CLARENCE RUFFEN, PETITIONER V. UNITED STATES OF AMERICA No. 86-5077 In the Supreme Court of the United States October Term, 1986 On Petition For a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit Brief for the United States in Opposition OPINION BELOW The opinion of the court of appeals (Pet. App. 1a-6a) is reported at 780 F.2d 1493. JURISDICTION The judgment of the court of appeals was entered on January 22, 1986 (Pet. App. 1a). The petition for rehearing was denied on May 14, 1986 (Pet. App. 7a). The petition for a writ of certiorari was filed on July 11, 1986. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTIONS PRESENTED 1. Whether the district court properly ordered petitioner, who was indigent, to pay restitution under the Victim and Witness Protection Act of 1982, 18 U.S.C. 3579 and 3580. 2. Whether a governmental entity can be a "victim" within the meaning of the restitution provisions of the Victim and Witness Protection Act of 1982. STATEMENT Petitioner pleaded guilty in the United States District Court for the Northern District of California to one count of conspiring to steal and convert to his own use money of the United States, in violation of 18 U.S.C. 371. He was sentenced to five years' imprisonment and ordered to pay $50,000 restitution to the Alameda County Social Services Agency under the Victim and Witness Protection Act of 1982, 18 U.S.C. 3579 and 3580. The court of appeals affirmed. 1. Between October 1981 and October 1983, petitioner and an employee of the Alameda County Social Services Agency devised and executed a scheme to cause the improper payment of more than $1,200,000 in benefits under the Aid to Families with Dependant Children program. /1/ The government employee caused the issuance of checks to individuals who were willing to receive the checks, cash them, and pay over most of the money received. Petitioner recruited at least twenty such check recipients and found other recruiters for additional recipients. Petitioner received between $200,000 and $400,000 in kickbacks under the scheme /2/ in addition to $18,000 in checks issued in his own name. Pet. App. 1a-2a. After petitioner's conviction on his guilty plea, a presentence report was submitted to the court. The report indicated that petitioner had no assets, no net worth, and no legitimate means of support. He had three children by different women and had not held a steady job since 1981, when he earned $10 an hour on a demolition crew (Pet. App. 3a; Pet 6). Petitioner attended college for four years and later played professional basketball, earning $5,000 to $9,000 per season until 1981 (Pet. App. 3a). Petitioner claimed that he purchased drugs with the money he received from his crime, but he also claimed to have ended his cocaine habit by August 1983 (Pet. App. 2a; Presentence Report 11). At petitioner's May 31, 1984, sentencing hearing, /3/ the court informed petitioner that, after reading the presentence report, he regretted accepting the plea agreement because he did not think the maximum sentence available for violating 18 U.S.C. 371 sufficiently reflected the seriousness of petitioner's fraud (Pet. App. 10a). In a discussion immediately following the court's order of five years' imprisonment and $50,000 restitution, defense counsel argued that restitution was not appropriate because petitioner had no access to funds for payment (Pet. App. 14a). The government informed the court that if petitioner did not pay restitution, some alternative to payment, such as community service, might have to be imposed at a later date (ibid.). The government also noted that petitioner presumably would be in good health after leaving prison and would be able to obtain employment (Pet. App. 14a-15a). Both the court and the government observed that the amount of restitution ordered was only a fraction of the amount petitioner obtained from his offense (ibid.). The court thereupon reaffirmed its order (ibid). 2. On September 24, 1984, petitioner filed a motion under Fed. R. Crim. P. 35 for correction and modification of his sentence, asking for a reduction in the prison term and elimination of the restitution requirement (ER 111). Petitioner claimed that the restitution order was illegal in light of his indigency and that the restitution statute (18 U.S.C. 3579 and 3580) did not authorize restitution to governmental entities. On March 6, 1985, the district court denied the motion. The court concluded: "(h)aving reviewed the file and devoted careful consideration to the material submitted in support of the instant motion, the Court is unpersuaded that the sentence originally imposed should be modified or reduced as a result of the information now presented" (ER 119). 3. The court of appeals affirmed (Pet. App. 1a-6a). The court held that the restitution statute permitted a sentencing court to order an indigent defendant to pay restitution, and that the record demonstrated that the court had complied with the statutory requirement that it consider petitioner's ability to pay before ordering restitution (Pet. App. 3a-4a). The court of appeals also held that a governmental entity could be a "victim" eligible for restitution under the statute (Pet. App. 4a-6a). ARGUMENT Petitioner contends (Pet. 5-17) that the order of restitution was improper because he is indigent and the district court gave inadequate consideration to his financial resources and obligations. Petitioner also contends (Pet. 17-21) that a governmental entity cannot be a "victim" entitled to compensation under 18 U.S.C. 3579. Neither contention warrants this Court's review. 1. The restitution provisions of the Victim and Witness Protection Act of 1982 (18 U.S.C. 3579 and 3580) require a sentencing court either to order full restitution for specified property losses and personal-injury costs resulting from an offense, or to state reasons for ordering less than full restitution (18 U.S.C. 3579(a)). The court must order restitution that "is as fair as possible to the victim" (18 U.S.C. 3579(d)) and must consider the amount of loss caused to a victim by the offense, the defendant's financial resources, the financial needs and earning ability of the defendant and his dependents and other factors deemed appropriate by the court (18 U.S.C. 3580(a)). Restitution may be in the form of services rather than money, if the victim consents (18 U.S.C. 3579(a)(4)), and may be ordered to be paid in installments during the five-year period after the end of a term of imprisonment (18 U.S.C. 3579(f)(2)(B)). If an imprisoned defendant is placed on parole, payment of restitution automatically becomes a condition of parole (18 U.S.C. 3579(g)), /4/ but before a defendant's parole may be revoked for failure to pay, the Parole Commission must consider the parolee's employment status, earning ability, and financial resources, the willfulness of the failure to pay, and other relevant special circumstances of the defendant (18 U.S.C. 3579(g)). This statutory scheme clearly focuses on maximizing reimbursement of covered losses to victims of Title 18 offenses. Just as clearly, the Act contemplates that a sentencing court may impose an order of restitution on an indigent defendant in appropriate circumstances. Thus, the courts of appeals have consistently held that a sentencing judge's imposition of an order of restitution is not an abuse of discretion merely because the defendant is indigent at the time of sentencing. See, e.g., United States v. Mounts, 793 F.2d 125 (6th Cir. 1986), petition for cert. pending on other grounds, No. 86-5135; United States v. Fountain, 768 F.2d 790, 802 (7th Cir. 1985), cert. denied, No. 85-6222 (Apr. 21, 1986); United States v. Keith, 754 F.2d 1388, 1393 (9th Cir. 1985), cert. denied, No. 84-6509 (Oct. 7, 1985); United States v. Brown, 744 F.2d 905, 911 (2d Cir.), cert. denied, 469 U.S. 1089 (1984). Cf. United States v. Roberts, 783 F.2d 767 (9th Cir. 1985); United States v. Carson, 669 F.2d 216, 217-218 (5th Cir. 1982), cert. denied, No. 84-6509 (Oct. 7, 1985) (restitution may be ordered as condition of probation despite discharge in bankruptcy). Accordingly, the court below correctly concluded that indigency does not immunize a convicted defendant from a restitution order. The court of appeals also correctly concluded that the district court fulfilled its statutory duty to give due consideration to petitioner's financial status and obligations. The presentence report described petitioner's employment history, education, and family situation. The district court carefully considered the presentence report and the arguments of defense counsel. Moreover, the court's decision was, on the merits, well within its discretion. Although unemployed and the father of three children, /5/ petitioner is in good health, has considerable education, claims that his drug problem is under control, and has held a job that paid $10 per hour. Further, petitioner had stolen from his victim between four and eight times the amount of restitution he was ordered to pay. In these circumstances, the district court was justified in "(r)ecognizing that indigency may be temporary" (United States v. Brown, 744 F.2d at 911) and in requiring petitioner to make restitution in a reasonable amount if he is ever able to do so. See United States v. Fountain, 768 F.2d at 802-803. The cases relied on by petitioner are not to the contrary. In United States v. Gomer, 764 F.2d 1221 (7th Cir. 1985), nothing in the record suggested that the sentencing judge had considered the needs of the defendant's dependents; here, the sentencing court had information in the presentence report on all the factors required to be considered and gave defense counsel at least two opportunities to comment on those factors. See also United States v. Fountain, 768 F.2d at 803. In United States v. Palma, 760 F.2d 475 (3rd Cir. 1985), the sentencing judge ordered restitution in an amount the court itself considered "very unrealistic"; here, the sentencing court considered the $50,000 restitution justified because it was not necessarily beyond petitioner's future ability to pay, because it was only one-eighth of the amount petitioner had gained from the offense, because the amount could be adjusted in the future if it proved unpayable. Cf. 18 U.S.C. 3579(g); Bearden v. Georgia, 461 U.S. 660 (1983). In United States v. Watchman, 749 F.2d 616, 618-619 (10th Cir. 1984), the presentence report failed to inform the sentencing court of the facts the court was required to consider in determining restitution; here, the presentence report was complete and the sentencing court fully considered the report and supplemental information provided by petitioner both at sentencing and in the Rule 35 consideration. Finally, in United States v. Durham, 755 F.2d 511 (6th Cir. 1985), the district court failed to consider the defendant's financial condition; here, the sentencing court took that factor, as well as all others indentified in the statute, into account. 2. Petitioner's contention that a governmental entity is not a "victim" authorized to receive restitution payments is without merit. Under 18 U.S.C. 3579(a) (1), the sentencing court is required to order payment of restitution to "any victim" of any offense under Title 18 of the United States Code. The language of the statute thus clearly covers governmental entities when they are victimized. The legislative history indicates no narrower view of who may recover restitution under the statute. See S. Rep. 97-532, 97th Cong., 2d Sess. 31 (1982). Coverage of governmental entities is likewise required by the broad purposes of the restitution statute. Restitution is designed to "insure that the wrongdoer is required to the degree possible to restore the victim to his or her prior state of well-being" and to require felons to act responsibly when they complete their prison sentences, in part by paying restitution to their victims. S. Rep. 97-532, supra, at 30-31. These purposes would be undermined if a convicted defendant could escape restitution whenever the victim happened to be a governmental entity. Indeed, for many Title 18 offenses, the victim is necessarily a governmental entity (e.g., 18 U.S.C. 371 (conspiracy to defraud the United States); chapter 25 of title 18 (counterfeiting and forgery); 18 U.S.C. 545 (smuggling)). Nothing in the statute, which applies to all Title 18 offenses, or in its legislative history suggests an intent to exempt this broad class of crimes from restitution orders. Cf. United States v. Mischler, 787 F.2d 242 (7th Cir. 1986) (restitution to Medicare approved as condition of probation under 18 U.S.C. 3651); United States v. Fountain, 768 F.2d at 802 (restitution to Department of Labor authorized); United States v. Dudley, 739 F.2d 175, 178 (4th Cir. 1984) (finding it "likely that the government is not foreclosed from establishing that it has been victimized by the crime and recovering restitution"). CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. CHARLES FRIED Solicitor General WILLIAM F. WELD Assistant Attorney General KAREN SKRIVSETH Attorney OCTOBER 1986 /1/ Aid to Families with Dependent Children is a welfare program established under Part A of Title IV of the Social Security Act (42 U.S.C. 603). The program is administered by local government entities, but about half the funding is supplied by the federal government. /2/ Petitioner admitted receiving "about one-third of all the money" but claimed that the total loss was $600,000, not $1,200,000, as the district court found (Presentence Report at 3-4; Excerpt of Record in Court of Appeals (ER) 130:8). /3/ The court had conferred informally with both attorneys and the probation officer regarding the contents of the presentence report before the hearing (Pet. App. 9a, 13a). /4/ Under 28 C.F.R. 2.33(d), if a prisoner has an unsatisfied restitution order at the time of his release on parole "a reasonable plan for payment * * * shall, where feasible, be included in the parole release plan." /5/ Petitioner emphasizes his obligation to support his children (see, e.g., Pet. 4, 7 and 16), but the presentence report provides no grounds for believing that petitioner had assumed responsibility for the two oldest children. In his memorandum in support of his motion to reduce or correct his sentence (Fed. R. Crim. P. 35), petitioner stated that he "is the father of three young children, and desires to provide for their needs" (ER 112:7).