United States v. Weinlein

109 F.4th 91

UNITED STATES of America, Appellee, v. Laurie WEINLEIN, Defendant-Appellant.

No. 22-533

August Term 2023

United States Court of Appeals, Second Circuit

Submitted: November 30, 2023

Decided: July 25, 2024

On Appeal from the United States District Court for the Northern District of New York

Adam J. Katz, John D. Hoggan, and Steven D. Clymer, Assistant United States Attorneys, for Carla B. Freedman, United States Attorney for the Northern District of New York, Syracuse, New York, for Appellee.

Samuel C. Breslin, Breslin Law Group, Albany, New York, for Defendant-Appellant.

Before: Lynch, Park, and Menashi, Circuit Judges.

Menashi, Circuit Judge:

Defendant-Appellant Laurie Weinlein was convicted of bank fraud and embezzlement from an employee welfare benefit plan in 2000,¹ She was sentenced to sixty-three months in prison and a five-year term of supervised release and was assessed over $2 million in restitution payments. Weinlein committed the underlying criminal acts in 1994 and 1995. In 1996, Congress enacted the Mandatory Victims Restitution Act ("MVRA"), which extended the enforcement period for criminal restitution obligations provided by 18 U.S.C. § 3613(b). Under the predecessor statute of the MVRA, the Victim and Witness Protection Act ("VWPA"), Weinlein's restitution obligations would have terminated in 2020. Weinlein argues that applying the MVRA's enforcement period retroactively to allow the government to continue to collect restitution payments from her violates the Ex Post Facto Clause of the Constitution. We disagree and affirm the judgment of the district court.

BACKGROUND

In 1989, Weinlein founded American Payroll Network, Inc. ("APN"), an employee leasing business based in Albany, New York. APN managed payroll, taxes, insurance, and other back-office functions for small companies. To do so, APN would take its customers' employees onto its own payroll, manage their taxes, insurance, and other back-office functions, and then lease the employees back to the customers, receiving a fee in return for these services.

APN maintained several bank accounts at two different banks—Marine Midland Bank and Key Bank. The company used these accounts to handle its customers' payroll and to pay its own operating expenses. Between September 1994 and February 1995, Weinlein engaged in a "kiting" scheme to defraud the two banks. The first step in the scheme involved writing a check on the Marine Midland operating account—which was not covered by the funds in the account—and depositing it in the Key Bank operating account. Key Bank, unaware that the check was not supported by sufficient funds in the Marine Midland account, would immediately credit APN's account at Key Bank. While the check was being processed, Weinlein would wire money from the Key Bank operating account to the Marine Midland operating account to cover the overdraft, and Marine Midland would immediately credit APN's account. Finally, Weinlein would write another check on the Marine Midland operating account and deposit it in the Key Bank operating account to cover the wire transfer. By repeating this process, Weinlein artificially inflated the balances in each account—because the checks and wire transfers increased the banks' balances with the Federal Reserve even before the funds were transferred—and enabled APN to write checks for more money than it had.² The scheme resulted in a loss of approximately $1,000,000 to Marine Midland Bank.

In addition, beginning around July 1993, APN adopted a self-funded, self-insured health insurance plan for its customers and employees. Between 1993 and 1995, APN contracted with third-party administrators to process and pay claims. By the fall of 1994, APN was behind on its reimbursement payments to the third-party administrators, and there were substantial unpaid claims. It turned out that, between May 1994 and February 1995, Weinlein had embezzled approximately $300,000 from the plan and converted the money to her personal use.

As noted in the judgment of conviction in the district court, the conduct underlying Weinlein's convictions concluded on February 10, 1995. At that time, the VWPA, which Congress enacted in 1982, governed the issuance and enforcement of restitution orders. Under the VWPA, a defendant's liability for restitution terminated twenty years after the judgment of conviction was entered. See 18 U.S.C. § 3613(b)(1) (1995). In 1996, Congress enacted the MVRA as part of the Antiterrorism and Effective Death Penalty Act of 1996. See Pub. L. No. 104-132, tit. II, §§ 201-11, 110 Stat. 1214, 1227-41 (1996). Among other changes to the statutes governing criminal restitution, the MVRA amended § 3613(b) to provide that "[t]he liability to pay restitution shall terminate on the date that is the later of 20 years from the entry of judgment or 20 years after the release from imprisonment of the person ordered to pay restitution." 18 U.S.C. § 3613(b) (emphasis added). Congress specified that the amendment "shall, to the extent constitutionally permissible, be effective for sentencing proceedings in cases in which the defendant is convicted on or after the date of enactment of [the] Act." Pub. L. No. 104-132, tit. II, § 211, 110 Stat. 1214, 1241 (1996).

Weinlein was indicted in the Northern District of New York on May 22, 1998. The indictment charged her with two felonies: bank fraud in violation of 18 U.S.C. § 1344 and embezzlement from an employee welfare benefit plan in violation of 18 U.S.C. § 664. Weinlein was convicted on both counts on February 28, 2000, and sentenced to sixty-three months in prison and five years of supervised release. In addition, she was ordered to pay $2,171,381.89 in restitution. The district court determined that Weinlein was unable to pay interest, so it waived interest on the restitution payments. On April 11, 2000, the district court increased her restitution obligation by $14,367.98 to account for losses incurred by an additional victim, bringing her total restitution liability to $2,185,749.87.

According to the certified payment history report of December 6, 2022, Weinlein made semi-regular payments amounting to between $300 and $2,700 per year toward her restitution obligation from July 30, 2004, until June 29, 2009. By May 2, 2014, Weinlein had made a total of $9,941.24 in payments, leaving a balance of $2,175,808.63. On April 13, 2021, the Office of the United States Attorney for the Northern District of New York wrote to Weinlein, noting that no payments had been received since 2014 and asking her to complete a financial statement that would allow the office to ascertain her ability to pay.

Weinlein produced a financial statement on June 4, 2021, but the government suspected it was incomplete and requested supplemental information.³ On July 19, 2021, after Weinlein failed to return a complete financial statement, the government issued a subpoena duces tecum for Weinlein's financial records and a testimonial subpoena. Weinlein moved in the Northern District of New York to quash the subpoenas and to terminate her restitution obligation. Because Weinlein resided in Texas at the time, she invoked Federal Rule of Civil Procedure 45(d)(3)(A)(ii), which requires a district court to quash or to modify a subpoena issued with respect to a person who resides more than 100 miles from the seat of the tribunal. In addition, Weinlein argued that the subpoenas should be quashed—and her restitution obligation terminated—on the ground that the enforcement period for restitution obligations under the VWPA had expired. She maintained that retroactively applying the MVRA's amendments to 18 U.S.C. § 3613(b), which extended the enforcement period until November 10, 2024—that is, twenty years from the date Weinlein was released from prison—would violate the Ex Post Facto Clause of the Constitution.

The district court denied the motion to terminate the restitution obligation, holding that retroactive application of the MVRA's enforcement period did not violate the Ex Post Facto Clause. The district court similarly declined to quash the subpoenas on that ground, but it granted the motion to quash the subpoenas under Rule 45(d)(3)(A)(ii). This appeal followed.

DISCUSSION

Weinlein argues on appeal that retroactively applying the MVRA's longer enforcement period to allow the government to collect further restitution payments violates the Ex Post Facto Clause. The government suggests, however, that Weinlein lacks standing to pursue this appeal because she prevailed when the district court granted her motion to quash the subpoenas under Rule 45(d)(3)(A)(ii).

Before addressing those arguments, we consider whether we lack jurisdiction to entertain Weinlein's appeal because this action amounts to an improper collateral attack on her criminal sentence. We conclude that it does not. Next, we conclude that Weinlein has standing to appeal because the denial of her motion to terminate her restitution obligation created an independent injury in fact. Finally, on the merits, we hold that retroactively applying the MVRA's longer enforcement period to a defendant who committed crimes when the VWPA was in effect does not violate the Ex Post Facto Clause.

I

Before reaching the merits, we address two threshold issues that could implicate our jurisdiction to consider this appeal.

A

The first threshold issue is whether Weinlein's action constitutes an improper collateral attack on her sentence. The government argued before the district court that Weinlein's action amounts to such a collateral attack and that it is barred because she failed to raise her constitutional claims on direct appeal from her conviction. See App'x 45 ("With regard to [Weinlein's] attempt to collaterally attack her judgment of conviction, it is clear as a matter of law that she cannot ask the Court to do so through the instant motion because she failed to raise any such arguments on direct appeal."). The Supreme Court has said that "[o]ut of...