14‐820‐cr
United States v. Stevens
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 25th day of October, two thousand sixteen.
PRESENT: RALPH K. WINTER,
DENNY CHIN,
CHRISTOPHER R. DRONEY,
Circuit Judges.
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UNITED STATES OF AMERICA,
Appellee,
v. 14‐820‐cr
TROY D. STEVENS, JR.,
Defendant‐Appellant.
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FOR APPELLEE: MARTIN E. COFFEY, Assistant United States
Attorney (Peter A. Norling, Assistant United
States Attorney, on the brief), for Robert L.
Capers, United States Attorney, Eastern
District of New York, Brooklyn, New York.
FOR DEFENDANT‐APPELLANT: STEVEN Y. YUROWITZ, New York, New
York.
Appeal from the United States District Court for the Eastern District of
New York (Irizarry, C.J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment is AFFIRMED in part and the case is
REMANDED for further proceedings consistent with this order.
Defendant‐appellant Troy D. Stevens, Jr., appeals the district courtʹs
judgment entered March 5, 2014 to the extent it sentenced him to 63 monthsʹ
imprisonment for bank fraud under 18 U.S.C. § 1344 and ordered him to pay restitution
to his former partnership, Kinpit Associates (ʺKinpitʺ), under the Mandatory Victims
Restitution Act (ʺMVRAʺ), 18 U.S.C. § 3663A.1 We hold that Stevens waived his right to
appeal his prison sentence, and accordingly affirm that portion of his sentence. As to
the district courtʹs restitution order as to Kinpit, we remand the case for the district
court to conduct a hearing to answer certain factual questions. We assume the partiesʹ
familiarity with the facts and the issues on appeal.
Stevens was the general partner of Kinpit, a limited partnership formed to
own and operate apartment buildings in New York City. Between July 7, 2000 and May
1 Stevens was also convicted of aiding and assisting in the preparation of a false
income tax return under 26 U.S.C. § 7206(2) and was sentenced to 12 monthsʹ imprisonment and
ordered to pay $377,141.00 in restitution to the Internal Revenue Service. Stevens has not
appealed this conviction and sentence.
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16, 2003, without knowledge or approval of the limited partners, Stevens fraudulently
obtained loans and mortgages for Kinpit using a forged partnership agreement and
consent form.2 Stevens then consolidated the initial four loans into a single $4.6 million
loan issued by North Fork Bank and later acquired by Capital One Bank NA (the
ʺCapital One loanʺ) and pledged Kinpitʹs buildings as collateral.3 In 2005, Kinpitʹs
limited partners filed suit against Stevens for breach of contract, breach of fiduciary
duties, misuse of partnership assets, and fraud. See Garber v. Stevens, No. 601917/05
(N.Y. Sup. Ct. 2005). In October 2012, the parties settled the civil suit as Stevens
conveyed his 50% interest in Kinpit to the limited partners in exchange for a release of
all claims. On August 22, 2013, Kinpit sold its buildings for $10.35 million. Shortly
thereafter, Kinpit paid off the Capital One loan in full.
Stevens was indicted on October 2, 2012, pled guilty on May 28, 2013, and
sentenced as set forth above on February 28, 2014.
I. Imprisonment
In his plea agreement, Stevens waived his right to appeal a sentence that
was at or below 87 monthsʹ imprisonment. ʺWaivers of the right to appeal a sentence
are presumptively enforceable.ʺ United States v. Riggi, 649 F.3d 143, 147 (2d Cir. 2011)
2 Stevens was also charged with fraudulently obtaining a $600,000 loan on May 9, 2005.
While he did not plead guilty to this count, the district court considered the $600,000 loan as relevant
conduct when determining Stevensʹs intended loss.
3For convenience, we treat the consolidated loan ‐‐ as do the parties ‐‐ as having
been made by Capital One.
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(quoting United States v. Arevalo, 628 F.3d 93, 98 (2d Cir. 2010)) (internal quotation marks
omitted). Exceptions to this rule ʺoccupy a very circumscribed area of our
jurisprudence.ʺ United States v. Gomez‐Perez, 215 F.3d 315, 319 (2d Cir. 2000). Stevens
argues that his plea is invalid because it was not knowing, voluntary, or competent
because his counsel erroneously informed him that he was subject to an 18‐level loss
enhancement under the Sentencing Guidelines when he claims he was not.
On the present record, Stevens has not demonstrated that his plea was not
entered knowingly and voluntarily. Stevens signed the plea agreement, affirming that
he entered into its terms knowingly and voluntarily. Stevens acknowledged at his plea
hearing that he had an adequate opportunity to review the plea agreement with his
attorney, he understood everything in the plea agreement, and he understood that the
estimated guidelines range was 63 to 78 months. Stevens also stated that he was
pleading guilty voluntarily, and the district court was satisfied that Stevens understood
the nature of the charges and the consequences of the plea, and that his plea was
entered voluntarily. At sentencing, which occurred over two days on December 2, 2013
and February 28, 2014, Stevensʹs counsel twice agreed to the sentencing guidelines
range. Stevens is bound by the plea waiver. To the extent that Stevens argues that his
guilty plea was involuntary due to ineffective assistance of counsel, we decline to hear
the claim now. He may raise the issue in a motion for relief pursuant to 28 U.S.C.
§ 2255. See United States v. Gaskin, 364 F.3d 438, 467‐68 (2d Cir. 2004).
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II. Restitution
Stevens argued to the district court, and maintains on appeal, that he owes
no restitution to Kinpit because Capital One Bank, the victim of the bank fraud, was
made whole when it received payment for the full amount of the Capital One loan from
Kinpit after the sale of the property. Stevens further argues that, to the extent his bank
fraud caused any harm to Kinpit, Kinpit agreed to release him from any claims related
to the fraudulently obtained mortgage in exchange for Stevensʹs surrender of his 50%
interest in Kinpit.
We review a district courtʹs order of restitution for abuse of discretion.
United States v. Boccagna, 450 F.3d 107, 113 (2d Cir. 2006). ʺTo identify such abuse, we
must conclude that a challenged ruling rests on an error of law, a clearly erroneous
finding of fact, or otherwise cannot be located within the range of permissible
decisions.ʺ United States v. Pearson, 570 F.3d 480, 486 (2d Cir. 2009) (quoting Boccagna,
450 F.3d at 113). We conclude that the district court did not make sufficient factual
findings, which are necessary to our review of the restitution award.
The MVRA makes restitution mandatory for certain categories of crimes,
including those that cause property loss to their victims. 18 U.S.C. § 3663A(a); United
States v. Thompson, 792 F.3d 273, 277 (2d Cir. 2015). ʺ[R]estitution is authorized only for
losses that [were] . . . directly caused by the conduct composing the offense of
conviction and only for the victimʹs actual loss.ʺ United States v. Marino, 654 F.3d 310,
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319‐20 (2d Cir. 2011) (internal quotation marks and citations omitted). Because
restitution is intended to make the victim whole, it must be based only on the actual
loss caused by the scheme. 18 U.S.C. § 3663A(b)(1); United States v. Lacey, 699 F.3d 710,
721 (2d Cir. 2012). Restitution is not intended to provide a victim with a windfall, that
is, more than it actually lost. Thompson, 792 F.3d at 277.
In cases involving monetary loss, the actual loss calculation must take into
account ʺthe value (as of the date the property is returned) of any part of the property
that is returned.ʺ 18 U.S.C. § 3663A(b)(1)(B); accord Thompson, 792 F.3d at 280 (ʺUnder
the plain text of § 3663A(b), [a defendantʹs] total restitution liability under the MVRA is
. . . the value of the stolen property . . . minus the value of what he returned to the
victims . . . .ʺ). In other words, in a mortgage fraud case where banks receive the
pledged collateral upon foreclosure, in calculating restitution, the district court must
credit any value of the collateral. United States v. Lacey, 699 F.3d at 721; see also United
States v. Cavallo, 790 F.3d 1202, 1240 (11th Cir. 2015) (reversing and remanding
ʺ[b]ecause the restitution amount ordered by the district court does not take into
account the value of the collateral properties to the victims, [and thus] does not
represent the actual loss to the victims, but instead confers a windfall on them.ʺ).
In some cases, as here, a victim may receive reimbursement for its losses
from a third party prior to entry of a restitution order. Any such third‐party
compensation should not affect the amount of the award. Thompson, 792 F.3d at 278.
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Pursuant to § 3664(j)(1), where a third party has assumed the victimʹs losses by
reimbursing the victim, the court is to order payment of restitution to the third party.
Id. But the third‐party provider of compensation is not equivalent to a victim, and ʺany
losses suffered by those parties in the course of compensating a victim cannot increase a
district courtʹs calculation of the defendantʹs restitution obligations under § 3663A(b).
Id. at 279. ʺ[A]ny restitution paid by a defendant to a third party [compensator] cannot
exceed the amount the defendant could lawfully be ordered to pay the original victim.ʺ
Id. (emphasis added).
Here, Capital One was a victim of Stevensʹs fraud, as it made a loan to
Kinpit based on his fraud. But then Kinpit sold the properties in question, using some
of the proceeds to repay Capital One in full for the loan. The district court ordered
Stevens to pay restitution on account of Capital Oneʹs losses to Kinpit.
We are unable, because of a lack of clarity in the record, to determine
whether the district court properly applied the principles set forth above. We are
uncertain, for example, as to the following:
1. Was the district court treating Kinpit as a victim of Stevensʹs bank fraud
for purposes of the MVRA, or as a third‐party compensator?
2. What were Capital Oneʹs ʺactual lossesʺ?
3. Did the restitution award include compensation for Kinpitʹs losses (as
opposed to Capital Oneʹs losses)?
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4. Did the restitution award exceed the amount of Capital Oneʹs actual losses
resulting from Stevensʹs bank fraud?
5. Were any of the loan proceeds diverted by Stevens, and, if so, how much
went to Kinpit?
6. Is Kinpit is receiving a windfall (i.e., is Stevens being ordered to pay
monies to Kinpit he has already paid)?
7. Was the settlement agreement between Stevens and Kinpit intended to
compensate Kinpit for its losses resulting from Stevensʹs bank fraud, and
if so, to what extent?
Accordingly, we seek supplementation of the record by the district court pursuant to
our practice in United States v. Jacobson, 15 F.3d 19, 22 (2d Cir. 1994), regarding the above
questions. We remand to the district court such jurisdiction as is necessary to answer
the questions above. This Court (and this panel) shall retain jurisdiction over this
matter. Upon a decision by the district court, full jurisdiction will be restored to this
Court and this panel by either party informing us by letter of the district courtʹs
decision. The parties will file simultaneous briefs no later than within thirty days of the
receipt of such a letter by the Court. Further oral argument will be at the Courtʹs
discretion.
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For the foregoing reasons, the district courtʹs sentence is AFFIRMED to
the extent that it imposed imprisonment for Stevensʹs bank fraud, and the case is
REMANDED to the district court for further proceedings consistent with this order.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
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United States v. Stevens
Combined Opinion