USA v. Hussein Nazzal

Filing

OPINION filed : The district court's restitution order is AFFIRMED, decision not for publication. Eugene E. Siler , Jr., Julia Smith Gibbons (AUTHORING), and John M. Rogers (CONCURRING), Circuit Judges. [14-1989, 14-1990]

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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0185n.06
Nos. 14-1989/1990

FILED

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA,

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Plaintiff-Appellee,
v.
HUSSEIN NAZZAL,
Defendant-Appellant.

BEFORE:

Mar 31, 2016
DEBORAH S. HUNT, Clerk

ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE EASTERN
DISTRICT OF MICHIGAN

SILER, GIBBONS, and ROGERS, Circuit Judges.

JULIA SMITH GIBBONS, Circuit Judge. Hussein Sam Nazzal (Nazzal) challenges
the district court’s order of restitution to Z.C. and H.M., a woman formerly employed at one of
his restaurants and her son, respectively. Nazzal pled guilty to conspiracy to defraud the United
States for helping arrange several fraudulent marriages, and the government alleges that Nazzal
abused Z.C. and H.M. in order to keep them from reporting his illegal activity to the United
States. Because Nazzal forfeited his objection to the district court’s and government’s treatment
of Z.C. and H.M. as victims, we affirm the restitution order.
I.
On July 16, 2013, Nazzal pled guilty to one count of conspiracy to defraud the United
States in violation of 18 U.S.C. § 371. During the plea colloquy, Nazzal admitted helping to
arrange two fraudulent marriages between American citizens and his associates.

The

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government and the district court also mentioned Mike “Muhammad” Murry (Murry), with
whom Nazzal allegedly arranged another false marriage for Z.C., but Nazzal did not admit these
facts as part of his plea.
The Presentence Investigation Report (PSR) mentioned as “offense conduct” the
marriage between Murry and Z.C., physical and sexual abuse of Z.C. and H.M. by Nazzal,
threats to report them to the immigration authorities, and Z.C.’s work in Nazzal’s restaurant
without pay. Under the “victim impact” section, the PSR identified Z.C. and H.M. as victims of
Nazzal’s conduct, again mentioning physical and sexual abuse, Z.C.’s work without pay, and
threats that Z.C. would be deported if she did not comply with Nazzal’s demands. Nazzal
objected to various portions of the PSR, including the offense conduct and victim impact
sections that refer to Z.C. and H.M. as victims.
Nazzal stated at the sentencing hearing that he was withdrawing all objections to the PSR
“as part of a global agreement” with the government. He characterized this agreement as
“resolv[ing] all of the issues that were pending before the Court.” At the sentencing hearing,
Nazzal did not object to the district court’s decision to hold a restitution hearing, and he also did
not object to Z.C. and H.M. being called victims and addressing the district court as such. While
speaking to the court at sentencing, H.M. told the court that Nazzal kept his and Z.C.’s
immigration papers and threatened to deport and otherwise harm them if they ever told anyone
about his conduct, while Z.C. testified that he abused and threatened her after she married Murry,
saying she owed him money and forcing her to work in his restaurant and have sex with him.
Only later, in his response to the government’s supplemental sentencing memorandum, did
Nazzal object to the characterization of Z.C. and H.M. as victims.

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Nazzal, the government, and counsel for Z.C. and H.M. filed with the district court their
positions regarding restitution. At the restitution hearing, the government and counsel for H.M.
presented testimony and argument regarding Z.C.’s and H.M.’s lost wages and H.M.’s need for
long-term psychological treatment, and Nazzal cross-examined the two witnesses. The district
court declined to admit a report Dr. Michael Abramsky prepared on Nazzal’s behalf or to grant a
continuance until Dr. Abramsky was available to testify.
The district court’s order granted restitution of $79,107 to Z.C. and $222,399 to H.M.
under the Victim Witness Protection Act, finding excessive the amount requested for H.M.’s
psychological treatment. Nazzal timely appealed.
II.
We review de novo whether restitution is permitted under the law, United States v. Evers,
669 F.3d 645, 654 (6th Cir. 2012), but we review forfeited arguments for plain error. United
States v. Coppenger, 775 F.3d 799, 803 (6th Cir. 2015). “Whereas forfeiture is the failure to
make the timely assertion of a right, waiver is the ‘intentional relinquishment or abandonment of
a known right.’” United States v. Olano, 507 U.S. 725, 733 (1993) (citation omitted). Nazzal
did not waive his arguments that Z.C. and H.M. are not victims, as the government argues, but he
did forfeit them.
After objecting to the PSR’s characterization of Z.C. and H.M. as victims, Nazzal stated
at the sentencing hearing that he was withdrawing all objections to the PSR “as part of a global
agreement” with the government. He characterized this agreement as “resolv[ing] all of the
issues that were pending before the Court.” At the sentencing hearing, Nazzal did not object to
the district court’s decision to hold a restitution hearing, and he also did not object to Z.C. and
H.M. being called victims and addressing the court as such. Later, in his response to the

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government’s supplemental sentencing memorandum, Nazzal did, however, object to the
characterization of Z.C. and H.M. as victims, as he does on appeal.

Thus, there is some

ambiguity about the significance of Nazzal’s statements about the agreement at the sentencing
hearing and whether he waived or forfeited the argument about Z.C. and H.M.’s victim status.
The Seventh Circuit addressed an analogous factual situation in United States v. Allen,
529 F.3d 390 (7th Cir. 2008). In that case, the defendant filed a written objection to the
restitution calculation in the PSR, but at sentencing, he did not restate his objection to the PSR
calculation of the amount of loss. Id. at 392–94. The district court specifically asked whether
there were still any objections to the PSR, and Allen responded that there were none, in light of
the fact that the government had subtracted two offense levels for abuse of trust. Id. at 394. The
Seventh Circuit noted that an objection not raised at sentencing is waived only if “the defendant
had a strategic reason to forego the argument, that is, only if the defendant’s counsel would not
be deficient for failing to raise the objection.” Id. at 395 (citation omitted). It accordingly held
that the objection was forfeited, rather than waived, because there was no strategic reason to
forgo at sentencing a challenge to the restitution figure. Id.
Given the lack of a written agreement with the government, the ambiguity about what
PSR objections Nazzal’s counsel intended to waive at the sentencing hearing, and the absence of
a strategic reason to waive the argument that Z.C. and H.M. are not victims, we follow the
Seventh Circuit’s approach in Allen and apply plain-error review. “A plain error that affects
substantial rights may be considered even though it was not brought to the court’s attention.”
Fed. R. Crim. P. 52(b). To demonstrate plain error, an appellant must prove: (1) an error
occurred in the district court; (2) the error was plain, i.e., obvious or clear; (3) the error affected
the defendant’s substantial rights; and (4) this adverse impact seriously affected the fairness,

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integrity, or public reputation of the judicial proceedings. Coppenger, 775 F.3d at 803. The
Supreme Court has directed that “[a]t a minimum, [a] court of appeals cannot correct an error
pursuant to Rule 52(b) unless the error is clear under current law.” Olano, 507 U.S. at 734.
III.
Because federal courts lack the inherent power to award restitution, we may order
restitution “only when and to the extent authorized by statute.” Evers, 669 F.3d at 655 (citation
omitted).

Victims of Title 18 offenses are eligible to receive restitution, 18 U.S.C.

§ 3663 (a)(1)(A), and a “victim” for the purpose of the statute is “a person directly and
proximately harmed as a result of the commission of an offense . . . including . . . any person
directly harmed by the defendant’s criminal conduct in the course of [a] scheme, conspiracy, or
pattern.” Id. at § 3663(a)(2). The requirement that harm be “direct” means that “the harm to the
victim [must] be closely related to the conduct inherent to the offense, rather than merely
tangentially linked.” In re McNulty, 597 F.3d 344, 352 (6th Cir. 2010).
In cases involving conspiracy, a court may “order restitution for damage resulting from
any conduct that was part of the conspiracy and not just from specific conduct that met the overt
act requirement of the conspiracy conviction.” United States v. Elson, 577 F.3d 713, 723 (6th
Cir. 2009) (citation omitted). Where a defendant is convicted via plea, “the court should look to
the plea agreement, the plea colloquy, and other statements made by the parties to determine the
scope of the ‘offense of conviction’ for purposes of restitution.” Id. (citations omitted).
In Elson, we held that a defendant who pled guilty to conspiracy to obstruct justice could
be ordered to pay restitution for losses resulting from a broader conspiracy to commit mail and
wire fraud. Id. at 722, 725. In our reasoning, we looked to Elson’s plea colloquy, which
“included the entire course of Elson’s fraudulent activity” and “reveal[ed] that the parties
intended to include a broader range of acts in the offense of conviction than those related solely
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to the conspiracy to obstruct the grand jury investigation.” Id. at 723. We also pointed to
Elson’s plea agreement as establishing his agreement to pay restitution to victims of the broader
conspiracy. Id. at 724.
In In re McNulty, however, we considered an analogous statute and held that McNulty
was not a victim, because the harms he suffered were neither inherently criminal nor inherent in
the crime of the conspiracy at issue, antitrust conspiracy. 597 F.3d at 351–52. The alleged
harms to McNulty—being fired for refusing to participate in the conspiracy and being
“blackballed” until he stopped assisting the government—were also not sufficiently related to the
offense of conviction for McNulty to qualify as a victim. Id. at 352.
Here, Nazzal pled guilty to conspiracy to defraud the United States in violation of
18 U.S.C. § 371, so to be victims, Z.C. and H.M. must have been “directly and proximately
harmed” by Nazzal’s criminal conduct in the course of his conspiracy to defraud the United
States, as the conspiracy was defined in his plea colloquy. 18 U.S.C. § 3663(a)(2); Elson,
577 F.3d at 723. In the plea colloquy, Nazzal admitted helping to arrange two fraudulent
marriages that misled the Immigration and Naturalization Service. Nazzal specifically admitted
assisting one of the cooks at his restaurants in arranging a false marriage to one of his waitresses,
in the hope that the former “would become a good cook for [him].” He did not, however, admit
the allegations of abuse that Z.C. and H.M. raised at the sentencing hearing, nor did he
specifically admit arranging the fraudulent marriage that involved Z.C. and Mike Murry, though
the government and the district court referred to this marriage indirectly.
The relatedness of the harms Z.C. and H.M. allege and the conspiracy would be a close
question under de novo review, but under plain error review, the district court did not err in
determining that the conspiracy directly and proximately caused the harm Z.C. and H.M.

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sustained. Any error the district court made is not “clear under current law,” as Olano requires.
507 U.S. at 734. H.M. testified that Nazzal kept their immigration papers and threatened to
deport and otherwise harm them if they ever told anyone about his conduct, while Z.C. testified
that Nazzal abused and threatened her after she married Murry, saying she owed him money and
forcing her to work in his restaurant. Unlike the conduct at issue in McNulty, Nazzal’s actions
were clearly criminal, and it was not plain error for the district court to find that Nazzal’s abuse
of Z.C. and H.M. was part of his efforts to conceal the conspiracy.
IV.
Nazzal next argues that the district court failed to consider Nazzal’s negative net worth
and cash flow in ordering restitution. We review a restitution order for abuse of discretion.
United States v. Blanchard, 9 F.3d 22, 24–25 (6th Cir. 1993).
The district court did not abuse its discretion in determining that Nazzal was able to pay
restitution to Z.C. and H.M. When the district court considers whether to order restitution, it
must consider the amount of the loss sustained by each victim as a result of the offense, along
with the defendant’s financial resources, his financial needs and earning ability and those of his
dependents, and “such other factors as the court deems appropriate.”

18 U.S.C.

§ 3663(a)(1)(B)(i). The government bears the burden of establishing the amount of loss by a
preponderance of the evidence, while the defendant bears the burden of proving his lack of
financial resources and his financial needs. 18 U.S.C. § 3664(e); United States v. Hart, 70 F.3d
854, 863 (6th Cir. 1995); Blanchard, 9 F.3d at 25. Indigency does not bar an order of restitution,
because a defendant’s ability to pay is only one factor for the sentencing court to consider.
Blanchard, 9 F.3d at 24–25. Even if a court finds that a defendant cannot pay a fine, the court
may order restitution if it finds that the defendant is likely to earn future income. United States
v. Sanders, 95 F.3d 449, 456 (6th Cir. 1996). We will infer that the sentencing court took the
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appropriate factors into account regarding the defendant’s financial situation when the statutory
factors are discussed in the PSR. See Blanchard, 9 F.3d at 24–25.
Here, the PSR provides detailed information regarding Nazzal’s financial resources,
expenses, earning ability, and dependents. The district court’s restitution order referred to the
PSR, noting Nazzal’s level of education, ownership of many businesses and properties, and
family obligations. In determining that Nazzal would be able to make nominal restitution
monthly payments, the court acknowledged his businesses’ lack of equity but also cited his
average future earning capacity. At the restitution hearing, Nazzal did not present any proof or
make any objection to the imposition of restitution due to his inability to pay. In his response to
the government’s supplemental sentencing memorandum, he rejected the government’s depiction
of his current financial situation but provided no alternative. Based on these facts and given
Nazzal’s burden to prove his lack of financial resources, the district court did not abuse its
discretion in ordering restitution in the amount of $79,107 to Z.C. and $222,399 to H.M.
V.
Nazzal also argues that the district court surprised and prejudiced him by not considering
the report of psychologist Dr. Michael Abramsky and not granting a continuance until he was
available to testify. Federal Rule of Criminal Procedure 32 and 18 U.S.C. § 3664 grant a district
court discretion to choose the procedures for a restitution hearing “that will best aid the court in
assessing the amount of loss.” United States v. Vandeberg, 201 F.3d 805, 813–14 (6th Cir.
2000). Overall, these procedures must “afford[] the defendant a reasonable opportunity to
respond,” Coppenger, 775 F.3d at 804, and Rule 32 indicates “that a court must afford parties an
opportunity to be heard on any disputed sentencing issue.” Vandeberg, 201 F.3d at 814. A

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suitable procedure “is one that precludes the possibility of prejudicial surprise.” Coppenger,
775 F.3d at 804.
Here, the district court afforded Nazzal an adequate opportunity to be heard regarding
potential restitution. Nazzal received the restitution requests regarding Z.C. and H.M., with
supporting expert reports and affidavits, on January 7 and 8, 2014. He responded on January 23,
2014 without exhibits, expert reports, or notice that he intended to rely on an expert opinion. In
his response, Nazzal did, however, challenge the methodology and credentials of the counselor
whose report H.M. presented. At the restitution hearing on April 15, 2014, Nazzal crossexamined the counselor, again challenging her qualifications to diagnose mental illnesses and the
basis of her diagnosis.
After the presentation by Z.C. and H.M., the district court asked Nazzal if he had
anything to present, and he attempted to introduce a report from Dr. Abramsky. He also asked
that Dr. Abramsky be allowed to testify at a later time. Z.C. and H.M. objected that they had
only received his report the previous day—April 14—even though it was dated January 27 and
that Dr. Abramsky was not present to be cross-examined. They also objected that based on their
limited investigation, “perhaps this Court should not qualify [Dr. Abramsky] as an expert”
because of a previous suspension based on misconduct and a then-pending complaint by the
psychiatric board.

Finally, Z.C. and H.M. objected on the grounds that allowing Nazzal

additional time, after he had seen all of their information, was “substantially prejudicial.” Nazzal
countered that he was unaware there would be testimony at the restitution hearing. The district
court declined to grant a continuance or to consider Dr. Abramsky’s report, citing the two
previous continuances, one at the request of Nazzal and one at the request of Z.C. and H.M.

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Though perhaps it would have been preferable for the district court to consider Dr.
Abramsky’s report in tandem with Z.C. and H.M.’s objections to it instead of declining to
consider the report altogether, the court’s failure to do so did not prejudicially surprise Nazzal.
He knew the basis of the restitution arguments, including the diagnosis of H.M. by a counselor,
beginning in early January 2014. Nazzal did not mention Dr. Abramsky or his intention to rely
on his opinion until the day before the twice-postponed restitution hearing, even though the
report was prepared over two months prior to that date. Moreover, Nazzal made the same
arguments he says Dr. Abramsky would have presented in his response to the government’s
supplemental sentencing memorandum, in his cross-examination of H.M.’s counselor, and in his
presentation to the court. Given these facts, Nazzal received a reasonable opportunity to respond
to the government’s restitution case and was not prejudicially surprised.
VI.
Finally, Nazzal argues that Z.C. was a co-conspirator and therefore was not entitled to
restitution. He cites United States v. Lazarenko, 624 F.3d 1247 (9th Cir. 2010), in support of his
argument.

In Lazarenko, however, the Ninth Circuit distinguished the general rule that a

participant in a crime cannot recover restitution from the special circumstances present in
another case, United States v. Sanga, 967 F.2d 1332 (9th Cir. 1992). Lazarenko, 624 F.3d at
1252. Sanga’s analysis applies here as well. The Ninth Circuit noted:
Our analysis [in Sanga] was informed by the fact that Quinlob [the victim/coconspirator] was not named as a co-conspirator in the indictment; that she had a
very minor role in the conspiracy; and that her persecution began after the
completion of her small part of the conspiracy. Although she was technically a
co-conspirator, her very small role was unconnected to the overall conspiracy;
indeed, had she known the full extent of the conspiracy—that she would be forced
to be a slave and rape victim—she would not have entered the conspiracy.
Id. Here, too, Z.C. was never named as a co-conspirator in a charging document, and she had a
minor role in the conspiracy as a participant in a false marriage. Her persecution began after
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Nazzal helped arrange her marriage, and had she known what was to come, she would never
have participated. Thus, Z.C.’s role in the conspiracy does not preclude her from receiving
restitution.
VII.
For the foregoing reasons, we affirm the district court’s restitution order.

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ROGERS, Circuit Judge, concurring. I concur in the majority opinion, notwithstanding a
concern that Nazzal’s abuse of Z.C. and H.M.—however terrible—was not really part of
Nazzal’s efforts to conceal the conspiracy. The best way for Nazzal to conceal the conspiracy
would have been to let the victims alone. Nazzal was apparently threatening to reveal the
criminal acts constituting the conspiracy. Such threats are not inherent in the crime of the
conspiracy, but instead are more in the nature of collateral blackmail. Such independent crimes
should be prosecuted independently, or be brought under tort law. In the absence of sufficiently
clear law to that effect, however, it is correct to uphold the restitution orders on plain error
review.

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