United States v. Wade

580 F.Supp.3d 661

UNITED STATES of America, Plaintiff,

v.Sherman R. WADE, Defendant.

8:04CR462

United States District Court, D. Nebraska.

Signed January 19, 2022

Michael P. Norris, Assistant United States Attorney, Omaha, NE, for Plaintiff.

David R. Stickman, Shannon P. O'Connor, Public Defenders, Federal Public Defender's Office, Omaha, NE, for Defendant.

MEMORANDUM AND ORDER

Joseph F. Bataillon, Senior United States District Judge This matter is before the Court on the government's motion for Authorization to Make Payment from Inmate Trust Account. Filing No. 75. A hearing on the motion was held on August 27, 2021, with counsel for the government present personally, and the defendant present by telephone.

BACKGROUND

Defendant Sherman Wade pled guilty to Bank Robbery and Brandishing a Firearm While Robbing a Bank in 2005. Filing No. 21. As part of Wade's sentence, the Court instituted criminal monetary penalties. Filing No. 71 at 6. The criminal monetary penalties included a Total Assessment and Total Restitution. Id.

In August 2021, the Government moved for authorization to make payment from inmate trust account. Filing No. 75 at 1. Upon notification from the Bureau of Prisons, the Government discovered Wade's inmate trust account contained $1,961.48. Id. at 2. The Government seeks authorization to take $1,861.48 from Defendant's account and apply towards his restitution balance, which, as of August 6, 2021, was $75,257.30. Id. at 1.

Defendant opposes the motion. Filing No. 77 at 1. Wade contends that the amount due under the Restitution Order are only due upon his release from prison and that he has been on "deferred and expired" status since 2013.¹ Id. As such, he argues, the Government should not be able take the money from his inmate trust account. Id. Per the instruction of this Court, Filing No. 81, the defendant prepared a budget that outlined how he intends to use the funds in his inmate trust account for prison expenses and pending release in 2023. Filing No. 82 at 1–5. Defendant's listed needs upon release are all items of necessity, such as phone, food, transportation, and miscellaneous clothing items. Id. at 3.

At the hearing on the motion, the Government stated that the funds sought included a second stimulus payment of $1400.00. The government had not sought garnishment of the first stimulus payment of $1200.00.² Wade stated that the last job he had in prison was when he was at FCI Sheridan, which was before he spent twenty months at FCI Herlong. He was at Herlong immediately before his current placement. At the time of the hearing, he had been at FCI Phoenix for six weeks.

DISCUSSION

Although federal courts possess no inherent ability to order restitution, Congress enacted the Mandatory Victims Restitution Act (MVRA) to provide courts with such power. United States v. Balentine , 569 F.3d 801, 802–03 (8th Cir. 2009). The MVRA permits the court to determine who is a victim of the crime, the victim's actual losses, and how the defendant must pay the restitution to make the victim whole again. United States v. Frazier , 651 F.3d 899, 905 (8th Cir. 2011). After a court orders restitution from a criminal defendant, the government can seek civil remedies to satisfy unpaid restitution through the MVRA. 18 U.S.C. § 3612. The government's enforcement reaches "all property or rights to property of the person fined" except for a narrow list of property not relevant to this inquiry.³ 18 U.S.C. § 3613(a).

a. 18 U.S.C. § 3613(a), Enforcement

The government can treat a defendant's restitution as if it were a lien or civil judgment, and use methods laid out in statute, as well as "all other available and reasonable means," to collect. 18 U.S.C. § 3664(m)(1)(A). During a period of incarceration, if a person obligated to pay restitution "receives substantial resources from any source," then they "shall be required to apply the value" of those resources to their remaining restitution balance. 18 U.S.C. § 3664(n).

Defendant maintains that since his restitution is on deferred status,⁴ the Government should not be able to collect from his inmate trust account. Filing No. 77 at 1. The Eighth Circuit has not yet determined whether the Government has the authority under § 3613(a) to collect more than the installment payments set out in the Restitution Order. See United States v. Raifsnider , 846 F. App'x 423, 424 (8th Cir. 2021) (mem.) (reversing district court order because the government "may have lacked" authority under § 3613(a) ).

However, both the Fifth and Tenth Circuits have persuasive caselaw that draw a distinction between the government's ability to collect payment for restitution that is immediately due and its ability to collect in excess of the payment plan. Both circuits held that the government can take money from an inmate's trust account when their restitution order includes directing language that the payment is due immediately under § 3613(a). United States v. Hughes , 914 F.3d 947, 949 (5th Cir. 2019), as revised (Feb. 1, 2019), as revised (Feb. 14, 2019) ("Unless there is language directing that funds are also immediately due, the government cannot attempt to enforce the judgment beyond its plain terms absent a modification of the restitution order or default"). If the court indicated payment was due immediately through directing language, then even with a set installment plan, the government can collect from the inmate's trust account. United States v. Elwood , 757 F. App'x 731, 735 (10th Cir. 2018) (emphasis added).

For the Total Restitution, the Court assessed Wade's ability to pay and provided the following instructions for repayment:

Unless the court has expressly ordered otherwise in the special instruction above, if this judgment imposes a period of imprisonment, payment of criminal monetary penalties shall be due during the period of imprisonment. All criminal monetary penalties, except those payments made through the Federal Bureau of Prisons’ Inmate Financial Responsibility Program, are made to the clerk of the court, unless otherwise directed by the court, the probation officer or the United States attorney.

Following release from incarceration, the defendant shall make payments to satisfy the criminal monetary penalty in monthly installments of $50 or 3% of the defendant's gross income, whichever is greater. The first payment shall commence 60 days following the defendant's discharge from incarceration, and continue until the criminal monetary penalty is paid in full. The defendant shall be responsible for providing proof of payment to the probation officer as directed.

Filing No. 71 at 7 (emphasis added).

Therefore, even though a Schedule of Payments had been established, the defendant is still responsible to begin making payment of criminal monetary penalties while imprisoned.

b. 18 U.S.C. § 3664(n), Substantial Resources

While federal courts possess no inherent ability to order restitution, Congress enacted the Mandatory Victims Restitution Act (MVRA) to provide courts with such power. United States v. Balentine , 569 F.3d 801, 802–03 (8th Cir. 2009). The MVRA permits the court to determine who is a victim of the crime, the victim's actual losses, and how the defendant must pay the restitution to make the victim whole again. United States v. Frazier , 651 F.3d 899, 905 (8th Cir. 2011). After a court orders restitution from a criminal defendant, the government can seek civil remedies to satisfy unpaid restitution through the MVRA. 18 U.S.C. § 3612. The government's enforcement reaches "all property or rights to property of the person fined" except for a narrow list of property not relevant to this inquiry.⁵ 18 U.S.C. § 3613(a).

After the court makes all the necessary determinations under the MVRA showing what the defendant owes, the statute then provides the government avenues to collect money for the victims. 18 U.S.C.A. §§ 3613, 3664. The government can treat a defendant's restitution as if it were a lien or civil judgment, and use methods laid out in statute, as well as "all other available and reasonable means," to collect. 18 U.S.C. § 3664(m)(1)(A). During a period of incarceration, if a person obligated to pay restitution "receives substantial resources from any source," then they "shall be required to apply the value" of those resources to their remaining restitution balance. 18 U.S.C. § 3664(n). An influx of stimulus funds represents receipt of substantial resources incarcerated that, under 18 U.S.C. § 3664(n) must be applied to outstanding restitution obligations. United States v. Davis , No. 3:14-CR-47 JD, 2021 WL 2678765, at *1 (N.D. Ind. June 30, 2021). Section 3664(n) does not apply to prison wages. United States v. Kidd , 23 F.4th 781, 786–87 (8th Cir. 2022) ; see also Hughes , 914 F.3d at 951 ; United States v. Poff , 781 F. App'x 593, 594–95 (9th Cir. 2019).⁶

The Government moves to collect $1,861.48 from Defendant's inmate trust account. Filing No. 75 at 1. The Government argues Wade received "substantial resources" in his inmate trust account, therefore, under § 3664, the Government should be able to apply these "substantial resources" to his outstanding restitution balance of $75,257.30. Filing No. 82 at 1. Wade counters by arguing that he should not have to pay anything out of his inmate trust account, because he is on "deferred and expired" status. Filing No. 77 at 1.

However, an inmate's trust account under § 3613 is not exempt from collection, therefore allowing the government to collect owed restitution. United States v. Jones , No. 8:02CR156, 2019 WL 4141060, at *2 (D. Neb. Aug. 29, 2019) (citing United States v. Rand , 924 F.3d 140, 144–45 (5th Cir. 2019) ). Since Wade is currently incarcerated, 18 U.S.C. § 3664(n) applies. Because he "is obligated to provide restitution" and has "received substantial resources," he is "required to apply the value" to the owed restitution. Id.

c. The Court's Restitution Power

"The court has substantial discretion in determining how...