United States Court of Appeals
For the First Circuit
No. 03-1333
UNITED STATES OF AMERICA,
Appellee,
v.
NANCY J. CHEAL,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[The Hon. Rya W. Zobel, U.S. District Judge]
Before
Torruella, Circuit Judge,
Gibson, Senior Circuit Judge*,
and Lipez, Circuit Judge,
William A. Gilmore, Jr., for appellant.
Diane C. Freniere, with whom Michael J. Sullivan, U.S.
Attorney, was on brief, for appellee.
November 15, 2004
____________________
*
Hon. John R. Gibson, of the Eighth Circuit, sitting by
designation.
LIPEZ, Circuit Judge. The defendant-appellant in this case,
Nancy J. Cheal, pleaded guilty to five counts of mail fraud (18
U.S.C. § 1341) and two counts of wire fraud (18 U.S.C. § 1343),
after being charged with bilking investors out of more than $2
million in an "international bank trading" scheme. The District
Court then sentenced Cheal to a term of imprisonment of 87 months,
with three years of supervised release to follow. The District
Court also ordered Cheal to pay restitution in the amount of $2.1
million.
Cheal now raises four issues on appeal: (1) the compliance of
her change-of-plea hearing with the requirements of Rule 11 of the
Federal Rules of Criminal Procedure; (2) the evidentiary basis for
the court's enhancement for obstruction of justice; (3) the court's
failure to grant a downward departure on the basis of her alleged
reduced mental capacity; (4) the timeliness of the court's entry of
a restitution order.
Cheal's argument about the timing of her restitution order
raises an issue of first impression in this circuit. Congress
passed the Mandatory Victims Restitution Act of 1996, Pub. L. No.
104-132, 110 Stat. 1227 (codified as amended in scattered sections
of 18 U.S.C.), to provide full restitution to identifiable victims
of certain crimes, including mail and wire fraud, regardless of a
defendant's ability to pay. One provision of that act, 18 U.S.C.
§ 3664(d)(5), directs that "the court shall set a date for the
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final determination of the victim's losses, not to exceed 90 days
after sentencing." Cheal argues that the restitution order in this
case, which was entered 127 days after sentencing, was invalid. As
we explain below, any error that the district court may have
committed by entering Cheal's restitution order after the 90-day
period did not constitute plain error. We therefore affirm Cheal's
convictions and sentence in their entirety.
I.
We take the facts from the presentence report ("PSR"), the
transcript of the plea hearing, and the district court’s findings.
See United States v. Voccola, 99 F.3d 37, 43 (1st Cir. 1996).1
At the time of her criminal conduct, Nancy Cheal was 60 years
old and lived in a five-bedroom double-wide trailer home along with
her second husband and four great-grandchildren. She describes
herself as the pastor to a small, nondenominational church in her
hometown of Bunnell, Florida.
Beginning approximately eight years before the criminal
conduct at issue in this case, Cheal ran a business out of her home
called Relief Enterprise, Inc. Cheal claimed to run several
1
Cheal objected generally to the PSR’s description of the
facts, but she offered no specifics to counter that description.
"[I]f the defendant’s objections are merely rhetorical and
unsupported by countervailing proof, the district court is entitled
to rely on the facts in the PSR." United States v. Cyr, 337 F.3d
96, 100 (1st Cir. 2003).
-3-
private clubs somehow connected to Relief Enterprise with such
names as the "Get America Out of Debt Private Club," the
"Fatherless Children Private Club," and the "Senior Citizens’
Private Club." Although the purpose served by these clubs is not
clear, they seemed to be perpetually short of the funds that Cheal
solicited on their behalf.
In October 1999, Cheal organized and began to advertise the
investment scheme that led to her criminal convictions.2 Its basic
nature was simple fraud: by falsely asserting that she was an
experienced trader in international securities and had the help of
another experienced trader, Cheal induced thousands of investors to
send her money in the hopes of an astronomical return on their
investment. She told investors that the scheme paid 100% of the
initial investment per week for twelve weeks.
Cheal was vague about the mechanism behind these remarkable
numbers, referring only to "overseas trading" of some kind and the
services of a renowned trader of international securities, one of
only seven people in the world licensed to trade in a certain
(unspecified) kind of investment. She also claimed to have trading
experience herself. Cheal insisted that investors’ money would not
itself be used for the trades; instead, she would place it in a
"safekeeping, non-depletion" account, which meant that it would not
2
In addition to this criminal case, her conduct is the subject
of a pending civil case brought by the Securities and Exchange
Commission, titled S.E.C. v. Cheal, Civ. No. 00-10182-EFH.
-4-
be risked in the deal.
Cheal also laced the scheme with religious and charitable
elements, sometimes claiming that Relief Enterprise had bought a
bank in Oklahoma, which, because it was on an "Indian Reservation,"
would not be subject to the usual federal regulations and could
therefore offer mortgages at extremely low rates to help poor
people buy homes. At other times, Cheal claimed that the purpose
of the enterprise was to raise money to build a church. Although
the precise charitable purposes varied, Cheal consistently
maintained that she wanted to benefit the public and "help the
little guy."
Along with other employees of Relief Enterprise working at her
direction, Cheal disseminated her investment offer through faxes,
e-mails, letters, and telephone calls. A referral fee of 1 to 5%
also provided an incentive for people to spread the word. As a
result of these efforts, Relief Enterprise managed to raise more
than $2 million in a few months.
Not surprisingly, Relief Enterprise did not make its promised
payments. Originally, the first payouts were to come in late
October or early November 1999. As those dates came and went,
Cheal offered excuses for the delay, ranging from a death in the
trader’s family to the Y2K computer bug. Then Cheal's scheme came
to the attention of law enforcement.
On October 27, 1999, a disgruntled investor contacted the U.S.
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Secret Service with complaints about Relief Enterprise. Because of
the use of the mails to carry out the scheme, the Secret Service
passed the complaints on to the U.S. Postal Service. On October
28, a postal inspector, Louis Keith, met Cheal at a convenience
store near her home for an interview. Cheal signed two
declarations stating that she "initially had a solicitation to
obtain loans to build a church" and that others had modified this
solicitation without her knowledge or consent. Estimating that
Relief Enterprise had so far collected between three and four
thousand dollars, she said that she would refund the money by
November 1 that had been sent to her by wire transfer and would
return to the inspector all funds received in letters and packages.
Finally, she promised "to cease receiving letters and packages
relating to this solicitation and return them to the sender," and
she authorized the Postal Service to intercept and return any
future packages on her behalf.
On November 8, 1999, Cheal met again with Inspector Keith and
gave him a box containing 1,296 checks totaling approximately
$171,000.3 At this meeting, Inspector Keith confronted Cheal with
evidence that she had made the 1200% (100% per week over twelve
weeks) offer herself to at least one investor. She admitted that
she had and that she "may" have made the offer to others.
3
Later that month, the Postal Service returned these checks
to their senders.
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Cheal, however, was deceiving Inspector Keith at this meeting.
Rather than returning to him all of the funds that Relief
Enterprise had so far collected, she had in fact instructed her
employees to segregate investments into those worth less than $400
and those worth more. The smaller investments she gave to
Inspector Keith; the larger investments, equaling at that point at
least $1.3 million, she kept.
Subsequently, Cheal contacted the senders of the smaller
investments to explain her legal difficulties and to ask them to
send their money again by a private courier such as Federal Express
or UPS. In some cases, one of Cheal's employees even explained
that she had given the postal inspector only checks for less than
$400 and had kept the rest and asked the investors to keep this
information a secret.4 Cheal continued soliciting new investments
as well.
Cheal used the proceeds from her investment scheme in a
variety of ways. She paid off more than $100,000 in personal debt,
gave $110,000 to a friend, gave bonuses to her attorney and
employees, and made numerous purchases, including a minivan, a new
trailer home for $67,000, and a big-screen TV. At one point, she
tried to buy a $400,000 home with cash but was turned down.
On February 28, 2001, a grand jury sitting in the U.S.
4
To one investor, for example, a Relief Enterprise employee
wrote: "The Postal Inspector requested we send ALL pkgs received
back. We sent back all under $400. (Don't tell him!)"
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District Court for the District of Massachusetts returned an
indictment charging Cheal with defrauding others of more than $2.1
million. The indictment listed five counts of mail fraud under 18
U.S.C. § 1341 and two counts of wire fraud under 18 U.S.C. § 1343.
Cheal was arrested on March 2, 2001, in the Middle District of
Florida and released on bond. On March 13, 2001, Cheal appeared
for arraignment before the U.S. District Court in Massachusetts,
which appointed counsel for her.
On September 6, 2001, the District Court ordered a psychiatric
evaluation of Cheal. On January 8, 2002, after psychiatrists hired
by the government and the defense had both advised that Cheal was
competent to stand trial, the District Court agreed and the case
moved forward.
On October 15, 2002, the first day of trial, Cheal pleaded
guilty to all seven counts against her, and the court held a
change-of-plea hearing as required by Rule 11 of the Federal Rules
of Criminal Procedure. The Probation Office then prepared a PSR
recommending a total offense level of 31 under the federal
sentencing guidelines: a base offense level of 6, plus 13 because
the total cost of the scheme to victims was more than $2.5 million,
plus 2 for more-than-minimal planning, plus 2 because the crimes
involved mass-marketing, plus 2 because Cheal misrepresented
herself as acting on behalf of a charitable or religious agency.
In addition, the PSR determined that Cheal should receive a four-
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level upward adjustment for her leadership role and a two-level
upward adjustment for willful obstruction of justice. The PSR
recommended that she receive no credit for acceptance of
responsibility.
At the sentencing hearing on February 20, 2003, Cheal objected
to the upward adjustment for willful obstruction and asked for a
downward departure based on diminished mental capacity. The
district court ultimately accepted the PSR’s recommendations,
except that it did grant a two-level downward adjustment for
acceptance of responsibility. It also ordered restitution. Cheal
filed a timely notice of appeal on March 4, 2003.5
II.
Appellants who claim relief because of an allegedly flawed
change-of-plea hearing face a high hurdle when they have not first
raised their objections in the court below. See United States v.
Pagan-Ortega, 372 F.3d 22, 27 (1st Cir. 2004). In such cases, we
5
Cheal also filed three motions around this time, all of
which were denied. On March 24, 2003, Cheal filed a motion with
this Court asking that we stay her incarceration pending appeal.
On March 27, 2003, we denied that motion without prejudice because
she had not sought such relief in the court below and had not shown
that she met the requirements of 18 U.S.C. § 3143(b)(1) (appellant
shall be detained unless not likely to flee or pose a danger to the
community, and appeal is not for purpose of delay and raises a
substantial question of law or fact). On April 1, 2003, Cheal
filed a motion to stay with the district court, which the court
denied the next day on the grounds that Cheal had not filed a
motion for relief from judgment of conviction. On April 3, 2003,
Cheal filed a motion with the district court for relief from
judgment of conviction, which the court denied the same day without
comment.
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review only for plain error. United States v. Olano, 507 U.S. 725,
733-34 (1993); see Fed. R. Crim. P. 52(b). After this case was
briefed and argued, the Supreme Court decided United States v.
Dominguez Benitez, __ U.S. __, 124 S. Ct. 2333, 159 L. Ed. 2d. 157
(2004), which further refined the standard for granting relief
based on a Rule 11 error that had not been preserved below. The
Court held that
a defendant who seeks reversal of his conviction after a
guilty plea, on the ground that the district court
committed plain error under Rule 11, must show a
reasonable probability that, but for the error, he would
not have entered the plea. A defendant must thus satisfy
the judgment of the reviewing court, informed by the
entire record, that the probability of a different result
is sufficient to undermine confidence in the outcome of
the proceeding.
124 S. Ct. at 2340 (citations and internal quotation marks
omitted). We apply this standard here. Of course, if there was no
error at all, we never reach the issue of the probability of a
different result.
A. Validity of Cheal’s Plea Colloquy
Cheal first contends that she consistently asserted her legal
innocence throughout the hearing, never fully agreeing to the
government's allegations and case against her, and that the court
therefore lacked a sufficient factual basis to accept her plea.
Second, Cheal claims that the court's failure to conduct the
change-of-plea hearing in accordance with Rule 11 meant that she
did not enter her plea intelligently, knowingly, and voluntarily.
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Although Cheal’s behavior during the plea colloquy was erratic, her
admissions, when combined with the government's evidence, provided
a sufficient basis for the plea, and the court’s procedure complied
as a whole with Rule 11.6 There was no error in the conduct of the
change-of-plea hearing.
1. The Factual Basis for Cheal's Plea of Guilty
Rule 11 requires that
there be an admission, colloquy, proffer, or some other
basis for thinking that the defendant is at least
arguably guilty. . . .
. . . .
On a plea, the question under Rule 11(f) is not whether
a jury would, or even would be likely, to convict: it is
whether there is enough evidence so that the plea has a
rational basis in facts that the defendant concedes or
that the government proffers as supported by credible
evidence.
United States v. Gandia-Maysonet, 227 F.3d 1, 6 (1st Cir. 2000).
Cheal pleaded guilty to mail and wire fraud. To prove these
crimes, the government must show three elements: (1) a scheme to
defraud based on false pretenses; (2) the defendant's knowing and
willing participation in the scheme with the intent to defraud; and
(3) the use of interstate mail or wire communications in
furtherance of that scheme. United States v. Martin, 228 F.3d 1,
6
In our review, we consider the version of Rule 11 that was in
effect at the time of Cheal's change-of-plea hearing. See United
States v. Mercado, 349 F.3d 708, 709-10 (2d Cir. 2003), cert.
denied, __ U.S. __, 124 S. Ct. 1190, 157 L. Ed. 2d 1220 (2004). An
amended version became effective on December 1, 2002, after Cheal
pleaded guilty.
-11-
15 (1st Cir. 2000). "The factual predicate for the requisite mens
rea may be inferred from all the evidence alluded to at the Rule 11
hearing." United States v. Marrero-Rivera, 124 F.3d 342, 352 (1st
Cir. 1997); see also United States v. Japa, 994 F.2d 899, 903-04
(1st Cir. 1993).
It is true that Cheal made a number of statements throughout
the change-of-plea hearing contesting the government’s version of
the facts against her. After the government's initial recitation
of facts, for example, Cheal responded: "I agree with ten percent
of what he said, about ten percent of it is correct." She then
delivered a rambling narrative of her own version of the facts,
which included several denials that she was running or even knew
about the investment scheme promising a 1200% return over twelve
weeks. Cheal claimed that she had simply solicited loans to
purchase a bank that would help fund low-cost mortgages, and that
her employees had modified this plan without her consent or
knowledge. At first, Cheal claimed she had never sent faxes to
anyone. Then, when the court asked why she had a fax machine in
her home, she said she had sometimes faxed back "a prayer request,"
and then that she had responded to people "after they had been
promised a hundred percent return."
Cheal also read a prepared statement in which she admitted
that she misrepresented herself as being an experienced securities
trader, that she "recklessly mismanaged the loan proceeds received
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for Relief Enterprise from lenders," that "in setting up these
programs I made reckless decisions and judgments," and that she
recklessly allowed persons in my office . . . to
misrepresent the facts and nature of my loan program to
prospective lenders which resulted in persons sending
loan [sic] and money and applications to me with false
information about the program. . . . Among the false
statements provided to such lenders was that: (1) lenders
could expect 100 percent of the loan value return from
each one of their loans for twelve weeks . . .; and (2)
that all lenders’ moneys were to be kept in a secured
lenders’ account. So, to all these charges I do plead
guilty.
In a subsequent exchange with Cheal, the court tried to determine
whether Cheal was admitting to having made the 1200%
misrepresentation herself, or whether she was admitting only to
failing to correct her employees' misrepresentations, which she had
overheard:
THE COURT: So you acknowledge that people on your
behalf were making these statements --
THE DEFENDANT: Yes, your honor.
THE COURT: -- but you did not correct them?
THE DEFENDANT: Yes -- well, I corrected them when I
was aware of it, but I did not correct them when I found
out afterwards. I couldn't do anything about it, I
thought. The attorney since advised me there was
something legally I could have done.
The government then submitted for the court’s consideration a
number of documents and faxes, which Cheal admitted were all in her
handwriting, and recorded telephone conversations, in which Cheal
admitted participating. This evidence showed conclusively that
Cheal herself had represented that the scheme would return 100% per
week for twelve weeks, that she was an experienced securities
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trader, that she had secured the services of another experienced
trader, and that the lenders’ money would be kept in a safe,
nondepletion account and would not itself be risked in the trades.
This proffer of evidence, when combined with Cheal’s own
statements to the court, satisfied Rule 11's requirement of a
factual basis for a plea of guilty, even if Cheal never admitted
explicitly to a "knowing and willing participation" in the scheme,
Martin, 228 F.3d at 15. On the basis of what it described as "her
statements to the court, on the tapes that she acknowledges are in
her voice, [and] the letters and statements that are in her hand
and/or signed by her," the district court was free to infer that
Cheal had the requisite mens rea, Marrero-Rivera, 124 F.3d at 352,
and that the plea otherwise had a rational basis in fact.7
Cheal's argument is fundamentally flawed because it assumes
that the district court could rely only on her admissions in court
to find a sufficient factual basis to accept her plea. As Gandia-
Maysonet and our other cases make clear, the court may find such a
basis either in the defendant's admissions or from the government's
7
Cheal's admissions also supported a plea of guilty on a
theory of willful blindness, permitting a defendant to be charged
with knowledge of a fact if she deliberately closed her eyes to
something that otherwise would have been obvious to her. See
United States v. Gabriele, 63 F.3d 61, 66-67 (1st Cir. 1995). As
the court put it: "Now, to the extent that the defendant doesn't
admit every detail of the government's evidence, she does admit
without question that she was reckless as to the consequences of
what she and people on her behalf did do in making representations
and in obtaining money from others."
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presentation. In this case, not only did Cheal admit to
substantial wrongdoing, including acknowledging repeatedly that she
made numerous "reckless" decisions with investors' money, but the
government also made extensive proffers of evidence -- faxes in
Cheal's handwriting and telephone calls in her voice -- that it
intended to use at trial. Given the wealth of information
available to the court from these two sources, it did not err in
finding a sufficient factual basis to accept Cheal's plea of
guilty.
2. Cheal's Understanding of the Nature of the Charges and the
Consequences of Her Plea
Rule 11 of the Federal Rules of Criminal Procedure ensures
that a defendant who pleads guilty does so with an "understanding
of the nature of the charge and the consequences of his plea."
McCarthy v. United States, 394 U.S. 459, 467 (1969). Cheal argues
repetitiously that her insistent denials at the change-of-plea
hearing show that she could not have understood the charges against
her or the consequences of her plea. We have already rejected this
argument's premise -- that Cheal did not admit to enough facts to
allow the court to accept her guilty plea. Moreover, her factual
disagreements, arguably skirting the edges of culpability, reveal
the extent to which she fully understood the charges against her
and the consequences of her plea.
In further support of her claim of confusion about the
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consequences of her plea, Cheal notes that, at one point in the
hearing, she denied that she had told investors that their money
would not be risked in the trades, and she said that a business
associate of hers "would come here and testify to this if it goes
to the jury. . . . I was using my own money to trade." Cheal
contends that this reference to a possible trial "clearly shows the
confusion she had regarding the purpose of the plea hearing. At
the same time that Ms. Cheal is asserting her innocence, she is
stating that she has witnesses who would testify at trial. Based
on these statements alone an obvious confusion exists."
We disagree. In assessing Cheal’s claim of confusion, we must
review the totality of the Rule 11 hearing.
What is critical is the substance of what was
communicated by the trial court, and what should
reasonably have been understood by the defendant, rather
than the form of the communication. At a minimum, Rule
11 requires that the trial court address the defendant
personally in open court to ascertain that his plea is
voluntary and intelligent.
United States v. Cotal-Crespo, 47 F.3d 1, 4 (1st Cir. 1995)
(citations omitted). We find that this minimum requirement was met
here when, later in the hearing, the court explicitly asked Cheal
if she understood that, with a guilty plea, she was giving up her
right to a jury trial and her right to call witnesses on her
behalf. To those questions, Cheal answered yes.
Cheal also complains that, after the government's proffer, the
court did not immediately follow up by asking her whether she
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agreed with the evidence presented. Instead, the court launched
into a series of questions asking Cheal whether she understood the
maximum penalties under the mail and wire fraud laws, the
sentencing guidelines, her right to trial, her right to counsel,
and the other usual inquiries. "Thus," Cheal says, "despite the
[court's] being cognizant of the Appellant's assertion of
innocence, [it] makes no further inquiry of the Appellant regarding
an acknowledgment of guilt nor does the [court] ascertain through
further inquiry whether the Appellant's plea was knowing, voluntary
and intelligent." Yet the colloquy cited by Cheal, required by
Rule 11 and routine in change-of-plea hearings, is designed to
confirm a knowing, voluntary, and intelligent plea. In Cheal's
case, the colloquy did just that. Cheal's responses to the court's
questions asking whether she understood the proceedings were almost
always in the affirmative. When she said that she did not
understand her right against self-incrimination, the court
explained that right to her until Cheal said she did understand it.
Cheal's insistence on that explanation confirms that she was not
merely giving mindless answers to the court's other questions.8
8
Cheal also overlooks the fact that, when the government had
finished its presentation, the court actually asked defense
counsel's permission to move on, saying, "Now may I continue with
my questioning of the defendant?" Cheal's counsel responded, "You
may, your Honor." Rule 11 does not require the court to follow a
precise sequence of questions, and, in any event, by that point in
the hearing, Cheal evidently had had plenty of time to express her
disagreement with the government's version of the facts.
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There was no error in the court's conduct of the change-of-plea
hearing and its eventual acceptance of her guilty plea.
B. Sentencing Adjustment Based on Obstruction of Justice
Cheal challenges the two-level upward adjustment to her
sentence under USSG § 3C1.1 for obstruction of justice, arguing
that the court made no "suitable findings" at the sentencing
hearing to support the adjustment.9 This argument has no merit.
As usual, we review a district court’s legal interpretation of
the guideline de novo and review the court's fact-finding for clear
error, giving due deference to the court's application of the
guidelines to the facts. United States v. Mitchell, 85 F.3d 800,
813 (1st Cir. 1996). USSG § 3C1.1 provides for a two-level upward
adjustment where the defendant "willfully obstructed or impeded, or
attempted to obstruct or impede, the administration of justice
during the course of the investigation . . . of the instant offense
of conviction . . . ." The adjustment's commentary advises that it
applies to, among other kinds of conduct, a defendant who has given
a "materially false statement to a law enforcement officer that
significantly obstructed or impeded the official investigation or
prosecution of the instant offense." USSG § 3C1.1, cmt. n.4. At
9
All references to the United States Sentencing Guidelines are
to the November 2002 version in effect at the time of Cheal's
sentencing. See United States v. Harotunian, 920 F.2d 1040, 1041-
42 (1st Cir. 1990) ("Barring any ex post facto problem, a defendant
is to be punished according to the guidelines in effect at the time
of sentencing.").
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Cheal's sentencing hearing, the district court stated that the
adjustment was "primarily based on Ms. Cheal's conduct with the
postal inspector, Keith. She did not follow his orders, the money
was not returned, and the scheme continued at least for a period of
time after that. It seems to me that does amount to obstruction of
justice."
Cheal argues that we should set this adjustment aside because
the district court failed to take direct testimony on this point
and failed to make a specific finding that her actions
"significantly" obstructed the investigation, in the commentary's
words. In support of this argument, she repeats her claim here,
made to the district court as well, that the postal inspector never
gave her a copy of the laws she was violating and never told her
that the laws prohibited her from receiving monies through private
couriers like Federal Express as well as through the U.S. mail.
In fact, the district court did address these points at the
hearing and quickly rejected them, saying simply: "I understand
that, and that objection is overruled." No more was needed,
especially when the court had already adopted the whole of the
PSR’s factual findings, which thoroughly cover the details of
Cheal's meetings with the postal inspector (and do not support her
version of the encounters advanced in her brief). The district
court committed no error by imposing the adjustment for obstruction
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of justice in the way it did.10
C. Denial of Downward Departure Based on Diminished Mental Capacity
Cheal argues that the district court erred by failing to hold
a hearing on whether she was entitled to a downward departure based
on diminished mental capacity.11 The decision to hold an
evidentiary hearing during the sentencing phase is within the
discretion of the district court. United States v. Robles-Torres,
109 F.3d 83, 85 (1st Cir. 1997). Consequently, if the district
court had denied a request from Cheal for such a hearing, we would
review for abuse of discretion.
In this case, however, Cheal did not even make such a request.
"It is . . . clear that, at a bare minimum, he who expects to
receive a discretionary dispensation must first seek it. Thus, the
failure to ask the district court to convene an evidentiary hearing
ordinarily spells defeat for a contention that one should have been
held." United States v. Tardiff, 969 F.2d 1283, 1286 (1st Cir.
1992). That is so because our review under these circumstances is
for plain error only.
10
The Supreme Court decided Blakely v. Washington, ___ U.S.
___, 124 S. Ct. 2531, 159 L. Ed. 2d 403 (2004), after oral argument
in this case. Cheal has not submitted a letter of supplemental
authority under Fed. R. App. P. 28(j) challenging her sentence
based on Blakely's possible application to the federal sentencing
guidelines. Consequently, we do not address the issue.
11
USSG § 5K2.13 provides that a "sentence below the applicable
guideline range may be warranted if the defendant committed the
offense while suffering from a significantly reduced mental
capacity."
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Although Cheal registered no such objection at the sentencing
hearing, she now contends that the court erred in its description
of the evaluations from the psychiatrists for the government and
the defense. At the sentencing hearing, the court said that the
reports "agree that she's not entitled to a finding of diminished
capacity." In fact, the defense psychiatrist's evaluation stated
that, while Cheal was competent to stand trial, "it is my opinion
that she would meet the statutory criteria of the United States
sentencing guidelines for diminished capacity." He added that
Cheal "did . . . have a significantly reduced mental capacity."12
At the same time, however, the evaluation of the defense
psychiatrist contained observations suggesting that Cheal possessed
a normal mental capacity, at least at the time of the evaluation.
It noted that she did not "appear to have any disorganization in
her thought flow, nor does she suffer from any hallucinations. Her
intellectual faculties appear to be intact with no cognitive
deficits or decrease in her intellectual ability." Ultimately, the
psychiatrist concluded that "she knew that what she was doing was
wrong, but did not fully appreciate the wrongfulness of her conduct
12
The psychiatrist added that Cheal appeared to hold some
bizarre ideas about the United States government. She believed
that there are dozens of lawyers working behind the scenes in the
White House to bring the United States back to "constitutional law"
instead of the current "judicial law." These lawyers intend to
abolish the Internal Revenue Service in favor of a consumption tax
and have already secretly converted one-third of the country's
banks to "treasury banks" backed by the gold standard.
-21-
because, in her psychotic state, [she] believed that what she was
doing was proper and moral."
Although the district court erred when it stated that both
psychiatrists had the same opinion as to Cheal's entitlement to a
departure based on mental capacity (they did not), the more
critical consideration for plain-error review is whether the
reports were so divergent that the court could not reasonably rely
on them to reject Cheal's claim of diminished mental capacity
without holding an evidentiary hearing. They were not. The court
committed no plain error when it stated, on the evidence before it,
that "I do not believe that any of the grounds advanced by the
defendant are sufficient for a departure."
D. The Restitution Order
Cheal’s last claim of error on the timing of her restitution
order presents an issue of first impression for us. As part of the
Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA),
Congress passed the Mandatory Victims Restitution Act (MVRA),
which, as its title suggests, made restitution mandatory for the
victims of certain crimes, including mail and wire fraud,
regardless of the defendant's ability to pay.13 See 18 U.S.C. §§
13
Restitution for such crimes is not mandatory only where the
number of victims is so large and the issues of fact so complex
"that the need to provide restitution to any victim is outweighed
by the burden on the sentencing process." 18 U.S.C. § 3663A(c)(3).
While the number of victims here gave the government considerable
trouble in compiling a full, accurate list of losses, Cheal has not
suggested that this provision applies here.
-22-
3663A and 3664. Section 3664, titled "Procedure for issuance and
enforcement of order of restitution," provides:
If the victim’s losses are not ascertainable by the date
that is 10 days prior to sentencing, the attorney for the
Government or the probation officer shall so inform the
court, and the court shall set a date for the final
determination of the victim’s losses, not to exceed 90
days after sentencing. If a victim subsequently
discovers further losses, the victim shall have 60 days
after discovery of those losses in which to petition the
court for an amended restitution order. Such order may
be granted only upon a showing of good cause for the
failure to include such losses in the initial claim for
restitutionary relief.
Id. § 3664(d)(5).
At Cheal’s sentencing hearing on February 20, 2003, the
government asked the district court to order restitution, estimated
at around $2.5 million, but requested an additional 90 days under
18 U.S.C. § 3664 to provide a final list of victims and amounts
owed. The court informed Cheal of its ruling on this request:
You shall pay restitution. There will be a restitution
order. I cannot now designate the amount nor the payees.
And under 18 U.S.C. 3664(d)(5), I will grant a 90-day
period for the U.S. Attorney’s office to come to a number
and share with Mr. Murray [trial counsel for the defense]
so that we can have hopefully an agreed amount.
On February 25, 2003, the court entered judgment in the case,
stating: "The determination of restitution is deferred until
5/25/03. An amended judgment in a criminal case will be entered
after such a determination." On May 21, 2003, the government filed
a memorandum with the court identifying 2,350 individual victims
and the amounts owed them, which totaled just under $2.1 million.
-23-
On the same day, it served this memorandum on Cheal’s trial
counsel, Robert Murray.
In the prior three months, however, with the approval of this
Court, Cheal had changed attorneys. On March 4, 2003, Cheal had
filed her notice of appeal. On April 4, 2003, Cheal filed a pro se
motion requesting us to appoint an attorney "to handle my appeal,
my stay, and whatever else is necessary at this time." On the same
day, we ordered that "new appellate counsel shall be appointed."
On April 10, 2003, we appointed Cheal’s current appellate counsel,
allowed trial counsel (Murray) to "withdraw as counsel for
appellant," and ordered Murray to forward the case record to
appellate counsel by April 24, 2003. It appears that the district
court was not advised of this change in Cheal's counsel.
Finally, on June 27, 2003, the district court issued an
Amended Judgment and Order requiring Cheal to make restitution in
the amounts and to the victims specified in the government's list.
This order noted: "No opposition to these numbers and amounts has
been filed."
Cheal makes three arguments based on this history. First, the
district court did not enter its order for restitution until June
27, 2003 -- 127 days after the February 20, 2003 sentencing
hearing, rather than within the required 90 days. Cheal contends
-24-
that this delay rendered the order invalid.14 Second, Cheal claims
14
18 U.S.C. § 3664(d)(5) uses two phrases whose precise
meanings have not been explored by this Court. First, § 3664(d)(5)
refers to a "final determination of the victim’s losses" but not
specifically to the initial order for restitution. Other courts to
consider this point have found that "final determination" in this
context must mean the initial order itself. "[T]he provision that
a victim may 'petition the court for an amended restitution order'
would have no meaning unless the order had been entered." United
States v. Stevens, 211 F.3d 1, 4 (2d Cir. 2000). See also United
States v. Jolivette, 257 F.3d 581, 584 (6th Cir. 2001); United
States v. Maung, 267 F.3d 1113, 1121 (11th Cir. 2001); United
States v. Grimes, 173 F.3d 634, 639-40 (7th Cir. 1999). We agree
with these courts, although we note that, elsewhere, § 3664 does
distinguish between the determination and the order. See §§ 3664
(f)(1)(A) ("In 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 3664(f)(2) ("Upon
determination of the amount of restitution owed to each victim, the
court shall . . . specify in the restitution order the manner in
which, and the schedule according to which, the restitution is to
be paid . . . .").
Second, § 3664(d)(5) keys its time periods to "sentencing" --
"10 days prior to sentencing," "90 days after sentencing" -- but
does not specify whether this term refers to the sentencing hearing
or to the district court's actual entry of judgment. We conclude
that "sentencing" in this provision refers to the sentencing
hearing for four reasons. First, we read this provision in
conjunction with § 3664(d)(1), which requires the government to
provide the probation officer with a listing of the amounts subject
to restitution "not later than 60 days prior to the date initially
set for sentencing." It makes more sense to speak of the district
court setting a date for the sentencing hearing, rather than for
entry of judgment, which is not usually done on some preset date.
Second, because of the usual uncertainty about precisely when a
district court plans to enter judgment, it would be difficult to
calculate the date that would fall "10 days prior to sentencing" as
provided by § 3664(d)(5) (which provides that "[i]f the victim's
losses are not ascertainable by the date that is 10 days prior to
sentencing, the attorney for the Government or the probation
officer shall so inform the court.") Third, our interpretation is
more consistent with the language of Fed. R. Crim. P. 32(i), titled
"Sentencing," which begins: "At sentencing," and goes on to refer
to the sentencing hearing. Fourth, keying this 10-day deadline to
the sentencing hearing gives better expression to a Congressional
intent to allow the defendant to develop objections to the
-25-
that she was not given notice of, and hence had no opportunity to
object to, the government’s victims’ loss list because the list was
sent to her old trial counsel instead of her new appellate counsel.
Third, the court should have considered her ability to pay in
calculating the amount of restitution owed.
We review restitution orders for abuse of discretion and their
subsidiary findings of fact for clear error. United States v.
Cutter, 313 F.3d 1, 6 (1st Cir. 2002). If the appellant’s
challenge is based on a legal conclusion, we review that conclusion
de novo. Id. at 6. Where the defendant has failed to object
below, however, we review only for plain error. United States v.
Theodore, 354 F.3d 1, 8 (1st Cir. 2003). Under this standard,
Cheal must show "(1) that an error occurred (2) which was clear or
obvious and which not only (3) affected [her] substantial rights,
but also (4) seriously impaired the fairness, integrity, or public
reputation of the judicial proceedings." United States v. Duarte,
246 F.3d 56, 60 (1st Cir. 2001). After considering Cheal's
arguments, we affirm the restitution order in its entirety.
1. The Timing of the Restitution Order
Although the government concedes that the order was not
entered within 90 days of sentencing, it urges us to overlook this
irregularity to further the statute's purpose of increasing the
government's data in time to present them at the sentencing
hearing.
-26-
likelihood that victims of crime will receive restitution from the
defendant. The government also argues that the court’s statements
about restitution at the change-of-plea and sentencing hearings and
in the original judgment gave notice to Cheal that she would face
a restitution order after a delay of 90 days. Finally, the
government notes that Cheal has never objected to restitution,
either at the sentencing hearing or after the original judgment,
and even now has not identified any actual disagreement with the
order.
Cheal had the opportunity to object to the district court's
scheduling of a deferred restitution order but did not. When the
court entered judgment on February 25, 2003, it deferred
determination of restitution until May 25, 2003, and indicated that
it would enter an amended judgment at some unspecified time
thereafter. Even though it was now a virtual certainty that the
restitution order would be entered more than 90 days after her
sentencing, Cheal did not object. By failing to object at the
time, Cheal subjected her appellate claim of error to plain-error
review.
Cheal cites no prejudice from the delay in entering the
restitution order. Indeed, as the government points out, she does
not claim even now that she disagrees with the government’s
accounting of her victims' losses and the court’s final
determination. In an effort to avoid the prejudice showing
-27-
required by plain error, Cheal argues that § 3664 is a
jurisdictional provision. That is, by not entering a restitution
order within 90 days after her sentencing hearing, Cheal argues,
the district court no longer had jurisdiction to enter any
restitution order. This jurisdictional argument is undermined by
§ 3664's provision for continued revision of the restitution order
in light of later discoveries of losses. Indeed, the title of the
provision (“Procedure for issuance and enforcement of order of
restitution”) advertises its procedural nature, including the 90-
day time frame.15
The legislative history of the MVRA reveals Congress’s
15
See United States v. Vandeburg, 201 F.3d 805, 814 (6th Cir.
2000):
Section 3664(d)(5) is not a jurisdictional statute. Were
we to read it as terminating a court's jurisdiction 90
days after a sentencing hearing, we would be effectively
nullifying its provision that a victim may petition the
court for an amended restitution order 60 days after the
discovery of any additional losses. The MVRA permits
amendments to restitution orders to reflect changed
circumstances, and neither confers nor terminates a
court's jurisdiction.
201 F.3d at 814 (citation omitted). A year later, however, United
States v. Jolivette, 257 F.3d 581 (6th Cir. 2001), came to a
different and seemingly irreconcilable conclusion: "We believe that
[the MVRA] makes clear the congressional intent to prohibit courts
from making restitution determinations after the statutory period
has run. . . . [W]e hold that when the 90-day clock runs out, the
judgment of conviction and sentence, including the restitution
provision, becomes final by operation of the statute." Jolivette,
257 F.3d at 584. Strangely, Jolivette did not cite Vandeburg or
refer to it in any way. As noted, we reject Jolivette’s
jurisdictional view of § 3664.
-28-
determination to provide full restitution to victims of fraud if at
all possible. The Senate Judiciary Committee, in its report on the
bill that would become the MVRA, stated: "It is essential that the
criminal justice system recognize the impact that crime has on the
victim, and, to the extent possible, ensure that [the] offender be
held accountable to repay these costs." S. Rep. No. 104-179, at 18
(1995), reprinted in 1996 U.S.C.C.A.N. 924, 930.16 Although the
Committee acknowledged the importance of "the need for finality and
certainty in the sentencing process," it added that "justice cannot
be considered served until full restitution is made." Id. at 20.17
The Committee did not relate the 90-day requirement to the
interests of defendants, stating that the "sole due process
interest of the defendant being protected during the sentencing
phase is the right not to be sentenced on the basis of invalid
premises or inaccurate information." Id. See United States v.
Zakhary, 357 F.3d 186, 191 (2d Cir. 2004) ("As this court has now
twice explained, the purpose behind the statutory ninety-day limit
on the determination of victims’ losses is not to protect
16
The conference managers of the final version of AEDPA
directed that S. Rep. 104-179 "should serve as the legislative
history for [the MVRA]." H.R. Conf. Rep. 104-518, at 112 (1996),
reprinted in 1996 U.S.C.C.A.N. 944, 945. At the time of S. Rep.
104-179, the text that would become 18 U.S.C. § 3664(d)(5) was in
substantially final form and included the 90-day period.
17
The committee also noted its desire "that defendants not be
able to fraudulently transfer assets that might be available for
restitution," id., although it did not tie this concern
specifically to the 90-day rule.
-29-
defendants from drawn-out sentencing proceedings or to establish
finality; rather, it is to protect crime victims from the willful
dissipation of defendants’ assets."). The Seventh Circuit has also
emphasized that the MVRA's "intended beneficiaries are the victims,
not the victimizers." United States v. Grimes, 173 F.3d 634, 639
(7th Cir. 1999).
Cheal's timing argument would abrogate an obligation to pay
more than $2 million in restitution to thousands of defrauded
investors. On the facts here, such an outcome would be
antithetical to the purpose of the MVRA. Moreover, a finding of
plain error in Cheal’s favor would turn the plain-error doctrine on
its head by "seriously impair[ing] the fairness, integrity, or
public reputation of the judicial proceedings." Duarte, 246 F.3d
at 60. See Johnson v. United States, 520 U.S. 461, 470 (1997)
("Indeed, it would be the reversal of a conviction such as this
which would have that effect.") We will not countenance such a
result.18
18
It is also important to understand the difficult
circumstances confronting the district court and the government in
a case such as this. In truth, § 3664's one-size-fits-all 90-day
deadline seems poorly suited for complex cases involving thousands
of victims and millions of dollars in losses. Other courts of
appeals have offered advice on how to comply with § 3664’s time
limits and still render a complete and accurate accounting of the
defendant’s misconduct. The Eleventh Circuit, for example, has
suggested that if district courts foresee a problem with getting
the restitution order entered within 90 days of sentencing, they
"can postpone sentencing and thereby put off the start of the 90-
day period." United States v. Maung, 267 F.3d 1113, 1121 (11th
Cir. 2001). We note this suggestion without expressing an opinion
-30-
2. Notice to Cheal’s Trial Counsel
As noted, the court entered judgment in this case on February
25, 2003. Cheal filed her notice of appeal from that judgment on
March 4, 2003. On April 4, she filed a pro se motion in this Court
for new counsel. We issued an order on April 10, 2003, allowing
her trial counsel to withdraw and appointing new appellate counsel,
even though Cheal's restitution order was still pending in the
district court and she continued to need the services of her trial
counsel. Although Cheal's motion asked for counsel to be appointed
for her appeal and "for whatever else is necessary at this time,"
our order requiring trial counsel to forward the case record to new
appellate counsel by April 24 implies that we thought the
proceedings in the district court were finished.
Meanwhile, both the district court and the government seemed
unaware of the change in counsel that we had approved. When the
government finished preparing its memorandum identifying Cheal's
victims and their losses, it sent the memo to Cheal's trial
counsel, whom we had allowed to withdraw a month and a half before.
When the district court entered an amended judgment a month after
receiving the government's memo, it also listed Cheal's trial
counsel on its order and wrote that "[n]o opposition to these
numbers and amount has been filed."
Cheal argues that she filed no opposition because the failure
on it.
-31-
of coordination between the district court and our court on the
important matter of which attorney represented her meant that her
attorney never received notice of the pending restitution order.
Regrettably, it appears that there was uncertainty among everyone
involved -- former trial counsel, new appellate counsel, the
government, and the district and appellate courts -- over the
question of Cheal's legal representation in the still incomplete
restitution proceedings. This uncertainty lends force to Cheal's
claim that she never received proper notice of the pending
restitution order. The absence of such notice is a serious matter.
However, even after the five-and-a-half months between the court's
entry of its restitution order and the filing of Cheal's brief on
appeal (from June 27 to December 12, 2003), Cheal's brief does not
contain even a bare-bones assertion that she disputes anything in
the restitution order. She merely asserts that she is entitled to
an evidentiary hearing because she did not get one before.
Cheal's due process claim cannot succeed without at least some
showing of the challenge she would mount to the restitution order.
See United States v. Luciano-Mosquera, 63 F.3d 1142, 1158 (1st Cir.
1995) ("[t]he defendant must show prejudice" to prove that his
right to due process was violated when a court reporter's failure
to provide transcripts delayed processing of his appeal); see also
United States v. Lovasco, 431 U.S. 783, 790 (1977) ("[P]roof of
prejudice is generally a necessary but not sufficient element of a
-32-
due process claim . . . .") Cheal has not made even a minimal
showing of the challenge to restitution that she would make at an
evidentiary hearing. Under these circumstances, despite the
regrettable problems with notice of the proposed restitution order,
we must reject her due process claim.
However, we must add an explanatory note about future cases,
like this one, involving deferred restitution orders at the time
that a defendant files a notice of appeal from the entry of
judgment. There might be a question whether the judgment of
conviction entered on February 25, 2003, which imposed Cheal's
sentence but only ordered restitution in general terms, was a final
judgment that triggered the running of the appeal period.
Arguably, the judgment was not truly final until June 27, 2003,
when the district court issued an Amended Judgment and Order
requiring Cheal to make restitution in the amounts and to the
victims specified in the government's list. Despite these
plausible arguments, we must treat the February judgment as final
and appealable because of a statutory provision in the MVRA.
18 U.S.C. § 3664(o) provides: "A sentence that imposes an
order of restitution is a final judgment notwithstanding the fact
that such a sentence can subsequently be corrected . . .; appealed
and modified . . .; amended under subsection (d)(5); or adjusted .
. . ." As we have already mentioned, subsection (d)(5) addresses
itself to two situations that may require changes to a restitution
-33-
order. First, where the victim's losses cannot be determined
before sentencing, it provides an extra 90 days for a "final
determination." Second, where the "final determination" has failed
to account for some victims who did not discover their losses until
later, subsection (d)(5) provides such victims "60 days after
discovery of those losses in which to petition the court for an
amended restitution order." 18 U.S.C. § 3664(d)(5). Section
3664(o)'s instruction, then, to disregard for purposes of finality
restitution orders "amended under subsection (d)(5)" could be read
narrowly as encompassing only the second situation, which
specifically provides for "an amended restitution order."
However, we decline to read § 3664(o) so narrowly. The
provision states that courts should treat a "sentence that imposes
an order of restitution" as final, notwithstanding the possibility
of subsequent modification. In Cheal's case, the February judgment
imposed a restitution obligation. The court stated in the
judgment: "The defendant shall pay the balance of the restitution
according to a court-ordered repayment schedule." Although the
specific amounts of restitution and the list of victims were yet to
be determined, an "order of restitution" (the phrase used in §
3664(o)) had been entered. Sensibly and properly, the court
advised Cheal of her right to appeal from the sentence that it had
just imposed: "You are advised, Ms. Cheal, that you have the right
[to] appeal from the sentence by filing a notice of appeal. I ask
-34-
Mr. Murray to talk with you about this and file such a notice
within ten days if you decide to appeal."
A contrary rule -- one that linked the finality of the
judgment of conviction to a later restitution order that included
specific amounts and victims -- would have troubling consequences
for defendants, who have an obvious and legitimate interest in
pursuing a timely appeal. This interest would be compromised if
the judgment of conviction were not final until the final
restitution determination was reflected in an order of the court.
Indeed, a defendant could already be incarcerated without the
ability to pursue an appeal until the specifics of restitution are
later determined. For these reasons of statutory language and
policy, we conclude that the February judgment was one that
"impose[d] an order of restitution" on Cheal within the meaning of
§ 3664(o) and was final and appealable.19
However, this conclusion raises a question as to whether
Cheal's notice of appeal from the February judgment, filed pro se
on March 4, 2003, served to bring before us the Amended Judgment
and Order of June 27, 2003, which specified the restitution amounts
owed to identified victims. Fed. R. App. P. 3(c)(1)(B) provides
that the notice of appeal must "designate the judgment, order, or
19
United States v. Kapelushnik, 306 F.3d 1090 (11th Cir.
2002), by contrast, takes the opposite view that a notice of appeal
is premature if filed before final determination of restitution.
Id. at 1093-94. We also disagree with that court's interpretation
of § 3664's 90-day period as jurisdictional. See id.
-35-
part thereof being appealed." The defendant must file the notice
of appeal within ten days after the entry of judgment or the order
being appealed. See Fed. R. App. P. 4(b). Typically, these rules
prevent a court of appeals from considering any orders or judgments
besides those designated in the appellant's notice of appeal. In
the case of an amended judgment or a later order that is
substantively different, an appellant may have to amend his notice
of appeal or file a new one. "The settled rule is that the non-
substantive revision of a previously entered judgment does not
restart or otherwise affect the period within which appellate
review must be sought. It is only when the judgment-issuing court
alters matters of substance or resolves some genuine ambiguity that
the entry of an amended judgment winds the appeals clock anew."
Air Line Pilots Ass'n v. Precision Valley Aviation, Inc., 26 F.3d
220, 223 n.2 (1st Cir. 1994) (internal citations omitted).20
Cheal's March 4 notice of appeal stated in full: "Notice is hereby
20
The same rule applies in criminal cases. See United States
v. Rapoport, 159 F.3d 1, 3 n.4 (1st Cir. 1998). The guide in such
situations remains Federal Trade Commission v. Minneapolis-
Honeywell Regulator Co., 344 U.S. 206 (1952), which cautioned that
the mere fact that a judgment previously entered has been
reentered or revised in an immaterial way does not toll
the time within which review must be sought. Only when
the lower court changes matters of substance, or resolves
a genuine ambiguity, in a judgment previously rendered
should the period within which an appeal must be taken or
a petition for certiorari filed begin to run anew. The
test is a practical one.
Id. at 211-212.
-36-
given that Nancy Cheal in the above named case hereby appeals to
the United States Court of Appeals for the 6th [sic] Circuit from
a judgment and sentence entered in this action on the 20th [sic]
day of February, 2003."21 Arguably, she should have filed a second
notice of appeal from the Amended Judgment and Order of restitution
of June 27, 2003. Indeed, looking to the future, we think that, as
a general proposition, a deferred restitution order entered
pursuant to § 3664(d)(5), subsequent to a final judgment of
conviction which has already been appealed, should be the subject
of a second notice of appeal.22
In this case, however, we consider the adequacy of Cheal's
March 4 notice of appeal in light of general principles that
"encourage us to construe notices of appeal liberally and examine
them in the context of the record as a whole." Chamorro v. Puerto
Rican Cars, Inc., 304 F.3d 1, 3 (1st Cir. 2002); see also Blockel
v. J.C. Penney Co., Inc., 337 F.3d 17, 23-4 (1st Cir. 2003). The
core purpose of a notice of appeal is to "facilitate a proper
decision on the merits." Foman v. Davis, 371 U.S. 178, 182
21
Despite the reference to the Sixth Circuit, Cheal in fact
sent her notice to the clerk of this Court, as well as the district
court and counsel.
22
See, e.g., United States v. Ferrario-Pozzi, 368 F.3d 5, 7-8
(1st Cir. 2004) (defendant filed first notice of appeal from entry
of judgment and second from preliminary order of forfeiture); In re
Keeper of Records (Grand Jury Subpoena Addressed to XYZ Corp.), 348
F.3d 16, 19 (1st Cir. 2003) (corporation filed first notice of
appeal from order to produce documents and second from citation of
contempt for failure to produce them).
-37-
(1962).23 Cheal's notice of appeal was sufficiently clear in its
intent to challenge all elements of her conviction and sentence,
which, as we have noted, imposed a general restitution obligation.
There is also no question here of surprise or prejudice to the
government. See United States v. Winn, 948 F.2d 145, 154-55 (5th
Cir. 1991) (treating a pre-judgment notice of appeal as effective,
where the defendant's intent to appeal ruling was clear and the
government was not prejudiced or misled). Both sides fully briefed
the restitution issues on appeal. Therefore, on the facts here, we
conclude that Cheal's notice of appeal filed on March 4, 2003,
served to bring the restitution order of June 27, 2003, before us
for appellate consideration.
3. Considering Cheal's Ability To Pay When Ordering Restitution
Cheal argues, citing United States v. Haddock, 50 F.3d 835
(10th Cir. 1995), that the district court erred by not reviewing
her financial resources before deciding whether to order
restitution and in what amount. Haddock, decided the year before
Congress passed the MVRA, interpreted the MVRA's predecessor
statute, the Victim and Witness Protection Act of 1982, Pub. L. 97-
291, 96 Stat. 1248. The MVRA gives the court no discretion in
ordering restitution in cases of fraud, see 18 U.S.C. §
23
For example, we overlook the fact that her notice of appeal
expressed a determination to appeal to the Sixth Circuit, despite
Rule 3's requirement that the notice "name the court to which the
appeal is taken." Fed. R. App. P. 3(c)(1)(C).
-38-
3663A(c)(1), or in calculating the amount of restitution owed:
In 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.
Id. § 3664(f)(1)(A). See United States v. Chay, 281 F.3d 682, 686
(7th Cir. 2002) (noting that the MVRA "prohibits the court from
examining the defendant's ability to pay restitution"); United
States v. McGlothlin, 249 F.3d 783, 784 (8th Cir. 2001) (same);
United States v. Alalade, 204 F.3d 536 (4th Cir. 2000) (same);
United States v. Myers, 198 F.3d 160, 168-69 (5th Cir. 1999)
(same); United States v. Coates, 178 F.3d 681, 683 (3d Cir. 1999)
(same).
The court may take a defendant's financial resources into
account only insofar as they affect "the manner in which, and the
schedule according to which, the restitution is to be paid . . . ."
Id. § 3664(f)(2). Cheal did not object below to the repayment
plan, and she does not do so now. In any event, § 3664(k) requires
her to notify the court of "any material change in the defendant's
economic circumstances that might affect the defendant's ability to
pay restitution." This provision accounts both for windfalls and
for tighter times. Cheal remains subject to its strictures.
Affirmed.
-39-
United States v. Cheal
Court: Court of Appeals for the First Circuit
Date filed: 2004-11-15
Citations: 389 F.3d 35, 389 F.3d 35, 389 F.3d 35
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