to $120 dollars per week from his car restoration business. He had to pay child support obligations and was represented by appointed counsel. The case was remanded for resentencing. U.S. v. Rowland, 906 F.2d 621 (11th Cir. 1990).
D.C. Circuit agrees that defendant could pay a $500,000 fine. (630) Defendant was convicted of securities and wire fraud in connection with a “pump and dump” stock scheme. The D.C. Circuit upheld a $500,000 fine, rejecting defendant’s claim that he could not pay it. Defendant claimed $651,541 in various accounts and stock worth about $1.5 million. The court acknowledged a dispute between defendant and a co-defendant over the stock, and because of this uncertainty, rejected the government’s request for a larger fine. The court also reasoned that defendant might not have to pay the entire $1.9 million in restitution, given that some injured investors would not ever seek restitution, and that defendant’s co-defendants were jointly and severally liable for whatever amount was claimed. Moreover, the record suggested that defendant was less than forthright with the court about the state of his finances. Defendant claimed a net worth of more than $2 million, would be in his mid-40s when released, and was a college graduate and a licensed pilot. The record supported the court’s finding that defendant was able to likely to become able to pay the fine imposed. U.S. v. Gewin, 471 F.3d 197 (D.C. Cir. 2006).
D.C. Circuit says Apprendi errors did not affect special assessments. (630) The D.C. Circuit found the Apprendi errors on two counts were harmless because the sentence on these counts were concurrent to a sentence on a count that had no Apprendi error. Of course, special assessments of $100 are mandatory for all felony convictions under 18 U.S.C. § 3013(a)(2)(A) and therefore these special assessments were not concurrent. But the court noted that the special assessments “would be the same no matter what term of imprisonment [defendant] received on remand. The Apprendi errors on these two counts were therefore “irrelevant to the special assessments.” The panel distinguished this case from Ray v. U.S., 481 U.S. 736 (1987) (per curiam), which spelled the death knell for the concurrent sentence doctrine as applied to review of convictions. Unlike Ray, the defendant here did not challenge his convictions so special assessments would be imposed even if the sentences on these counts were reduced. U.S. v. Agramonte, 276 F.3d 594 (D.C. Cir. 2001).
D.C. Circuit says fine properly deposited into non-interest bearing Crime Victims Fund. (630) Defendant’s original sentence included a fine of $1.5 million and a special assessment of $1,225. Defendant paid the fine and special assessment and the Clerk of the Court deposited the money into the Crime Victims Fund. Defendant’s gratuities conviction was then reversed on appeal. Defendant’s new sentence included a fine of only $36,000 and a special assessment of $1,025. The district court ordered a refund of the difference in the principal amount of the fine and assessment, but rejected defendant’s request for interest. The court rejected defendant’s claim that Fed. R. Crim. P. 38(c) and Local Rule 67.1(b)(1) required the deposit of the original fine into an interest-bearing account. The D.C. Circuit agreed that the original fine and assessment were properly deposited into the non-interest bearing Crime Victims Fund, even though the conviction and sentence were being appealed. The section of the Victims of Crime Act that established the Crime Victims Fund states that “there shall be deposited into the Fund … all fines that are collected from persons convicted of offenses against the United States.” 42 U.S.C. § 10601(b)(1). The provision does not make any exceptions for criminal fines that are being appealed. The district court’s order that the criminal fine be paid to “the registry of the court” was consistent with the deposit of the fine, but way of the registry of the court, into the Crime Victims Fund. U.S. v. Sun Growers of California, 212 F.3d 603 (D.C. Cir. 2000).
D.C. Circuit upholds $360,000 fine where defendant refused to provide financial information. (630) Defendant argued that the finding that he could pay a $360,000 fine was clearly erroneous. The D.C. Circuit disagreed, finding the record supported defendant’s ability to pay a substantial fine. Defendant received more than $900,000 from his enterprise, and the record did not show that he ever disposed of those funds. The absence of evidence of his present financial condition was directly attributable to his diversion of funds and his refusal to provide any financial information or releases. Defendant bore the burden of establishing an inability to pay. Having made no effort to carry his burden, he could not argue that the fine was beyond his means. U.S. v. Sobin, 56 F.3d 1423 (D.C. Cir. 1995).
D.C. Circuit upholds sentence despite incorrect advice at plea hearing of maximum fine. (630) At defendant’s plea hearing, the district court incorrectly advised defendant that he faced a maximum fine of $250, when the maximum fine was actually $250,000. The court ultimately imposed a $135,000 fine. The D.C. Circuit upheld the sentence because defendant would not have refrained from pleading guilty had the court stated the fine correctly. Defendant either knew the correct maximum and was not misled by the court’s statement or did not consider the amount of the fine a serious factor in his decision to plead guilty. Defendant was accurately advised of the fine at his arraignment, and his PSR correctly stated the fine. Moreover, neither defendant nor his counsel expressed any surprise when a $150,000 penalty was discussed at the sentencing hearing, or when the judge actually imposed the $135,000 fine. U.S. v. Lyons, 53 F.3d 1321 (D.C. Cir. 1995).
D.C. Circuit says defendant should have disclosed zero-equity interest in property. (630) To permit evaluation of defendant’s ability to pay a fine, the probation office required defendant to list her assets. Defendant failed to disclose her ownership of property in which she later claimed to have no equity. The district court relied on this omission in finding obstruction of justice, and the D.C. Circuit affirmed, concluding that the omission was “material.” Defendant’s ability to service the loan would in itself be relevant in determining defendant’s ability to pay a fine, and the determination of the amount of equity in a home is an imprecise endeavor. The D.C. Circuit expressed doubt about U.S. v. Belletiere, 971 F.2d 961 (3d Cir. 1992), in which the court concluded that a defendant’s presentence denial of drug use did not obstruct justice because it did not involve the charged offense of drug distribution and because it was independently sanctioned through bail revocation. U.S. v. Smaw, 993 F.2d 902 (D.C. Cir. 1993).
D.C. Circuit rules district court need not make express findings concerning defendant’s financial ability to pay fine. (630) Defendants challenged their $5,000 fines, claiming error in the district court’s failure to consider or make specific findings concerning their financial ability to pay the fines. The D.C. Circuit affirmed the fines, ruling that a district court need not make specific findings concerning a defendant’s financial ability to pay a fine, and that the district court did consider defendants’ ability to pay a fine. The judge expressly took into consideration the presentence report, which detailed defendants’ financial situation. Each defendant’s counsel presented his client’s financial situation to the judge, who stated he was “not so sure” of the defendants’ inability to pay. It was not clearly erroneous to find that defendants could pay such a fine. Although currently unemployed and without substantial assets, each defendant was a healthy high-school graduate with additional vocational training. U.S. v. Mastropierro, 931 F.2d 905 (D.C. Cir. 1991).
Commission deletes requirement of separate fine for costs of imprisonment. (630) Recognizing that a fine for costs of imprisonment and supervision is not statutorily required and is rarely imposed, the Commission adopted an amendment to dispense with the requirement that courts determine a separate, additional fine for such costs. Instead, the amendment provides that the court shall take such costs into consideration in determining the punitive fine. This amendment indirectly addresses a circuit conflict over whether a court may impose a fine for costs of imprisonment and supervision when it has not imposed any punitive fine. Compare, U.S. v. Labat, 915 F.2d 603 (10th Cir. 1990) (requiring imposition of punitive fine before costs of imprisonment fine can be imposed) with U.S. v. Sellers, 42 F.3d 116 (2d Cir. 1994) (not requiring imposition of punitive fine before ordering costs of imprisonment fine), cert. denied, 116 S.Ct. 93 (1995). Amendment 572, effective November 1, 1997.
Commission raises felony assessments to $100 for individuals and $400 for organizations. (630) Section 210 of the Antiterrorism and Effective Death Penalty Act, Pub. L. 104-132, 110 Stat. 1240, and section 601(r)(4) of Pub. L. 104-294, 110 Stat. 3502, raised the special assessments for each felony conviction for offenses committed after April 24, 1996, to $100 for individuals and $400 for organizations. In response, the Commission adopted an amendment raising §§ 5E1.3 (Special Assessments) and 8E1.1 (Special Assessments—Organizations) to conform to the statutory changes. Amendment 573, effective November 1, 1997.
Congress increases special assessment to $100 per felony for individuals. (630) Effective April 24, 1996, Congress increased the $50 special assessment on convicted persons under 18 U.S.C. § 3013. The special assessment is now $100 per felony count for individuals and $400 per felony count if the defendant is a person other than an individual. Guideline § 5E1.3 was amended to reflect this change.
Article reviews fines to cover cost of imprisonment. (630) A student author reviews the issues raised by § 5E1.2(i), which authorizes the imposition of a fine to cover the cost of a defendant’s imprisonment. The author notes disagreement among the courts of appeals about the constitutionality of the provision and argues that it should be held constitutional. In addition, a number of other issues regarding the provision are addressed, including the permissibility of a fine under this section when no fine is imposed under § 5E1.2(c), the effect of indigency on a decision to impose the fine, the burden of proving indigency, and the appropriate standard for reviewing the district court’s decision. Comment, Prisoners Paying for the Costs of Their Own Incarceration: United States Circuit Courts of Appeal Spar Over the Validity and Application of United States Sentencing Guidelines § 5E1.2(i), 99 Dickenson L. Rev. 221-64 (1994).
Fines may include costs of imprisonment. (630) The Violent Crime Control Act of 1994, in § 20403, provides that a fine may include “the expected costs to the government of any imprisonment, supervised release, or probation.” This is apparently in response to the 3rd Circuit’s decision in U.S .v. Spiropoulos, 976 F.2d 155 (3rd Cir. 1992), which held that a fine under U.S.S.G. § 5E1.2 for the costs of imprisonment, was not authorized by the Sentencing Reform Act of 1984.
Commission simplifies fine guideline. (630) The November 1, 1991, amendments simplified section 5E1.2 by eliminating the determination of loss and gain in the calculation of the fine guideline range. As reflected in new Application Note 4, the Commission envisions that for most defendants, the maximum from the fine table in subsection C will be at least twice the amount of gain or loss resulting from the offense.