Sunday, April 30, 2017

Case o' The Week: Not Charged, But Still You Pay - Donald Johnson and MVRA restitution

 Uncharged crimes, federal dimes.
United States v. Donald "Ski" Johnson, 2017 WL 1416490 (9th Cir. April 21, 2017), opinion available here.

Players: Decision by Judge Callahan, joined by Judge Paez and D.J. England. Hard-fought appeal by Michael Donahoe, Sr. Litigator, Federal Defenders of Montana.

Facts: Johnson used an alias to promote a (fraudulent) black-tie charity event in Seattle. Id. at *1. He pocketed about $9,300. Id.
  Using a different alias, Johnson pulled off another charity-fraud scheme in Florida. Id.
  Then, using the Florida alias, he tried again in Montana and was caught. Id. Johnson was indicted in Montana with one count of § 1343 – wire fraud. Id.
  Although the indictment alleged the scheme occurred in Montana “and elsewhere,” it referenced only a single wire, associated with the Montana attempt. Id. at *2. Johnson successfully moved in limine to limit the government’s proof to only the Montana event. Id. (Note - based on later Ninth Circuit law, the court probably improperly excluded this as prohibited 404(b)(2) evidence. Id. at 2 & fn. 2).
  Thought Johnson was only convicted of the Montana wire, the government sought restitution for the Seattle and Washington fraud events. Id. The district court declined, and only imposed restitution for the Montana fraud. Id.
  The government appealed.

Issue(s): “[T]he government argues that the district court erred by considering only Johnson’s fraudulent conduct that occurred in Montana (the count of conviction) when determining restitution, and thus misinterpreted the Mandatory Victim Restitution Act (‘MVRA’). See 18 U.S.C. § 3663A.” Id. at *1.

Held: Under 18 U.S.C. § 3663A and Ninth Circuit precedent, the district court could properly order restitution for all victims harmed by Johnson’s scheme, including those harmed by conduct beyond the count of conviction. Accordingly, we vacate the district court's restitution order and remand for the court to make factual findings to determine whether Johnson’s activities beyond the [Montana] event are sufficiently related to be included for restitution purposes in Johnson’s overall scheme to defraud.” Id. at *3.

Of Note: The district court agreed with the defense and kept this fraud trial a Montana case, tried to a Montana jury: Seattle and Florida events were excluded. The AUSA could have appealed -- unlike the defense, the government can bring an interlocutory appeal of evidentiary rulings. Id. at *2 (citing United States v. Loftis, 843 F.3d 1173, 1175-76 (9th Cir. 2016)).
  But the government didn’t.
  Having waived that interlocutory appeal, could the government later argue these “outside the conviction” frauds when seeking restitution? Yep.
  Judge Callahan rejects the defense pitch that the government’s failure to bring an interlocutory appeal limited the government’s post-conviction, restitution appeal. Id. at *2. The government’s failure to raise an interlocutory appeal does not bar raising the decided issue after entry of a final judgment. In Johnson, that was the case even though the restitution order “flows from the same issue as the district court’s evidentiary hearing.” Id.
  There are rational reasons for these double-standards around interlocutory appeals (double-jeopardy being foremost) . . . but this line of law is nonetheless perpetually galling.

How to Use: Thought the AUSA failed to argue it, the law at the time of this restitution hearing was clear that fraud conduct beyond the count of conviction can be used for MVRA restitution. Id. at 3 & n.4. 
  It isn’t new law, but the rule is worth adding to the research file: “restitution may be ordered for all persons directly harmed by the entire scheme and is thus not confined to harm caused by the particular offenses for which the defendant was convicted.” Id. at *3 (quotations and citation omitted).
For Further Reading: Will NorCal be flooded with § 1326 cases? Well, it got a little harder for ICE to trigger the tsunami last week, when the Hon. William H. Orrick issued a preliminary injunction against Executive Order 13768.
  While many have applauded WHO for his decision, fewer have actually read the (admirable) order. Interestingly, it is quite restrained – as Judge Orrick explains, “The Counties’ motions for preliminary injunction against Section 9(a) of the Executive Order are GRANTED as further described below. That said, this injunction does nothing more than implement the effect of the Government’s flawed interpretation of the Order.”
  The opinion that has made the Northern District (or rather, “the Ninth Circuit”) the latest Tweet-target can be found here.

Steven Kalar, Federal Public Defender N.D. Cal. Website at


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