United States of America v. Astra Motor Cars, Inc.

Filing 920110224

Opinion

10-520-cr(L) USA v. Pescatore

10-0520-cr(L), 10-0615-cr(con) USA v. Pescatore

10-0520-cr{L) ,
10-0615-cr{con)
USA v. Pescatore

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UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

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4

August Term, 2010 (Submitted: January 3, 2011 Decided: February 23, 2011)

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Docket Nos. 10-0520-cr{L), -0615-cr

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UNITED STATES OF AMERICA, Appellee, - v. MICHAEL PESCATORE, Defendant-Appellant. Before: KEARSE, WINTER, and HALL, Circuit Judges. Appeal from an order of the United States District Court for the Eastern District defendant's of New York, Thomas for C. an Platt, order Judge, either

denying

postconviction

motion

compelling the government to use a portion of his forfeited assets to satisfy his restitution obligations, or vacating so much of the judgment of conviction as ordered him to pay restitution in excess of his victims' actual losses. Affirmed, and remanded for further proceedings. LORETTA E. LYNCH, United States Attorney for the Eastern District of New York, Brooklyn, New York (Varuni Nelson, Beth P. Schwartz, Kathleen A. Nandan, Assistant United States Attorneys, Karen R. Hennigan, Special Assistant United States Attorney, Brooklyn, New York, of counsel), for Appellee.

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2

JAMES

R. FROCCARO, Jr., Port Washington, York, for Defendant-Appellant.

New

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KEARSE, Circuit Judge: Defendant Michael Pescatore, who was convicted of

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operating chop shops in violation of 18 U.S.C.

§§ 2322 and 2, and

of extortion offenses in violation of 18 U.S.C. §§ 1951 and 2, and who, $2.5 in his plea agreement with the government, agreed to forfeit million in cash, plus certain real estate, and to pay

restitution in an amount not less than $3 million, appeals from an order of the of United New York, motion States Thomas for an District C. Court for the Eastern his the

District

Platt,

Judge,

denying

postconviction

order

either

compelling

government to use a portion of his forfeited assets to relieve him of his restitution obligations,
§

a process

called

"restoration,

II

18 U.S.C. the

981 (e) (6), judgment

or vacating as illegal the requirement in of conviction that he pay $3 million in

amended

restitution, suffered by

to the extent that that sum exceeds the total losses his identified chop (1) shop victims. On appeal,

Pescatore contends principally

that the government should be

compelled to use a portion of the forfeited assets to satisfy his restitution obligations because no law prohibits such restoration;
(2 )

that

the is

judgment illegal listed to in

ordering the the

him

to that

pay the

$3 total

million amount

in of

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restitution victim ("PSR")

extent pages

losses that

of

the

presentence

report

are attached to the amended (3)

judgment

is less than

$3 million; and

that his obligation should be further reduced
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1

because the actual amount of victim losses totals even less than the amount (1) shown in the PSR. In opposition, the government

2

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argues

that the decision whether to grant Pescatore relief in

the form of restoration lay solely within the Attorney General's discretion, which was not abused; conviction reduced (2) that the amended judgment of restitution obligation to (3)

Pescatore's

$2,559,611.79 to match the losses identified in the PSR; and

that any contention that the $2,559,611.79 figure is erroneous is subject to plain-error analysis and does not meet that standard. For the reasons that follow, we conclude that the district court did not that that the err in rej ecting Pescatore's restoration request; judgment did not ordered to reduce in the $3 million amount and that

amended

Pescatore

was

pay

restitution;

Pescatore is not entitled to an immediate--if any--order excusing him from paying that amount. The amount to be paid is limited to

the restitution amounts needed to make Pescatore's victims whole, plus interest that Pescatore is obligated to pay on the properly ordered 18 U.S.C. restitution
§

amounts plus

that

he

has

not to

timely

paid,

see

3612 (f) (1),

any penalties

which he

may be

subj ect for unpaid resti tution amounts as to which he is or was delinquent and/or in default, see id. all required payments of restitution, related penalties total less
§§

3612 (g), 3572(h) -(i).

If

interest,

and restitutionPescatore will be

than $3 million,

entitled to a refund of the remainder.

Accordingly, we affirm the

denial of Pescatore's motion but remand for further proceedings.

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1.

BACKGROUND

2

To the extent relevant to the present case,

Pescatore was

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first arrested, by law enforcement officers of Suffolk County, New York, Inc. in mid-2003. ("Astra"), He and others, including Astra Motor Cars,

of which Pescatore was president and 50 -percent

owner, were indicted by a New York State grand jury on charges of fraud law; and Astra enterprise was also corruption in violation of New York State indicted on state-law charges of money

laundering. civil

In late 2003, to and

the United States commenced an in rem 18 U.S.C. (7) (the
§§

action pursuant
§§

981(a) (1) (A)

and

(C)

and

21 U.S.C.

881 (a) (6)

"civil

forfeiture

action")

against several properties owned In whole or in part, directly or indirectly, by Pescatore, including one property leased to Astra. inter alia, stolen that Astra had and stolen

The complaint in that action alleged, engaged in illegal trafficking in

vehicles

vehicle parts and had defrauded customers. 322 Richardson Street, 24, 2003) No. 2:03-cv-6456-TCP or Astra

(See United States v. (E . D.N.Y. filed Dec.
~~

( "Forfei ture It also

Complaint" that

"complaint") sold to a

21-23,

56-93.) trafficking

alleged

narcotics that could

organization

specially-ordered

vehicles

accommodate hidden compartments; that Astra accepted large sums of cash from that organization; and that Astra's other owner, Sanford Edmonston, knew that the buyers were drug dealers and that the (See id. of the
~~

cash was proceeds of narcotics trafficking. 94-99.) The complaint sought
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19-20,

forfeiture

defendant

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5

properties

on

the

ground

that

they were

derived

from proceeds

traceable to "specified unlawful activity" within the meaning of 18 U.S.C. complaint.
§

1956 (c) (7),

including

the activities alleged in the
~~

(Forfeiture Complaint

100-62, 173-75.)

Pescatore, Astra, federal grand (the of jury in

and numerous others were indicted by a 2004. An 84-count second superseding inter
§

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indictment operation

"Chop

Shop

Indictment" ) - -alleging, in violation · of

al ia, 2322,

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chop

shops

18 U.S.C.

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alteration or removal of motor vehicle identification numbers in violation of id.
§

511,

mail

fraud

in violation of id.

§ §

1341, 371,

conspiracy to defraud the United States in violation of id. and money laundering in violation of id. in most of the counts. In February 2005, Pescatore was also charged,
§

1956 - -named Pescatore

in

SlX

counts of a new federal number of individuals.

indictment,

with extort ing money from a the extortion case was

In February 2006,

tried, and Pescatore was convicted on three of the six counts.

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A.

The Plea Agreement and the Judgment of Conviction In March 2006, pursuant to a plea agreement dated March 9,

2006

(the

"Plea

Agreement"

or

"Agreement"),

Pescatore

pleaded

guilty to one count of the Chop Shop Indictment

(count 22), which

charged him with owning, operating, maintaining, or controlling a chop shop, that, in violation of 18 U.S.C.
§

2322.

Pescatore admitted

in that operation from March 1987 through June 14, 2004, he

"engaged in receiving stolen motor vehicle parts" that were used
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1 2
3
4

II

to

rebuild 2006

damaged

motor

vehicles II

(Pl ea

Hearing

Transcript,

March 9, apart, also

(IIPlea Tr. II), at 19-20) and hired employees to take and sell such vehicles inter numbers alia, so that altering stolen (id. at 21). The scheme vehicle sold to

rebuild, involved,

and cars

removing could be

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identification

unwitting customers. The

(See id. at 22). was designed to settle not only the

Plea Agreement

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Chop Shop Indictment charges but also the civil forfeiture action and the punishment was to be imposed for the three counts on which in the extortion case. The advisory

Pescatore

convicted

Guidelines-recommended range of imprisonment for his chop shop and extortion government offenses agreed was to 188-235 drop the months. remaining In the Agreement, counts the

50-odd

alleged

against Pescatore in the Chop Shop Indictment and agreed that an appropriate total prison term for the chop shop offense and the extortion
~~

offenses

would

be

132

months.

(See

Plea

Agreement

4-5, 7.) In addition to agreeing to plead guilty to count 22 of the

Chop

Shop

Indictment,

Pescatore

agreed

to,

inter

alia,

pay

restitution of "no less than $3 million": The count [to which Pescatore agreed to plead guilty] carries the following statutory penalties:

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e. Restitution: In an amount to be determined by the Court, but no less than $3 million. The parties agree that restitution with respect to the defendant's tax liabilities may be ordered by the Court (18 U.S.C. §§ 3663 and 3663A).
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1

(Plea Agreement

~

1. e . ) .

The

final

sentence of

this provision

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applied to Pescatore's federal tax liabilities but became moot, as Pescatore paid that debt prior to being sentenced. In agreed to id.
~

settlement of forfeit $2.5

the civil million in

forfeiture cash, plus

action, real

Pescatore (see

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estate

9).

With respect to the assets to be forfeited, Office for the Eastern District

the United

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States ("USAO" Justice

Attorney's or

of New York

"Office") or

agreed to recommend that the Department of "Department") grant restoration, relieving

("DOJ"

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Pescatore of all or part of his restitution obligation: The Office will recommend that any net proceeds derived from the sale of the Forfeited Apsets be made available to eligible victims, pursuant to 18 U.S.C. § 981(e), 28 C.F.R. Pt. 9 and Attorney General Order No. 2088-97 (June 14, 1997), it being understood that the Office has authority only to recommend and that the final decision whether to grant such relief rests with the Department of Justice, which will make its decision in accordance with applicable law.
(rd.
~

17.) Pescatore was sentenced some
2~

years after his March 2006 2008 sentencing hearing,

plea

of

guilty.

At

the

October

24,

Pescatore informed the court that,

in the interim,

he had timely

turned over many millions of dollars in assets see Hearing Transcript, satisfaction of his January 29, 2010,

(worth $9 million, 18) he in complete urged the

at 17, and

forfeiture

obligations,

district court to impose a prison term of no more than 132 months in accordance with the Plea Agreement. MR. STAMBOULIDIS [Pescatore's then-counsel]

-

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We had entered an agreement with the government that's documented in that written plea agreement. We stand here with the government with little if any disagreement as to what should happen here today. As we indicated to the court in the plea agreement, and at the time of the plea the parties, the government and Mr. Pescatore, are asking for a concurrent sentence on both matters.

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We obviously are here to ask for the court's--to honor and accept the plea, which I believe you indicated in words or substance that you have no problem with, but obviously now that you have the benef i t of a presentence report and much more information than you had then to make up your mind. (Sentencing at 3-4.) The Pescatore to, court indicated that it was prepared to sentence Transcript, October
24,

2008

(II Sentencing

Tr. II) ,

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19

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21

inter alia,

132 months'

imprisonment in accordance

with the Plea Agreement, but it expressed concern that discussion in the PSR (id. "about at 180 months In custody confusing as to the the States that the agreed upon of

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amounts" Prisons. ("AUSAII)

11)

could and it the

prove

Bureau

Pescatore agreed that the

Assistant be

United

Attorney PSR be The

would

appropriate (See id.

26

amended to match

Plea Agreement.

at 12-14.)

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record does not indicate that any other objection had been made to the PSR. With regard to restitution, the government asked the court to order payment and of $3 million reminded in the accordance court that with the Plea had

Agreement,

Pescatore

the USAO

agreed to recommend restoration: [AUSA] GATZ:
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1

2
3
4

5 6 7 8
9

I just ask the court to enter a resti tution amount in the amount of $3 million as per the plea agreement, and the government does stand by its agreement to recommend concurrent sentences on both of the matters.

MR. STAMBOULIDIS: With respect to Mr. Pescatore being ordered to pay any more money, I just want to remind the court this man paid millions of dollars in forfeiture, agreed-upon forfeiture, ahead of schedule in many instances, as I indicated, and we had an understanding and I would ask the court to keep that in mind when it orders restitution that the forfeited moneys, the US Attorney's Office was going to make a recommendation to whoever the people are in Washington, main justice or whoever they are called, the people in Washington consider applying any forfeiture money he already paid in, including giving over his house and millions of dollars on top of that, to be applied to any restitution. THE COURT: If it's within the parameters.

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11

12 13

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I think they would regard it as supplement, any amount ordered here of the $3 million forfeiture [sic], which the government is seeking. I don't think they have to take it into account what's been paid heretofore. I may be wrong, that's right. Mr. Stamboulidis, but I think

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MR. STAMBOULIDIS: They don't have to, but they should and, I think, in many cases they do. MS. GATZ: Your Honor, as per the agreement the government negotiated it and we will stand by it. We will recommend that the $3 million restitution be taken from the prior forfeiture. However, I told Mr. Stamboulidis and the defendant is aware, we cannot require them to do that. We make the recommendation and they consider that. (Sentencing Tr. 14-16.) The government asked the court to order

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34

35

36
37

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40

41

that the $3 million in restitution "be paid in full by the close
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1 2
3

of the year 2009"

(id. at 21), a delay of some 14 months in light

of the restoration recommendation to be made by the USAO to the DOJ. Pescatore asked that the due date for payment be delayed so that he could would be made by

4
5

for at least three years rather than 14 months, receive credi t for resti tution payments that

6

codefendants in the interim. opposed that "calling restitution. request
II

(See id. at 21-24.)

The government

7

request, for (Id.

stating that the past

Pescatore's victims had been years asking for their

8

five

9

at 23.) the

The court granted the government's restitution be paid on or before

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and ordered that

December 31, 2009.

(See id. at 23-24.)

A judgment was entered sentencing Pescatore in accordance with the Plea Agreement. "restitution 2009." It ordered, be inter in alia, full
I,

that by the

"$3,000,000.00" in close of the The year

should

paid

Judgment order did

dated not

November or

2008,

at 4, 5. incorporate,

restitution

state,

otherwise

the names of the victims to whom restitution was to

be made or the amount of loss sustained by each victim. In January 2009, the government asked the court to correct the judgment pursuant to Fed. R. Crim. P. 36, in order to expressly incorporate the Pre-Sentence Report ("PSR") dated February 21, 2008, at pages 23-46 and 58-60, which identifies the victims and the actual losses incurred by each victim as a result of said schemes. The reason for thi s is, in order for the Asset Forfeiture and Money Laundering Section of the Department of Justice to process the restoration request submitted by this office pursuant to the applicable regulations, the judgment must specifically identify the victims. In that it was the parties' and the Court's intention that the victims identified in the PSR be included in the - 10

1 2 3 4
5

judgment, the government respectfully submi ts that the failure to do so was a clerical error which may be corrected at any time. (Letter from AUSA Kathleen Nandan to Judge Platt dated January 28, 2009 ("Government's January 2009 Letter"), at 1-2.) On January

6
7

30, 2009, the district court, noting the absence of any objection, granted the government's with PSR pages or appended request
lS

by endorsement. referred

(The to

judgment as the are

8 9 10

hereinafter the

"Judgment"

"amended

Judgment";

appended

PSR

pages

hereinafter referred to as the "Loss Chart" or "PSR Loss Chart".)

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B.

Pescatore's Motion To Compel Restoration or To Vacate and Modify the Restitution Requirement In April 2009, AUSA Nandan notified Pescatore that the DOJ

had denied the

restoration request.

Pescatore was subsequently

15 16 17
18

informed that Nandan could not disclose the reason for the denial because the Department considered the details of its response to the USAO to be privileged. In late October and early November 2009, Pescatore,

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26

represented by new counsel citing Santobello v. New York, 404 U.S. 257 (1971), moved in the district court for an order compelling as and,
~

restoration Agreement, declaring public

"specific

performance" sought a

of

~

17 of

of

the

plea nobis

alternatively, of the

writ

coram

1. e. to

the Agreement unenforceable as a extent that $3 million exceeds

matter of the total

policy

losses of Pescatore's chop shop victims motion") . In support of restoration,

("restoration/restitution

Pescatore pointed out that

27

the Plea Agreement stated that the DOJ would make its decision in - 11 -

1 2 3 4
5
6

accordance wi th appl icable law,

and he argued that it should be

compelled to apply a portion of his forfeited assets to satisfy his restitution obligation because no law forbade it to do so.

The government responded that there had been no breach of the Plea Agreement by the government. fulfilled its promise to The AUSA stated that the USAO had recommend 2010 restoration ("Motion Tr."), (see Motion ("We

7 8
9

Hearing Transcript,

January 29,

at 18

made a recommendation to the Department of Justice"; recommendation, denied because we made the request")) the defendant that
"[tl he

"we made the request was (id. ) ;

10 11 12
13

actually does

have

assets"

and that DOJ's decision to deny restoration "is not reviewable in a court of law" In restitution (id.) of his request pointed for out modification that the of the of and the

support order,

14 15 16
17

Pescatore

purpose

restitution is not punishment, that the losses listed in the

but compensation of victims, PSR Loss Chart attached to

Judgment

totaled less

than $3 million.

He also argued that in

18 19 20 21 22 23 24 25 26 27 28 29

reality the total amount of victims' losses was even less than the total indicated be by the Loss and Chart. that the He asked that the amount Plea be

Agreement

voided

restitution

recalculated to reflect the actual losses suffered by his victims. The government, in opposition to Pescatore's request for a reduction of his restitution obligation, stated, inter alia, that [tlhe Court's order of mandatory restitution in the amount of $3 million is consistent with the Mandatory Victim [sl Restitution Act and is the minimum amount agreed to in the plea agreement The plea agreement states that restitution shall be "in an amount to be determined by the Court, but no less - 12

1

2 3 4
5
6 7
8

than $3 million. 11 The Court properly considered the loss sustained by each victim as a result of the defendant's offenses, and properly incorporated the analysis set forth by the Pre-sentence Report. The defendant pled guilty, and was sentenced pursuant to an agreement with the government wherein resti tution of at least $3 million was agreed upon. The defendant was represented by counsel at sentencing who provided argument relative to restitution. The Court properly considered all relevant matters and ordered restitution in the lowest agreed upon amount. (Letter from Special AUSA Karen R. Hennigan to Judge Platt dated December 30, 2009 (IiGovernment's December 2009 Letter ll ) , at 2-3

9

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11

12 13
14

15
16

(emphasis in original) . ) At the January 29, 2010 hearing on Pescatore's motion,

17 18

the colloquy with respect to restitution included the following: MR. FROCCARO [Pescatore's new attorney]:

19 20 21 22 23
24

Your Honor, and this is in no way, shape, or form a reflection on your Honor, but in the parties' plea agreement there was an agreement that he would pay no less than $3 million in restitution. When he was sentenced, there was no probation list attached identifying the victims and the amounts of the losses.

25
26 27

28

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34

You went in accordance with the agreement, judge, with the understanding that there would be in actuality at least $3 million in losses. THE COURT: What? at least

MR. FROCCARO: That there would be $3 million in actual losses to the victims. THE COURT: time? Was

35
36

that raised at the sentencing

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1 2 3
4

MR. FROCCARO: You know, Judge, the lawyers didn't raise it. And I cited in my papers to your Honor that it is plain error that the lawyers- THE COURT: Whoa! Did anybody say to the court at the date of sentence that the $3 million figure which was mentioned, I guess I ordered it [] be paid by December 31, that that was in error? MR. FROCCARO: They didn't. And that was their mistake, Judge. And that constitutes plain error under Second Circuit case law. (MotionTr.4-5.) Froccaro argued that the victims' losses totaled (id. a "at

5 6 7 8 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

least $1.2 million less than what your Honor ordered" and al though (id. saying at 6), that he was unable to state

at 5);

"def ini te

figure" 1.8"

he said,
I

"Judge,

this loss is on the PSR for
I

(id.

at 18);

"Judge,

took a calculator out,

added up the at 22; but your

loss amount see id. at

in the PSR, 21
("I

and it added up to 1.8" agreed to the $1.8

(id.

never

million,

Honor. " ) )

Froccaro acknowledged that Pescatore had not appealed (See id. at 6.) at the hearing by AUSAs

to challenge the $3 million amount. The government, represented

Hennigan and Gatz, the $3 million

appeared to take divergent positions on whether was proper. Hennigan pointed out that

amount

"there is a

plea agreement wherein the defendant got the benefit

of a bargain, got the benefit of an agreement that required him to pay $3 million as of the 31st of December 2009, (id. at 9); but she also stated that, from which was passed" in "the (id. about

the numbers

presentence report at 10), she

that was

incorporated into the sentence" the victims' losses "to be

calculated (id.

$2.7 million"

at 11); and she said that" [i]n the event that - 14 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

there

is

ever

some

overpayment,

the

government

would

certainly

consider that"

(id. at 9) .

AUSA Gatz took the position that Pescatore should be bound by the Judgment, based on his express agreement to pay restitution of not less than $3 million: Your Honor, I just want the defendant agreed to pay agreement. He said before $3 million and no less In Honor ordered that. And we It was filed probably almost to remind the court $3 million, in the the court I will restitution. And are done with the a year ago. that plea pay your J&C.

So this satellite litigation is improper, frankly, as a whole because the defendant agreed to the $3 million in the plea agreement. (Motion Tr. 14.) The arguments. "specifics" contention $1.8 million, substantiated, which [are] court Having (id. that the at his ultimately requested 8) and rejected In vain all of Pescatore's provide to the than not

that (id. at

Pescatore 12) no as

"proof" losses that

victims' found

totaled

more was

court

that

contention

"not on the an

representations you made here today, to get more time" (id. at 22).

solely

effort

Further noting that,

of the amount he did not dispute, (id.

Pescatore the

"ha[d]n't even produced a dollar in good faith" court stated that Pescatore (see id. them the should at at 27

at 28),

least pay the undisputed

amount immediately id. at 22 ("Pay

("Pay what you say you owe. "); And although noting that

1.8.").)

compliance with the Judgment was already nearly 30 days overdue, the court gave Pescatore a new 30-day period within which to pay the $3 million ordered in the - 15 Judgment; the court denied

1

Pescatore's request for a longer period and stated that after 30 days the government should begin to levy on Pescatore's property. (See id. at 20-24.) MS. HENNIGAN: Your Honor, are you ordering that the defendant pay the $3 million within the next 30 days? THE COURT:
3 million bucks.

2

3
4 5 6

7
8

9

Wasn't my order for $3 million? MS. HENNIGAN: MS. GATZ: THE COURT: Yes. That is the judgment. Yes. Yes.

10
11

12
13

MS. HENNIGAN: MS. GATZ: THE COURT: (Motion Tr. 21-22.) Yes.

14 15 16
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Enforce it.

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22
23

MS. GATZ: Your Honor, at this point you are not setting aside the J&C, which requires the defendant to pay the $3 million. You are not setting aside the J&C, the judgment and conviction, which requires the defendant to pay the $3 million. You are not setting that aside at this point. THE COURT: (Id. at 24-25.) MS. HENNIGAN: [Y]our Honor, for clarification. Your Honor is suggesting that [Pescatore] pay what he does not dispute, but you are holding him accountable for the $3 million. THE COURT: (Id. at 27.) Yes, I am. No.

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- 16 -

1

This appeal

followed.

The new 30-day period granted by On March 3, Pescatore

2 3 4

the district court ended on March 1, 2010. moved in this Court for a stay of his

restitution obligation.

That motion was denied on March 5.

5

II.

DISCUSSION

6

On restoration,

appeal, to

Pescatore

pursues his

his

contentions

(1)

that was

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

relieve

him of

restitution obligation,

required because no law prohibited the DOJ from granting him that relief; and (2) the that, Judgment as the purpose him to of pay restitution $3 million
lS

compensation,

ordering

in

restitution is illegal to the extent that that amount the total of his victims and (b)
r

(a) exceeds

losses as shown by the PSR Loss Chart

exceeds an actual--albeit unspecified--loss total that he For the reasons that contention. Wi th its

alleges is lower than that shown by the PSR. follow, we find no meri t in the

restoration

respect to restitution,

Pescatore is of course correct that however,

purpose is to compensate victims; timely challenge the Judgment

as Pescatore did not obtaining a stay,

and,

without

failed to comply with the Judgment,

we conclude that he is not

entitled to immediate relief from the order to pay $3 million, as it is not clear that that losses suffered by his sum will exceed the total of shop victims, (b) the (a) the

chop

statutory

interest to which his victims are entitled because of his delay in making payment, and (c) the statutory penalties that may be

- 17

1

applicable on account of that delay. district court will be required,

Further proceedings in the after Pescatore has paid

2

3

$3 million, to determine whether he is entitled to any refund.

4

A.

Restoration Civil forfeiture actions such as that commenced by the

5

6
7

government against Pescatore in 2003 and settled pursuant to the Plea Agreement are governed by 18 U.S.C.
§

981.

That

section

8
9

"subject[s] involved

to forfeiture to the United States II property that was inter alia, various offenses
§

in,

under

Title

18,

10 11 12 13 14 15 16 17 18 19 20 21
22

including money laundering in violation of removing
§

1956 and altering or in violation To the of

motor

vehicle
§§

identification and

numbers (F) (i).

511.

18 U.S.C.

981(a) (1) (A)
§

extent

pertinent to the present appeal,

981 (e) provides that

[n]otwithstanding any other provision of the law, the Attorney General is authorized to retain property forfeited pursuant to this section, or to transfer such property on such terms and conditions as he may determine-

(6) as restoration to any victim of offense giving rise to the forfeiture 18 U.S.C. General
lS

the Attorney

§

981 (e) (6)

(emphases

added).

Thus,

the

23 24 25 26 27

allowed to choose between restoration and retention. and we are not aware

Pescatore has not called to our attention, of,

any provision in this or any other section that requires the to choose "to either option over or to the other. The

Attorney General

authori zat ion either

retain

transfer,"

with no

- 18 -

1 2
3

accompanying statutory constraints, makes the decision between the two choices a matter of discretion. Nor interpret law, Cir. does anything in the Plea Agreement, principles of which we

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

in accordance wi th tradi tional

contract

see generally United States v. Brumer, 2008), purport to of place that any

528 F.3d 157, 158 (2d on the 17 Attorney of the

constraints

General's Agreement Pescatore

exercise

discretion.

Paragraph that

obI igated the relief in the

USAO to form of

"recommend" restoration,

the DOJ grant

and Pescatore has

provided no reason to discredit the government's representation to the district court that the Office made the promised

recommendation. USAO "ha[d]

The Agreement further stated expressly that the only grant
~

authority to

to

recommend relief and

and

that

the with

final the that

decision Department" this

whether (Plea

such 17),

rest [ed]

Agreement

Pescatore

concedes

called on the DOJ to at 12). in

"exercise

its discretion"

(Pescatore

brief on appeal "make its
~

The promise that the Department would accordance as with applicable it law" (see, (Plea
~,

decision 17)

Agreement

is not,

Pescatore would have 9, 10, 12, 14, ),

Pescatore brief on appeal at 4,

the equivalent

of a promise to grant restoration so long as it is not prohibited. The unambiguous statement that the Department, upon receiving the recommendation, applicable law" would make its decision that the "in accordance would with do

plainly

means

Department

anything the law requires and nothing the law prohibits.

The Plea

- 19

1 2
3

Agreement

contains

no

promise

that

the

DOJ would

exercise

its

discretion to grant Pescatore relief that was not required. To the extent that the government suggests here, as it

4 5 6 7 8
9

argued in the district court, that the decision of the DOJ to deny restoration" is not reviewable in a court of law" we need not address that issue , given that (Motion Tr. 18), has

the government

explained the basis for the DOJ's decision, support a conclusion that that basis

and the record cannot any abuse of

evinced

discretion. different

Forfeiture and restitution are separate remedies with and the DOJ Manual dealing with forfeitures

10 11 12
13 14 15 16 17 18

purposes,

and with compensation for crime victims indicates that discretion may be exercised to transfer forfeited assets to victims other property restitution" is not to available to satisfy on the "where

order of (United

(Appendix

Government

brief

appeal

States Department of Justice, (2010) ) ) motion, "request assets"
16) ,

Asset Forfeiture Policy Manual 164

At the hearing on Pescatore's restoration/restitution the was government denied explained the that Pescatore's actually restoration does have

because
18;

defendant

19

(Motion Tr. Pescatore to

see also Government brief on appeal at no his
"I

20 21 22
23

and

in

way

suggested

that

he

lacked

the

wherewithal Tr.
16

satisfy Froccaro;

restitution have never

obligations said he

(see Motion doesn't have

(Mr.

assets") .)

Accordingly,

the cri teria for restoration set out in

24
25

the DOJ Manual were not met. In sum, we see nothing in the statutory provisions, DOJ's normal operating procedures, or the Plea Agreement that required - 20

26

1 2 3 4 5

the Department to use the forfeited assets to relieve Pescatore of his restitution obligations, and the record shows no failure on

the part of the government to consider his request in good faith. The district court properly denied Pescatore I s motion to compel

the government to grant restoration.

6 7 8 9 10 11 12
13

B.

Restitution The Mandatory Victims Restitution Act ("MVRA"), in part, "offense codified that in against by

largely at 18 U.S.C. sentencing property a

§§

3663A and 3664, provides, convicted 18, of a felony any

defendant Title

under"

"including

offense

committed

fraud or deceit," the court "shall order, other penalty to and authorized the by law, of

in addition to . the defendant

. any make

that the

restitution
§§

victim

offense."

18 U . S.C.

14 15 16 17 18 19 20 21 22 23 24

3663A(a) (1) court of

(c) (1) (A) (ii) restitution losses of the as

"In each order of restitution, to each victim by in the court of full and the

the

shall each

order victim I s

amount without

determined

the

consideration Id.
§

economic

circumstances

defendant." The

3664 (f) (1) (A) of restitution Hughey v. is to compensate victims 495 U.S. for 411, Pub.

purpose

their losses. 416 (1990),

See,~,

United States,

superseded by statute, Crime Control Act of 1990, 104 Stat. 4789, 4863

L. No. 101-647 § 2509,
§

(codified at 18 U.S.C. 450 F.3d 107, 446 115 (2d

3663 (a) (3)); 2006)

United States v.

Boccagna,

cir.

("Boccagna");

United States v.

Reifler,

F.3d 65,

- 21 -

1 2
3 4 5 6 7 8
9

137 419,

(2d Cir. 423-24

2006)

("Reifler");

United States v.

Nucci,

364 F.3d

(2d Cir. 2004)

("Nucci").

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

In determining the appropriate measure of value for property relevant to restitution, a district court must consider that the purpose of restitution is essentially compensatory: to restore a victim, to the extent money can do so, to the position he occupied before sustaining inj ury . See Hughey v. United States, 495 U.S. 411, 416, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990) (observing that the "meaning of 'restitution' is restoring someone to a position he occupied before a part icular event"); United States v. Coriaty, 300 F.3d 244, 253 (2d Cir.2002) (holding that "statutory focus" of the MVRA is "upon making victims whole"). Because the MVRA mandates that restitution be ordered to crime victims for the "full amount" of losses caused by a defendant's criminal conduct, see 18 U.S.C. § 3664 (f) (1) (A); United States v. Reifler, 446 F.3d at 134 , it can fairly be said that the "primary and overarching" purpose of the MVRA "is to make victims of crime whole, to fully compensate these vict ims for their losses and to restore these victims to their original state of well-being." United States v. Simmonds, 235 F.3d [826, 831 (3d Cir. 2000)]. Boccagna, court 450 F. 3d at 115. Section 3663A does not authorize the

to order restitution to victims in excess of their losses. Reifler, F.3d 446 F.3d at 122-35; Boccagna, 450 F.3d at 109; And as '" [f] ederal courts have no

See,~,

Nucci,

364

at 423-24.

inherent power to order restitution'" but only'" [as is] conferred by Congress' 122 F.3d 150, 941 F. 2d 71, authority 151 101 under

[s] uch authority

through statute," United States v. 1997) 1991) to (quoting United States (emphasis ours)), adopt or enforce the an

Gottesman,

(2d Cir. (2d Cir. the

v. Helmsley, court has no

MVRA

agreement calling for restitution in excess of that authorized by statute.

- 22 -

1

The chop shop offense of which Pescatore was convicted was plainly an offense "against property" and was "committed by fraud or deceit" within the meaning of 18 U.S.C. involved, parts inter alia, to rebuild
§

2 3 4 5 6 7
8

3663A(c) (1) (A) (ii).

His operations and using

receiving stolen car parts motor vehicles, and

those

damaged

transferring stolen cars to other individuals for replacement of the vehicle identification numbers with false numbers so that the cars could be sold to unwitting customers. Thus, the
MVRA

(See Plea Tr. 19-22.)

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

was applicable and required the district court to

order that Pescatore pay restitution to each identified victim of his offense in the full amount of the victim's losses. was not authorized to require resti tution In excess The court of those

losses. Pescatore does not dispute the applicability of the his contention is that the
MVRAi

plea Agreement and the Judgment are

illegal because they require him to pay restitution in excess of his victims' losses. The government, for its part, does not

contend on this appeal that it was permissible for the court to order restitution in excess of the victims' losses. brief on appeal suggests that the amended Instead, its

Judgment

against

Pescatore in fact reduced the restitution order to $2,559,611.79: [a]lthough Pescatore challenges the $ 3 million figure to which he agreed, the fact is that the judgment was amended to incorporate the port ion of the PSR identifying the victims of Pescatore's crimes and their actual losses, which total $ 2,559,611.79.

- 23

1 2 3 4 5 6 7
8

The judgment against him already has been amended to incorporate the victim and loss information from the PSR, making his restitution obligation no more than the actual losses suffered by his victims of his crimes. (Governmentls brief on appeal at 18, 20 (emphasis added).) We disagree with the governmentls characterization of the Judgment. However, given the posture of the case, we also

9 10 11

disagree with Pescatorels contention that he should immediately be relieved of the requirement that he pay $3 million in connection with his restitution obligations.

12
13

1.

The Amount Ordered in the Judgment Despi te the government I s contention on appeal that the

14 15 16 17 18 19 20 21 22 23 24 25 26 27

amended Judgment requires Pescatore to pay no more in restitution than $2,559,611.79, nothing in the record--pertinent parts of To

which are quoted ln Part I.B. above--supports that contention. begin with, the record does not include any document

ordering

Pescatore to pay any amount other than $3,000,000 or any order or opinion stating that the $3 million amount originally ordered has been reduced. court, Further, the government I s letter to the district
II

requesting that the original judgment be

corrected,

II

did

not ask the court to change the restitution ordered to a sum other than $3 million; by attaching their it asked only that the court amend the judgment PSR pages it that identified that the the victims for and the

the

itemized

losses--and

stated

reason

request was that the DOJ required that the judgment specifically identify the victims in order - 24 II

to

process

the

restoration

1
2

request."

(Government's January 2009 Letter at 1.).

Nothing in Nor was

that letter stated that $3 million was the wrong amount.

3 4
5
6 7

a lesser total amount immediately apparent from the proffered PSR pages. While the Loss Chart detailed the losses suffered by each it did not state a total. From the government's

of 80 victims,

submission, the district court might easily have inferred that the Loss Chart the supported the entire January already-ordered 2009 Letter $3 million. the

8

Indeed,

Government's

described

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

requested amendment as a "clerical" correction (id. at 2), hardly a term that is applicable to an undiscussed reduction of a

liability by nearly half a million dollars. letter nor the attached PSR pages alerted

In sum, the

neither the that the

court

Judgment as thus augmented might be viewed as reducing Pescatore's restitution obligation from $3 million to $2,559,611.79. Moreover, government's have such a view was nowhere evident in the to

opposition to

Pescatore's November 2009 the

request

the ordered losses.

$3 million reduced to match The government's inter alia,

amount of his letter to the

victims' district

preargument

court stated,

that

"[t] he Court's order of

mandatory restitution in the with the Mandatory Victim [s]

amount of $3 million is consistent Restitution Act." (Government's

December 2009 Letter at 2.) $2,559,611.79. number. AUSA

The letter contained no reference to

Nor at oral argument was there any mention of that Hennigan stated that based on the PSR pages losses

incorporated in the Judgment, "to be about $2.7 million"

she calculated the victims' (Motion Tr. - 25 11); but that

statement

1

apparently was not meant to suggest that any less than $3 million was ordered In the Judgment, for she had referred (id. to the and of

2

3
4

possibility that when the court

there might be an asked whether answered the

"overpayment" Judgment

at 9), payment

ordered (id.

5
6
7

$3 million,

Hennigan that that

affirmatively answer had (see

at 21). and she

AUSA argued in

Gatz

echoed

affirmative Pescatore no less," and

id.); to pay had

unequivocally restitution amount in

"agreed the

$3 million"

8
9

"and the

that

court

"ordered" to have

that that

"J&C,"

that

Pescatore's

attempt

10
11

amount reduced was "improper" Finally,
I.B.

(id. at 14). by the colloquy described in Part

as

revealed

12 13 14 15 16
17

above, amended

the district court itself plainly did not believe it the judgment to id. reduce at 21 the restitution amount below "Wasn't my order

had

$3 million.

(See,~,

(The Court:

for $3 million? The record thus because

That is the judgment.") . ) in no way supports the judgment was the government's amended to append new the that to

cont ent ion that,

18 19 20 21
22

PSR Loss Chart listing Pescatore's victims and their losses, "clerical" step reduced Pescatore's orders restitution Pescatore

obligation

$2,559,61l.79. of $3 million.

The Judgment

to pay restitution

The government's present acknowledgement that, by the pertinent of PSR pages in
f

as revealed

23 24 25 26

"[a] 11

the

losses was

sustained by the add up to

victims

crimes

which

Pescatore brief on total

involved at 17

$2,559,611.79" omi t ted)) means

(Government that those

appeal some

(footnote less than

losses - 26

$440,000

1

the Judgment orders Pescatore to pay.

Pescatore contends that the

2 3
4
5

discrepancy is even greater, arguing that the actual losses listed In the PSR Loss Chart total brief these "at on least $1 million at 8 less" than in

$3 million. original) . )

(Pescatore We address

appeal two

(emphasis

discrepancies--the

first

6

actual, the second alleged--in reverse order.

7 8

2.

Pescatore's Challenge to the Accuracy of the PSR's $2,559,611.79 Loss Total As indicated amount of above, each 18 U.S.C.
§

9

3664(f) (1) (A) be determined

required by the

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

that

the

victim's

loss

district court and included in the restitution order.

Although

the original judgment entered in November 2008 did not comply with this requirement, the amended Judgment appended the PSR Loss Chart that identified 80 chop shop victims in whose losses Pescatore was involved; loss. those pages showed the precise amount of each victim's

Although the Loss Chart did not state an overall total of the total is $2,559,611.79. Pescatore contends that

those items,

the actual total amount of his victims' losses is less. Pescatore had received the February 21, 2008 PSR well in The record

advance of his sentencing hearing on October 24, 2008.

does not indicate that in connection with sentencing he made any objection losses, whatever the to total the PSR's specification of victims or

or to

loss figure--$2,559,611.79--that was in Further, in January 2009, when

fact stated elsewhere in the PSR.

the government asked the court to amend the original judgment by appending specific pages of the PSR, - 27 Pescatore made no objection:

1 2 3 4 5 6 7 8
9

He did not

suggest

that

any individual

or entity identified in

those pages was not a victim in whose loss he was involved; he did not suggest he that did any not loss amount that shown the on loss those pages was

incorrect;

suggest

amounts

listed

totaled less than $2,559,611.79.

And when the amended Judgment

was entered, Pescatore did not appeal. Pescatore's less than contention was that not his victims' until losses he made after any total his the

$2,559,611.79

advanced some nine the

restoration/restitution amended Judgment was

motion,

months lack of

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

filed.

Given

timely

objection to the correctness of Pescatore's individual

the PSR Loss Chart's listing of showing that losses the is that total is

victims,

$2,559,611. 79,

Pescatore's

contention

Judgment

inaccurate because reviewable United only v.

the appended PSR Loss Chart plain error. 326 See Fed. F.3d 323, R. 326

inaccurate is P. 52 (b) ; 2003);

for

Crim. (2d

States

Catoggio,

Cir.

United States v. Coriaty, 300 F.3d 244, 252 States v. Kinlock, Under the

(2d Cir. 2002); United

174 F.3d 297, 299 (2d Cir. 1999) standard set by the Supreme Court for the

application of Rule 52(b), before an appellate court is allowed to correct an error that was not timely raised in the district court four conditions must be met. that is 'plain,' and (3) "[T]here must be (1) 'error,' (2)

that 'affect[s] substantial rights'''; and an appellate court

"[i]f all three" of those "conditions are met,

may then exercise its discretion to notice a forfeited error, but only if
(4 )

the

error

'seriously - 28

affect[s]

the

fairness,

1
2
3

integrity, Johnson v.

or

public

reputation 520 U.S. 725,

of

judicial 461, 467

proceedings.'" (1997) {quoting

United

States,

United States v.

Olano,

507 U.S.

732

(1993))

(other internal

4
5

quotation marks omitted) Pescatore's contention that the actual losses suffered by

6
7

his chop shop victims are less than the $2,559,611.79 detailed in the PSR Loss Chart first that was made part of the Judgment does not

8
9

meet even the His

threshold condition of the plain-error test. motion asserted that "the aggregate

restoration/restitution

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

amount of loss or restitution to the victims identified in the PSR is more the than to $1 million pay" lower than Mr. of Law Pescatore was ordered by ln Support at 7 of Defendant in

Court

{Memorandum

Michael

Pescatore's but did

Santobello

Motions

(emphasis

original)), The motion

it proffered no facts not challenge and it did the not

to support that assertion. identification the amount that that of of any any

PSR' s

part icular specific

vict im;

challenge it

PSR-itemized loss.

Rather,

claimed (id.

lower Yet

amount was revealed by "[s] imple ari thmet ic" the motion did not proffer a precise amount

at 7 n. 5).

by which Pescatore

contended the PSR was in error. evidence--proffered court's request Pescatore's for at oral

Nor was a precise figure--or any of the motion, 12). used despite the

argument

"proof"

(Motion Tr. that he

Although Froccaro, his calculator to

attorney,

stated

determine that "the loss amount in the PSR. (id. at 22), Froccaro also said, "I never

. added up to 1.8" agreed to the $1.8

- 29

1

million,"

(id.

at

21),

and said he

could not

give

the court a

2 3 4 5 6 7 8
9

"definite figure"

(id. at 6) .

The district court thus ruled--properly--that it could not uphold Pescatore's challenge to the accuracy of the PSR based on his vague and conclusory assertions (see,
~,

Motion Tr.

22

("not on the representations you made here today")) Our own victims' total mathematical review conf irms that the relevant

losses listed in the Loss Chart appended to the Judgment Although Pescatore's than was brief on appeal to the

$2,559,611.79.

10
11 12

provides

somewhat

more

enlightenment

proffered

district court as to the nature of his claim of arithmetic error, that claim improperly disregards the fact that in many instances his offense with respect to a particular vehicle caused losses to more than one vict im. Given Pescatore's failure to proffer any

13
14 15 16 17

evidence to show that the PSR Loss Chart is inaccurate, we cannot conclude that listing of the amended Judgment's totaling incorporation of the PSR' s is error, much less

losses

$2,559,611.79

18

"plain" error.

19

3.

Pescatore's Challenge to the $3 Million Requirement Pescatore's contention that the Judgment is in error to

20
21

the extent

that it orders him to pay more than $2,559,611.79 is to plain-error review and is far more problematic. the order that

22 23 24
25

also subj ect

In the original judgment entered in November 2008, Pescatore pay restitution in the amount of
$3

million did not

include or incorporate any identification of Pescatore's victims - 30 -

1 2 3 4 5 6
7

or determination of

each victim's

loss.

Hence

that

judgment's

order that Pescatore pay restitution did not comply with the MVRA. Pescatore did not appeal to complain of that defect. More court Chart importantly, when the government asked the district judgment by appending victims and their into the PSR Loss which with

to amend the itemizing

original

Pescatore's bring the

losses,

would apparently
§

Judgment

compl iance

8

3664 (f) (1) (A),

Pescatore did not ask the district court to also
$3 million

9
10

amend

the

original

figure

so

that

the

restitution

ordered would not exceed the $2,559,611.79 in losses listed in the Loss Chart.
2009,

11
12 13 14 15 16 17

Nor, after the amended Judgment was filed in January

did Pescatore appeal to complain that the Judgment required to pay more in restitution than the
$2,559,611.79

him

the

government had proven in losses.
2009

Rather, he waited until October
~,

to

complain of

the Judgment,

six months after being

notified that obligation,

the DOJ would not and nine months

relieve him of his restitution the Judgment was filed.

after

18
19 20 21

Accordingly, Pescatore's present challenge to the Judgment's order that he pay $3 million in restitution cannot be sustained unless he meets the plain-error test, described in Part II. B. 2. above.

We conclude that he meets the first three elements of that test, but not the fourth. Given the government's concession on this appeal that it proved losses totaling only $2,559,611.79, retention of the order And that in the amended Judgment's pay
$3 million

22
23 24 25 26

Pescatore light of

in

resti tution was

error.

the

authorities

cited

- 31

1

above, that error is plain. at

Further,

there can be no doubt that,

2 3 4 5 6
7
8

least at the time the Judgment was amended and itemized only in losses, the error affected Pescatore's

$2,559,611.79

substantial rights, than the MVRA

for it required him to pay some $440,000 more But these are just the threshold

authori zed. if met,

conditions that,

permit us to "exercise . only if or 520 []

[our] discretion

to notice a forfeited error . affect [s] judicial the fairness,

the error seriously reputation 467 of

integrity, Johnson,

publ ic
U.S.

9

proceedings."

at

(internal

10
11

quotation marks omitted) if Pescatore had we

(emphasis added). to make

In the present case, timely of payment of

proceeded in the

12 13 14 15 16 17
18

$2,559,611.79,

would,

interest

justice,

recognize

that his restitution obligation was satisfiedi or if he had timely paid the ordered $3 million, we would conclude that justice

entitled him to a refund. In fact, the Judgment, however, Pescatore, without obtaining a stay of

simply flouted it.

He moved on December 22, 2009- 2009--for a stay of the

and renewed his motion on December 31,

19 20 21 22 23 24 25 26

Judgment's requirement that he pay on or before December 31, 2009i but the court did not grant a stay. Pescatore nonetheless made

no payment at or before that first deadline. At the January 29, 2010 argument on Pescatore's request to reduce the restitution obligation, noting that Pescatore court"
23i

the court- -despite repeatedly

"ha[d]n't complied with the order of this (id. at 20,

(Motion Tr.
~,

24), was nearly "30 days overdue" at 24, 25), and "ha[d]n't

see,

id.

even produced a

- 32

1 2 3 4
5
6 7

dollar in good faith"

(id. at 28) --granted Pescatore a new 30-day (see id. at 20).

period in which to make a restitutionary payment That 30-day period ended on March 1, 2010,

and nothing in the

record suggests that Pescatore made any payment by that date. After his March 1, 2010 deadline had passed, Pescatore

asked this Court to grant him a stay. denied on March
5.

That motion was promptly

No party has informed us that Pescatore has

8 9 10 11 12 13
14

made any payment yet. We note also that following this Court's denial of a stay, Pescatore made no effort whatever to expedite this appeal; instead he missed several filing deadlines, two of which resulted in

dismissals

(followed eventually by reinstatements)

of the appeal.

As a consequence of the lack of any urgency on Pescatore's part, this appeal a was not after submitted for decision until the denial of his request January 2011, to modify the

15 16 17 18 19 20 21 22 23
24

nearly

year

restitution order, and more than 10 months after the expiration of the new 30 -day period granted him at the January 2010 hearing- when he was already in noncompliance--to make payment in full. Al though the fact that the government had shown losses

totaling only $2,559,611.79 means restitution In the amount of

that the Judgment's order for was In error, it is

$3 million

fundamental law that that error did not give Pescatore the right simply to ignore the court's order. It is a

25 26 27 28 29

basic proposition that all orders and judgments of courts must be complied with promptly. If a person to whom a court directs an order believes that order is incorrect the remedy is to appeal, but, absent a stay, he must comply promptly with the order pending appeal. - 33 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

Maness v. Meyers,

419 U.S. 449,

458

(1975)

(emphasis added).

[Aln order issued by a court with jurisdiction over the subject matter and person must be obeyed by the parties until it is reversed by orderly and proper proceedings. This is true without regard even for the constitutionality of the Act under which the order is issued. United States v. United Mine Workers of America, (1947) (footnote omitted)); (1922) ("until see,
~,

330 U.S. Kansas,

258,

293

Howat v. of a

258 U.S.

181,190

[thel

decision"

court of competent either by

jurisdiction "is reversed for error by orderly review, itself or by a higher court, to be respected"); (2d Cir. 1970) even SEC v. is its

its orders based on its decision are 433 F.2d 376, order is must 379 be set

Charles Plohn & Co., axiomatic that a

(" It

court it

obeyed, aside.
11

assuming

invalidity,

until

properly

(internal quotation marks omitted)) . In light and of Pescatore's the election to disregard we agree these he

principles cannot be

disobey

Judgment, more

al though than

that as

compelled

to

pay

$2,559,611.79

pure

restitution, we cannot conclude that he has met the final prong of the plain-error test so as to require that he be given immediate relief failure as other from the $3 million figure, for a defendant's unexcused (as well
§§

to comply with a potential) 3612 3613A

restitution order has monetary See, and
~,

consequences. (penalties (inter

18 U.S.C. 3613 of

3572

(penalties) , enforcement) ,

interest);

(civil

alia,

modification

supervised

release terms; contempt of court), 3614 The accrual of consequences interest and most relevant

(resentencing). to this appeal to are the

penalties - 34 -

with

respect

restitution

1

payments not made when due.

If a restitution payment of more than "[i] n general [, t] he
§

2
3

$2,500 is not made as ordered by the court, defendant addition, more than shall pay interest," 18 U.S.C.

3612 (f) (1) .

In

4 5
6

a "payment of restitution is delinquent if a payment is 30 days late," and is "in default
§§

if

a

payment

is

delinquent for more than 90 days."

18 U. S . C .

3572 (h)

and (i) .

7
8 9

The penalties for delinquency and default are substantial: If a fine or restitution becomes delinquent, the defendant shall pay, as a penalty, an amount equal to 10 percent of the principal amount that is delinquent. If a fine or restitution becomes in defaul t, the defendant shall pay, as a penal ty, an additional amount equal to 15 percent of the principal amount that is in default. 18 U.S.C.
§

10
11

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

3612(g)

(emphases

added)

i

see

also

id.

§

3612(i)

("Payments relating to fines and restitution shall be applied In the following and order: (4) (1) to principali (2) to costsi (3) to

interest i and

to penal ties. ,,) . are not of of paid the the
§

These penal ties for default the defendant s
I

delinquency become

to

victims,

but See to

rather

assets Office

United

States

Treasury. Courts, (Aug. Guide
3,

Administrative Judiciary

United States 810.50.10(a) (2)

Policy

vol. 13,

2010 ) Any

(" Interest assessed on restitution is paid to the victim.

penalty assessed on restitution is deposited into Miscellaneous Fines, Penalties, and Forfeitures Fund . Assuming that Pescatore has

. ") .
made no restitutionary

payments during the pendency of this appeal,

he has accumulated

obligations of interest on the $2,559,611.79, as well as penalties that are sizeable. Thus, it is not - 35 clear that $3 million will

1 2 3
4

exceed the sum of his victims's losses, the statutory interest to which the victims and of that the are entitled because of his delay in making

payment, account agree

statutory penal ties delay. In cannot all be the

that

may be appl icable on although we more than

that

circumstances, to pay

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Pescatore

compelled

$2,559,611.79 as pure restitution, we cannot conclude that he has met the final prong of the plain-error test in any way that

requires that he be given immediate relief from the requirement that he pay $3 million. We note that Pescatore acknowledged in his plea allocution that his chop shop operation began in 1987 and ended in mid-2004. Thus, his victims have been without compensation for their losses We conclude that, in throughout this case,

for the better part of a decade, or longer. light of the choices made by Pescatore

including: · his initial agreement $3 million in restitution, to pay no less than

· his failure to timely object to or appeal from the amended Judgment to challenge its retention of the $3 million restitution obligation despite the amendment identifying victims whose losses totaled only $2,559,611.79, · his failure to challenge the accuracy of the PSR Loss Chart before sentencing, at sentencing, or upon the government's request that the Loss Chart be made part of the Judgment, · his unsubstantiated challenges to the accuracy of the Loss Chart, made in conclusory fashion, more than a year late, and without even an offer of proof, · his tortoise-like pace in pursuing relief, both in the district court and on this appeal, to achieve delays that he had requested and been denied, - 36

1 2

· his decision, having repeatedly been denied a stay, simply to disobey the Judgment, and · the fact that his failure to make any payments by the court-imposed deadlines will require him to pay interest on, and expose him to the possibility of restitution-related penalties of 10 and 15 percent of, any unpaid portion of $2,559,611.79, we conclude that the of interests judicial of justice, fairness, are best and served the if

3 4

5 6 7

8
9

public

reputation

proceedings

10
11

Pescatore remains required to make the ordered $3 million payment, subject to his right to a refund of any moneys remaining after his victims whatever satisfied. have been paid restitution, with interest, penalties and have after been

12
13 14

applicable

restitution-related

15

CONCLUSION

16 17 18 19 20 21 22
23

We

have considered all

of Pescatore's arguments on this On remand, the dates on

appeal and have found in them no basis for reversal. the district court will determine, inter alia, (a)

which payments toward Pescatore's $3 million obligation are made or are otherwise (b) the satisfied amounts of by government seizure of his

properties,

interest

accruing on any unpaid

portion of the principal sum of $2,559,611.79 during Pescatore's periods extent of to noncompl iance which the wi th court - ordered deadl ines, (c) the on of

24 25

statutory

restitution-related penalties and (d) if the total

such unpaid principal

are applicable,

-

37

1 2 3
4
5

restitution,

interest,

and restitution-related penalties does not

exhaust the $3 million, the amount to be refunded to Pescatore. The order of the and district (b) court (a) denying an order

compelling restoration,

denying immediate relief from the Pescatore is to make the issuance of the

$3 mill ion rest i tut ion order is af firmed. payment mandate shall of $3 million within 60 days of

6 7 8 9 10 11

herein; cease

interest to

on any unpaid portion of $2,559,61l.79 during that period. The mat ter is

not

accrue

remanded to

the district

court

for proceedings not

inconsistent

with this opinion. The mandate shall issue forthwith.

-

38