United States v. Olson

PUBLISH

UNITED STATES COURT OF APPEALS
Filed 1/17/97
TENTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v. No. 95-1522

RAY WILLIAM OLSON, also known
as Robert G. Johnson, also known as
Bob Johnson, also known as Andrew J.
Johnson, also known as Logan Counts,

Defendant - Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D. Ct. Nos. 94-CR-310-Z & 94-CR-405-Z)

Raymond P. Moore, Assistant Federal Public Defender (Michael G. Katz, Federal
Public Defender, with him on the briefs), Denver, Colorado, appearing for the
Appellant.

Gregory C. Graf, Assistant U.S. Attorney (Henry L. Solano, United States
Attorney, with him on the brief), Denver, Colorado, appearing for the Appellee.

Before TACHA, HENRY, and BRISCOE, Circuit Judges.

TACHA, Circuit Judge.
 In a period of six years, Ray Olson defrauded over 800 people of

$6,097,155 by falsely representing that their money would be invested in

securities and commodities. After federal grand juries in Louisiana and Colorado

indicted Olson, he pleaded guilty to one count of mail fraud, one count of wire

fraud, and one count of money laundering. As part of his sentence, the district

court ordered Olson to pay $6,097,155 in restitution to his victims.

Olson seeks review of two issues on appeal. First, Olson contends that the

district court abused its discretion in ordering him to pay $6,097,155 as

restitution. Specifically, Olson argues that he lacks any assets or earning

potential sufficient to create a realistic possibility that he can pay full restitution.

Olson maintains that the district court imposed the restitution order by speculating

that the defendant may have some assets unknown to the court. Second, Olson

argues that the record does not provide a factual basis to support the district

court’s restitution order. Thus, Olson claims that we cannot reasonably review

the propriety of the restitution order. We have jurisdiction pursuant to 28 U.S.C.

§ 1291 and affirm.

BACKGROUND

From June 1987 to June 1989, Olson lived in Louisiana where he defrauded

approximately 120 people by falsely representing that he would invest their

money in securities and commodities. Instead of investing the money as

-2-
promised, Olson used the money for his personal expenses. Over the two year

period, Olson obtained $2,697,065 through his fraudulent scheme.

In 1989, Olson fled to Colorado where he assumed the identity of “Robert

Johnson.” From June 1989 through the spring of 1993, Olson defrauded

approximately 700 people of $4,178,698. The Colorado scheme differed from the

Louisiana scheme in two ways. First, in Colorado Olson used several individuals

(Kathleen Jardine, Vanita West, and Wallace Drew) to solicit and collect money

from the investors on his behalf. Second, Olson transferred much of the money

from Colorado to offshore bank accounts.

On May 21, 1992, the government filed a ten-count indictment against

Olson in the Western District of Louisiana. On December 8, 1994, the

government filed a twenty-six count indictment against Olson in the District of

Colorado.

On September 5, 1995, the Louisiana case was transferred to Colorado. On

September 18, 1995, pursuant to a plea agreement, Olson pleaded guilty to one

count of wire fraud, one count of mail fraud, and one count of money laundering.

He agreed to pay a minimum of $130,420 in restitution and to assign all of his

interest in his bank accounts and other assets to the government. He admitted

however, that he “used several bank accounts and offshore accounts in the

Bahamas, as a repository of investor funds.”

-3-
 On October 23, 1995, the district court held a sentencing hearing on the

issue of restitution. The record indicates that Olson and his associates placed

approximately $3-$4 million in various bank accounts. For example, Olson

controlled approximately $1.7 million in a bank account in the Bahamas called the

“Goldwing” account. Olson also maintained a bank account in Mexico City

containing $300,000 to $400,000 and a bank account in Vanuatu, an island near

New Zealand.

Olson employed a Bahamian lawyer, Cyril Fountain, to help him start

several Bahamian companies and open Bahamian bank accounts in the name of

the companies. Fountain, however, considered Olson to be the “beneficial owner”

of these accounts. Olson’s associates (Jardine, West, and Drew) used a similar

approach to launder their money. Jardine started a company called “Relas Ltd.”

and opened a bank account in the company’s name. West started a company

called “Ouray Ltd.” and opened an account in its name. Drew started a company

called “Columbine Ltd.”and opened a bank account in its name.

At the restitution hearing, Fountain testified on behalf of Olson. Fountain

testified that he kept $88,860 in cash in his law firm safe for Olson. Fountain

then turned over $193,188 to the government on behalf of Olson ($88,860 from

the law firm safe and $101,328 from the Goldwing account). Fountain also

brought corporate records for all of the companies for which Olson was the

-4-
“beneficial owner.” Fountain, however, did not bring any bank records for the

companies. He also did not know the remaining balances in the bank accounts of

any of the companies.

On November 27, 1995, the court sentenced Olson to 87 months

imprisonment and three years of supervised release. In addition, the court

imposed a restitution order in the amount of $6,097,155. The figure represented

the amount misappropriated by Olson in both the Louisiana and Colorado schemes

minus $415,988 in restitution that Olson had already made to his victims. 1 The

court however, recognized that the amount of restitution might be lowered after

the government finished tracing all of Olson’s bank records and assets.

DISCUSSION

I. Amount of Restitution

We review the district court's factual findings underlying a restitution order

for clear error. United States v. Teehee, 893 F.2d 271, 273-74 (10th Cir. 1990).

We review the amount of a district court’s restitution order for an abuse of

discretion. United States v. Rogat, 924 F.2d 983, 985 (10th Cir.), cert. denied,

499 U.S. 982 (1991).

1
In addition to the $193,188 that Fountain turned over to the government, Olson
had assets that, when liquidated, brought the amount of money recovered to $415,988.

-5-
 The Victim and Witness Protection Act (VWPA), 18 U.S.C. §§ 3663-64

governs the restitution order at issue in this case. 2 When determining the

appropriate amount of restitution, a sentencing court “shall consider the amount

of the loss sustained by any victim as a result of the offense, the financial

resources of the defendant, the financial needs and earning ability of the

defendant and the defendant's dependents, and such other factors as the court

deems appropriate.” 18 U.S.C. § 3664(a). The fact that a defendant is without

financial resources at the time of sentencing is not itself a bar to a restitution

order. United States v. Gabriele, 24 F.3d 68, 73 (10th Cir. 1994). A restitution

order, however, must be consistent with a defendant's ability to pay. United

States v. Gilbreath, 9 F.3d 85, 86 (10th Cir. 1993). Thus, “[a] restitution order

will be upheld if the evidence indicates a defendant has some assets or earning

potential and thus possibly may be able to pay the amount ordered.” Rogat, 924

2
The Mandatory Victims Restitution Act of 1996 ("MVRA"), which was enacted
on April 24, 1996, as Title II, Subtitle A of the Antiterrorism and Effective Death Penalty
Act of 1996, Pub. L. No. 104-132, 110 Stat. 1214, amended the VWPA. Pursuant to the
MVRA, "[i]n each order of restitution, the court shall order restitution to each victim in
the full amount of each victim's losses as determined by the court and without
consideration of the economic circumstances of the defendant." 18 U.S.C. §
3664(f)(1)(A). The new provision does not apply in this case because Title II provides
that "[t]he amendments made by [subtitle A] shall, to the extent constitutionally
permissible, be effective for sentencing proceedings in cases in which the defendant is
convicted on or after the date of enactment of this Act." 18 U.S.C. § 2248 (quoting Pub.
L. No. 104-132, § 211, 110 Stat. 1214, 1241). Accordingly, statutory citations in this
opinion refer to the VWPA provisions in effect before the passage of the MVRA.

-6-
F.2d at 985 (emphasis added). Moreover, the burden is on the defendant to prove

that he lacks the ability to pay full restitution. 18 U.S.C. § 3664(d).

Today we hold that when a defendant has secreted proceeds from an illegal

activity, the illegal proceeds are presumed assets of the defendant unless the

defendant proves otherwise. As the Third Circuit recently stated:

[We] place the burden of proof on the defendant to show what has
happened to all of the illegally obtained assets. All assets for which
the defendant cannot account may be included in the amount of
restitution ordered. To the extent that records are unavailable, the
risk of inaccuracy should be borne by the defendant rather than the
victims.

United States v. Voigt, 89 F.3d 1050, 1092 (3d Cir. 1996) (quoting United States

v. Copple, 74 F.3d 479, 486 (3d Cir. 1996) (Alito, J., concurring) (citation

omitted)), petition for cert. filed, (U.S. Nov. 12, 1996) (NO. 96-6732). See also

United States v. Lampien, 89 F.3d 1316, 1325 (7th Cir.1996) (“[I]f Lampien is

unable to prove to the satisfaction of the district judge that she no longer

possesses any part of the nearly one-half million dollars she embezzled, the judge

may, in his discretion, consider the resulting amount as being available for

purposes of restitution.”).

As to Olson’s financial condition, the record indicates that Olson obtained

over $6 million in investor funds. Approximately $5.6 million remains missing.

Olson did not deny that additional money might be recovered and did not claim

that the missing money was exhausted maintaining an opulent lifestyle. Olson

-7-
admitted that he and his associates maintained a number of bank accounts in the

Bahamas and other countries. Though Olson had $415,988 in identifiable assets

on the date of sentencing, the evidence indicates he had other assets that could

possibly enable him to pay the amount ordered. See Rogat, 924 F.2d at 985. In

fact, at sentencing, Olson stated:

And wherever the money -- the money went into those accounts, and
there should be a trail of where that money is. There is no doubt that
when they get the bank information from the Bahamas, it will be very
easy to trail that money and find out where it went. That’s what
we’re waiting for, and that’s something I haven’t been able to get
and they haven’t been able to get, was the accounting from the banks
of where that money was paid and where it went. As soon as that’s
sent to them, there is no doubt that they can follow that money and
see where it went. . . . There should have been plenty of money to
take care of [the victims], and I am surely sorry that they’re not
getting their money back.

In sum, under the facts of this case, Olson failed to meet his burden of

showing that he could not make full restitution because he could not explain what

happened to the $5.6 million he received from his victims. Thus, we hold that the

district court did not abuse its discretion in ordering full restitution.

II. Factual Basis

The VWPA states that in determining the amount of a restitution order, the

sentencing court must “consider” the defendant’s financial condition in imposing

restitution. 18 U.S.C. § 3664(a). “Although advisable to do so, the sentencing

judge need not express explicit reliance on each of the mandatory factors.”

-8-
United States v. Clemmons, 48 F.3d 1020, 1023 (7th Cir. 1995) (citation omitted),

overruled on other grounds by United States v. Allender, 62 F.3d 909 (7th Cir.

1995). But "[w]hen there is substantial ambiguity as to whether the judge

considered the statutory factors, specific factual findings in the record may be

required for effective appellate review." Rogat, 924 F.2d at 986.

In this case, the record contains detailed information regarding Olson’s

financial condition and earning potential. The restitution and sentencing hearings

focused entirely on Olson’s use of offshore accounts and the location of the

missing money. Thus, we conclude that the record demonstrated that the

sentencing court sufficiently “considered” Olson’s ability to pay in ordering the

restitution order. Accordingly, we hold that the district court was not required to

state why Olson failed to show that he could not satisfy the restitution order. The

judgment of the district court is AFFIRMED.

-9-