UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-4427
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
DARLENE M. ALTVATER,
Defendant - Appellant.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Deborah K. Chasanow, District Judge.
(8:12-cr-00065-DKC-1)
Argued: September 16, 2014 Decided: November 18, 2014
Before MOTZ and KING, Circuit Judges, and DAVIS, Senior Circuit
Judge.
Affirmed in part; vacated and remanded in part by unpublished
opinion. Senior Judge Davis wrote the opinion, in which Judge
Motz and Judge King joined.
ARGUED: Gerald Chester Ruter, Baltimore, Maryland, for
Appellant. Hollis Raphael Weisman, OFFICE OF THE UNITED STATES
ATTORNEY, Greenbelt, Maryland, for Appellee. ON BRIEF: Rod J.
Rosenstein, United States Attorney, OFFICE OF THE UNITED STATES
ATTORNEY, Baltimore, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
DAVIS, Senior Circuit Judge:
A jury convicted Darlene M. Altvater of two counts of
making false statements in an application for worker’s
compensation benefits, in violation of 18 U.S.C. § 1920. The
district court sentenced Altvater to five months of
imprisonment, followed by five months of home detention and
three years of supervised release, and ordered that she pay
restitution in the amount of $59,592.58. On appeal, Altvater
challenges the district court’s determination of the loss amount
under the Sentencing Guidelines and the court’s calculation of
the amount of restitution. For the reasons that follow, we
affirm in part and vacate and remand in part.
I.
A.
Altvater was an employee of the United States Postal
Service when she was injured on the job in December 2000. Her
claim for federal worker’s compensation benefits was accepted in
January 2001.
For each subsequent year, Altvater filled out a “1032 form”
to continue receiving benefits. In September 2005, she reported
on her 1032 form that she had been involved in a business
enterprise beginning in April 2005. She described the
enterprise as a family business, and indicated that she received
no payment for her work. Altvater repeated this information on
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her forms for 2006, 2007, and 2008. She averred that she
answered phones, spoke with customers, and input data into a
computer for up to fifteen hours a week, but received no
earnings. On her 2009 and 2010 forms, however, Altvater did not
report any involvement in a business. In fact, from April 2005
to December 2011, Altvater owned an interest in a spa and gym,
and she worked there for several hours each week.
B.
A federal grand jury returned a superseding indictment
against Altvater on September 5, 2012, charging her with two
counts of committing fraud to obtain federal worker’s
compensation benefits. The indictment alleged that on or about
November 24, 2009, and again on or about December 9, 2010,
Altvater applied for benefits and knowingly made a false or
fraudulent statement to receive benefits to which she was not
entitled and which exceeded $1,000.
Altvater proceeded to trial, during which Angella Winn, a
district director for the Office of Workers’ Compensation
Programs (“OWCP”), testified. Winn explained that OWCP provides
compensation to injured federal workers to make them whole. For
example, if a federal worker is injured and is only able to work
four hours a day after the injury, OWCP pays that employee for
the other four hours of a full-time work schedule.
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Winn further explained that, each year, OWCP provides the
injured federal worker with a 1032 form to support continuing
eligibility for benefits. The 1032 form requires the claimant
to report any outside employment from the preceding fifteen
months, the rate of pay received from that employment, and any
ownership interest in a business enterprise maintained in the
preceding fifteen months. In addition, the 1032 form requires
the claimant to notify OWCP of any improvement in her medical
condition. OWCP reviews the 1032 form to determine whether
benefits must be reduced based on a change in the claimant’s
employment or improvement in her condition.
Following Winn’s testimony, the jury found Altvater guilty
of both counts.
In the presentence report (“PSR”), the probation officer
recommended an eight-level increase in the offense level based
on the loss figure calculated by the government, namely
$98,973.70. See U.S.S.G. § 2B1.1(b)(1)(E). The probation
officer also recommended that restitution be equal to the loss
amount.
The government’s loss calculation was based on a memorandum
prepared by Winn. Winn calculated the loss by first estimating
Altvater’s imputed earnings from the spa between April 2005 and
December 2011. Next, she determined the amount of benefits to
which Altvater would have been entitled had she reported that
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income. Finally, Winn subtracted the amount of benefits to
which Altvater was actually entitled between April 2005 and
December 2011 from the total amount of benefits she received
during that period.
At the sentencing hearing, Winn testified that her estimate
of Altvater’s earnings—i.e., her wage earning capacity (“WEC”)—
was derived from information provided by the State of Maryland
Department of Labor, Licensing, and Regulation. Winn obtained
the rate of pay for a first-line supervisor or manager of
personal service workers—the job with most similar duties to
those performed by Altvater—and then adjusted that amount for
various economic factors throughout the relevant time period.
The government argued at sentencing that Altvater’s
employment and (imputed) earnings in the years prior to the
charged conduct, during which Altvater worked but failed to
report her income, constituted relevant conduct for the purpose
of calculating loss. The district court disagreed, however,
reasoning that the government had failed to charge a scheme and
that the loss figure should be calculated beginning August 2008,
or fifteen months prior to the execution of the false 1032 form,
in November 2009, on which count one of the indictment was
based. The court, therefore, requested that the government
calculate the amount of benefits that Altvater received between
August 2008 and December 2011, when she stopped receiving
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benefits. Notably, the court included payments subsequent to
the execution of the false 1032 form in December 2010; the
government explained that, had Altvater reported her income from
the spa, OWCP would have reduced her benefits going forward to
recoup prior overpayments.
The government ultimately determined that Altvater received
$98,359.89 in benefits between August 2008 and December 2011.
Based on her WEC, however, she had only been entitled to
$35,667.40. Accordingly, the government asserted, the resultant
loss was $62,692.49.
The district court accepted the government’s calculation of
the loss amount, and applied a six-level increase in the offense
level. See U.S.S.G. § 2B1.1(b)(1)(D). The court explained that
using Altvater’s WEC to determine the loss was appropriate
because the government did not have information on her actual
income from the spa.
After determining an advisory Guidelines range of ten to
sixteen months of imprisonment, the court imposed a split
sentence, sentencing Altvater to five months of imprisonment,
followed by five months of home detention and three years of
supervised release. The court again asked the government to
recalculate the restitution amount, and set another hearing date
to resolve that issue.
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In a supplemental memorandum regarding restitution, the
government calculated the loss incurred during three time
periods: (1) from August 2008 to May 2009, (2) from May 2009 to
April 2010, and (3) from April 2010 to December 2011. Adding
the loss amounts from each time period, the government requested
that restitution be ordered in the amount of $59,592.58.
The court accepted the government’s proposed calculation,
and ordered that Altvater pay $59,592.58 in restitution.
Altvater timely appealed.
II.
A.
Altvater first argues that the district court erred in
relying on her WEC to calculate loss. She contends that,
because the government has substantial investigative powers to
accurately assess her spa income, it “should have introduced at
the sentencing hearing evidence of those earnings,” instead of
relying on standardized economic data about what a typical spa
worker would have made. Altvater Br. 30. She maintains that
she had no earnings from her work at the spa, and thus income
may not be properly imputed to her.
In reviewing the district court’s loss calculation under
the Sentencing Guidelines, “‘we review the district court’s
legal conclusions de novo and its factual findings for clear
error.’” United States v. Manigan, 592 F.3d 621, 626 (4th Cir.
7
2010) (quoting United States v. Layton, 564 F.3d 330, 334 (4th
Cir. 2009)). We will “find clear error only if, ‘on the entire
evidence,’ [we are] ‘left with the definite and firm conviction
that a mistake has been committed.’” Id. at 631 (quoting Easley
v. Cromartie, 532 U.S. 234, 242 (2001)).
“‘In a case involving diversion of government program
benefits, loss is the value of the benefits diverted from
intended recipients or uses.’” United States v. Dawkins, 202
F.3d 711, 714 (4th Cir. 2000) (quoting U.S.S.G. § 2F1.1 cmt.
n.8(d)). “[W]hen determining losses for sentencing purposes, a
court must subtract the amount of money or benefits to which a
defendant is legitimately entitled from the amount fraudulently
claimed.” United States v. Miller, 316 F.3d 495, 499 (4th Cir.
2003); see also Dawkins, 202 F.3d at 715. “In calculating the
total loss attribution, a district court ‘need only make a
reasonable estimate of the loss.’” United States v. Jones, 716
F.3d 851, 860 (4th Cir. 2013) (quoting U.S.S.G. § 2B1.1 cmt.
n.3(C)). The government bears the burden of proving the loss
amount. Dawkins, 202 F.3d at 714.
Applying the above standard, we reject Altvater’s argument
that she should not be held accountable for having earned any
money while working at the spa. Altvater was a part owner in
the spa. The “income” she earned would not necessarily have
been a normal paycheck for hours worked; rather, it was the
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amount of money she saved as an owner by not having to pay a
third party. In other words, she was able to pay herself a
larger amount of income out of her business because she did not
need to pay someone to do the work that she did. Thus, even
though she did not receive a paycheck, income from her work at
the spa was properly imputed to her.
Given that Altvater persisted in her assertion that she
received no income from her spa business, the district court was
required to estimate her earnings in order to calculate the
amount of benefits to which she was lawfully entitled. The
amount of money Altvater would have had to pay another employee
to do the work that she did was a reasonable substitute for her
actual earnings. See Jones, 716 F.3d at 860. The district
court, therefore, did not err in relying on Altvater’s WEC to
determine the loss amount.
B.
Altvater next argues that the district court erred in
ordering restitution for the period between December 2010, when
she executed the second false 1032 form, and December 2011, when
she stopped receiving benefits. She contends that she may only
be ordered to pay restitution for the offense of conviction, and
as the 1032 form executed in 2010 covered just the preceding
fifteen months, the restitution amount should not have included
payments received after that time.
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We review a restitution order for abuse of discretion.
United States v. Hoyle, 33 F.3d 415, 420 (4th Cir. 1994).
Under the Mandatory Victims Restitution Act, the district
court must order the defendant to make restitution to victims of
an offense against property. 18 U.S.C. § 3663A(a),
(c)(1)(A)(ii). The statute “‘authorize[s] an award of
restitution only for the loss caused by the specific conduct
that is the basis of the offense of conviction.’” United States
v. Blake, 81 F.3d 498, 506 (4th Cir. 1996) (quoting Hughey v.
United States, 495 U.S. 411, 413 (1990)). In other words, a
court may only award restitution for loss that results from
“‘conduct underlying an element of the offense of conviction.’”
United States v. Davis, 714 F.3d 809, 813 (4th Cir. 2013)
(quoting Blake, 81 F.3d at 506).
We agree with Altvater that she may not be held liable in
restitution for payments received after December 2010, as the
receipt of payments after that time is not conduct that forms
the offense of conviction. The superseding indictment charged
Altvater with perjury on the November 24, 2009 1032 form and
again on her December 9, 2010 1032 form. The material falsehood
on each 1032 form was that Altvater failed to report that she
had been employed and earning income for the previous fifteen
months. In this case, therefore, the acts of perjury relate
back to the fifteen months prior to the filing of the 1032
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forms, and thus restitution may only be ordered for those
periods. This “look-back” approach in calculating restitution
in § 1920 prosecutions is precisely the approach employed by the
government and endorsed by this Court in Dawkins. See
Appellee’s Brief in No. 99-4240 (4th Cir.), 1999 WL 33607403, at
*4–5 (July 13, 1999) (“Dawkins received a total of $64,356.00 in
disability benefits from November 18, 1995 [fifteen months
preceding the filing of the first perjurious 1032 form on
February 18, 1997,] through December 1, 1997 [the date Dawkins
filed the second perjurious form 1032], the period covered by
his two false form 1032s.”) (bracketed material added); Dawkins,
202 F.3d at 714 (“The district court found that the loss for
sentencing purposes was the total amount of benefits paid to
Dawkins during the time covered by the February and December
1997 1032 forms, or $64,536.” [sic]).
Accordingly, we conclude that the district court committed
an error of law and thereby abused its discretion in ordering
restitution for the period between December 2010 and December
2011, and we remand for a reduction in the amount of
restitution. On remand, as defense counsel conceded at oral
argument, the district court may, in its discretion, properly
impose a fine (as it had expressly declined to do at sentencing
in light of the amount of restitution it had imposed). See 18
U.S.C. § 1920.
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III.
For the reasons set forth, we affirm in part and vacate in
part the restitution order and remand this case to the district
court for further proceedings consistent with this opinion.
AFFIRMED IN PART;
VACATED AND REMANDED IN PART
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