FILED
NOT FOR PUBLICATION DEC 20 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 10-50220
Plaintiff - Appellee, D.C. No. 2:05-cr-00316-DSF-4
v.
MEMORANDUM *
RICHARD B. LEONARD, aka Seal D.,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
Dale S. Fischer, District Judge, Presiding
Submitted December 5, 2012 **
Pasadena, California
Before: PREGERSON, PAEZ, and HURWITZ, Circuit Judges.
Richard Leonard appeals a $2,915,427.16 restitution order, imposed after he
pleaded guilty to conspiring to defraud the United States of tax revenue in violation
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
of 18 U.S.C. § 371 and to willfully attempting to evade assessment and payment of
individual income taxes in violation of 26 U.S.C. § 7201. “Provided that it is within
the bounds of the statutory framework, a restitution order is reviewed for abuse of
discretion.” United States v. Brock-Davis, 504 F.3d 991, 996 (9th Cir. 2007)
(citations omitted).
1. Leonard argues that the district court improperly relied on the “bank
deposits” method of determining the amount of distributions made to Leonard and his
co-conspirators. “The critical question is whether the government’s investigation has
provided sufficient evidence to support an inference that an unexplained excess in
bank deposits is attributable to taxable income.” United States v. Stone, 770 F.2d 842,
844-45 (9th Cir. 1985). “The adequacy of a bank deposits investigation necessarily
turns on its own circumstances.” Id. at 845 (internal quotation marks and citation
omitted). Here, although some records from the overseas bank in which relevant
deposits were made were not available, the evidence presented was adequate to
establish the amount of taxable income. See United States v. Hall, 650 F.2d 994, 996
n.4 (9th Cir. 1981) (noting that the bank deposits method is “a circumstantial way of
establishing unreported income”). In light of the Government’s burden to prove the
restitution amount by a preponderance of the evidence, the method used here was
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sufficient to provide a “reasonable estimate” of the loss. 18 U.S.C. § 3664(e); see also
United States v. Ali, 620 F.3d 1062, 1073-74 n.10 (9th Cir. 2010).
2. Leonard was not denied a meaningful opportunity to be heard on the issue
of restitution. See United States v. Weir, 861 F.2d 542, 546 (9th Cir. 1988). Unlike
Weir, Leonard had ample notice and an opportunity to dispute the final restitution
amount. The district court held a lengthy restitution hearing at which Leonard was
allowed to cross-examine the Government’s witnesses and present his own case.
Leonard was also allowed to file several sentencing memoranda.
3. Leonard’s argument that the district court abused its discretion by failing to
invoke the so-called “complexity exception” of 18 U.S.C. § 3663A(c)(3)(B) was
waived. In his plea agreement, Leonard agreed “to make full restitution for the losses
caused by [his] activities” and not to appeal the imposition of restitution, although he
retained the ability to appeal the terms and amount of restitution.
4. Both parties agree that a remand is necessary for the court to set a restitution
payment schedule. See Ward v. Chavez, 678 F.3d 1042, 1046-51 (9th Cir. 2012). In
setting that schedule, the district court should consider “the financial resources and
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other assets of the defendant.” 18 U.S.C. § 3664(f)(2)(A). The district court may also
consider whether “nominal periodic payments” are appropriate. 18 U.S.C. §
3664(f)(3)(B). Finally, because a remand is necessary and the record does not make
clear whether the district court was aware of its discretion to apportion restitution
under 18 U.S.C. § 3664(h), the district court may also reconsider on remand its
decision to impose upon Leonard the full amount of tax losses caused by the
conspiracy.
AFFIRMED IN PART, VACATED AND REMANDED IN PART.
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