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Date: 01-10-2022
Case Style:
United States of America v. Ana Alverez
Case Number: 21-1119
Judge: Joel Flaum
Court: center>
United States Court of Appeals
For the Seventh Circuit
On appeal from The United States District Court for the
Southern District of Indiana, Indianapolis Division.
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
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Description:
Chicago, IL - Criminal defense lawyer represented defendant with thirteen counts stemming from her participation in a scheme involving the creation of hundreds of fake credit cards.
A. Alverez’s Conviction, First Restitution Order, and
First Appeal
In 2015, Alverez—with two other participants, Victor
Verejano‐Contreras and Guillermo Bacallao‐Fernandez—cre‐
ated 647 fake credit cards and made $52,631.15 in fraudulent
purchases. Verejano‐Contreras absconded and is currently a
fugitive. Bacallao‐Fernandez pleaded guilty in 2018 to one
count of misprision of a felony. He was sentenced to 12
months’ probation and ordered to pay $1,000 in restitution;
the restitution was imposed on a joint and several basis with
his co‐defendants. Alverez pleaded not guilty and went to
trial in March 2019. The jury convicted her on all counts: three
No. 21‐1119 3
counts of access device fraud, see 18 U.S.C. § 1029(a), and ten
counts of aggravated identity theft, see 18 U.S.C. § 1028A.
The district court held a sentencing hearing on August 19,
2019. Alverez was sentenced to 60 months’ incarceration, a
slightly‐below‐guideline sentence. Most pertinent to this ap‐
peal, the court also ordered Alverez to pay over $50,000 in
restitution. However, inconsistencies in various sentencing
records regarding the amount of restitution, as well as the
number of victim payees, created confusion regarding that or‐
der. On the one hand, at the sentencing hearing, the district
court orally imposed $52,562.15 in restitution payable to three
victim financial institutions according to the “proportions …
laid out in the presentence report [(“PSR”)],” but the PSR left
the proportions “TBD.” The written judgment, on the other
hand, ordered restitution of $52,561.151 to five financial insti‐
tutions, and described (for the first time) how the total loss
amount should be divided. The judgment further specified
that Alverez was jointly and severally liable for the restitution
with her co‐defendant, Bacallao‐Fernandez. It also set forth a
payment plan, providing that “[a]ny unpaid restitution bal‐
ance during the term of supervision shall be paid at a rate of
not less than 10% of the defendant’s gross monthly income.”
Alverez appealed, arguing that the restitution order was
unlawful for severalreasons, most significantly due to the dis‐
crepancies among the PSR, oral sentencing, and entered judg‐
ment.
1 This total amount conforms to the number listed in the PSR, which
was one dollar less than the amount recited by the court at sentencing. The
one‐dollar discrepancy between the two amounts appears to be an inad‐
vertent misstatement, with $52,561.15 being the correct number.
4 No. 21‐1119
Instead of responding to Alverez’s brief, the government
filed a motion to remand. It agreed that we should vacate the
judgment and remand to allow the district court to correct the
restitution order. The government also conceded that “further
restitution proceedings” would “relat[e] only [to] the three
victim banks named by the district court” during the sentenc‐
ing hearing.
We granted the government’s motion, vacated the judg‐
ment, and remanded for “further proceedings … that are con‐
sistent with the government’s representations in its motions
papers.”
B. Proceedings on Remand and the Second Restitu‐
tion Order
On remand, the district court solicited the government’s
“proposal for remediating the deficiencies in [the] previous
restitution order identified by the Court of Appeal[s] as well
as the government in its appellate filings.” The court also in‐
structed the parties to “indicate in their filings whether an
amended restitution order can be entered by stipulation or
whether a hearing is required to resolve any specific issues.”
The government sought an order requiring Alverez to pay
$16,652.90 in restitution. Although the government main‐
tained that trial evidence established actual losses of at least
$52,631.15 to five banks, “[i]n light of the Seventh Circuit’s or‐
der,” the government did not request restitution to be paid to
the two institutions not mentioned during the sentencing
hearing. “In calculating the amount of restitution due,” the
government also “credited [Alverez] for the $34,141.23 … that
was forfeited to the Carmel Police Department [after her ar‐
rest in 2015], and for the $1,000 in restitution that the [district
No. 21‐1119 5
court] ordered [her co‐defendant] Guillermo Bacallao‐Fer‐
nandez to pay ….” All told, the restitution requested on re‐
mand, $16,652.90, was $35,978.25 less than the $52,631.15
amount requested at the original sentencing.
In response, Alverez maintained that any restitution order
would be improper,2 but “[w]ithout waiving [that] argu‐
ment,” she agreed that the credits the government applied to
the restitution amount were correct.
Germane to the instant appeal, Alverez further argued
that “the restitution obligation should be joint and several for
all three defendants or, in the alternative, the Court should
apportion the restitution among all three defendants after a
hearing at which a determination of their relative culpability
and of each defendant[‘s] ability to pay can be litigated” pur‐
suant to 18 U.S.C. § 3644(h). Additionally, Alverez observed
that she was found indigent when she was indicted, and ap‐
pointed counsel has represented her throughout these crimi‐
nal proceedings. She requested “a hearing … to determine
how and when payments should be made” and her “ability to
pay as required by 18 U.S.C. § 3664(f)(3)(B).” Alverez asserted
that she would use the requested hearing to establish that
“based on her economic circumstances, current[] and pro‐
jected, and her medical disabilities, she should be ordered to
pay only a nominal, periodic amount [toward any restitution
entered] as provided by 18 U.S.C. § 3664(f)(3)(B).”
In reply, the government contended that apportionment
of restitution was not appropriate, and Alverez’s indigency
should not “reduce any restitution order to a ‘nominal,
2 Alverez does not raise these supposed errors on appeal now, so they
are not relevant to this decision.
6 No. 21‐1119
periodic amount.’” The government addressed Alverez’s cul‐
pability relative to her co‐defendants, but not her ability to
pay.
The district court did not hold a hearing as Alverez re‐
quested; instead, four days after the government filed its re‐
ply brief, the court entered its amended restitution order. In
doing so, the district court made three findings:
[First,] that all evidence relied on by the Gov‐
ernment in support of its request for an
amended restitution order was previously pre‐
sented at trial and therefore does not run afoul
of United States v. Noble, 367 F.3d 681 (7th Cir.
2004) and United States v. Wyss, 147 F.3d 631 (7th
Cir. 2004), which generally preclude the Gov‐
ernment from introducing new evidence at a
second sentencing hearing;
[Second,] that the Defendant is liable for pay‐
ment of the full amount of restitution and is not
entitled to a reduction based on indigency; and
[Third,] that the portions of the amended resti‐
tution order, reflecting the Government’s con‐
cessions with respect to … reduced restitution,
are not opposed by Defendant and therefore ac‐
cepted by the Court.
The court then ordered Alverez to pay restitution to the
original three victims in the amounts requested by the gov‐
ernment. The order did not set a payment schedule, and it was
silent on joint and several liability.
No. 21‐1119 7
Alverez now appeals for a second time.
II. Discussion
“[F]ederal courts possess no inherent authority to order
restitution, and may do so only as explicitly empowered by
statute.” United States v. Donaby, 349 F.3d 1046, 1052 (7th Cir.
2003) (citation omitted). When it enacted the Mandatory Vic‐
tim’s Restitution Act (“MVRA”), “Congress explicitly re‐
quired that ‘the court shall order’ restitution to the victims of
certain specified offenses.” Id. (quoting 18 U.S.C.
§ 3663A(a)(1)). Alverez’s convictions are such offenses. See 18
U.S.C. § 3663A(c)(1)(A)(ii) (including offenses against prop‐
erty involving fraud or deceit in the MVRA’s mandate). The
MVRA sets forth the “[p]rocedure for issuance and enforce‐
ment of order[s] of restitution.” See 18 U.S.C. § 3664.
“We review de novo questions of law regarding the fed‐
eral courts’ authority to orderrestitution,” and “we review for
abuse of discretion a district court’s calculation of restitution,
taking the evidence in the light most favorable to the
[g]overnment.” United States v. Webber, 536 F.3d 584, 601 (7th
Cir. 2008) (citations omitted). We review “questions related to
the interpretation of [18 U.S.C. § 3664 and Federal Rule of
Criminal Procedure 32(c)(1)(B)] and whether the district court
followed the prescribed procedures, which are questions of
law, de novo.” United States v. Wyatt, 9 F.4th 440, 450 (7th Cir.
2021).
Alverez argues that the district court erred in three ways:
first, when it changed course from the first restitution order
and made Alverez solely responsible for restitution, instead
of jointly and severally liable with her co‐defendants; second,
when it did not set a schedule for Alverez’s restitution
8 No. 21‐1119
payments per 18 U.S.C. § 3664(f)(2); and third, when it did not
hold another sentencing hearing on restitution, which Al‐
verez argues was required by the Due Process Clause or 18
U.S.C. § 3553(c). The government agrees that a remand is ap‐
propriate with respect to the first and second issues, but it dis‐
agrees on the third. We turn first to the issue of joint and sev‐
eral liability.
A. Joint and Several Liability
Both parties agree that the district court erred when it did
not specify whether Alverez was liable for the restitution
amount on a joint and several basis with her co‐defendants
(thereby making Alverez solely liable by default).
The MVRA authorizes the imposition of joint and several
liability “on all defendants for loss caused by others partici‐
pating in the scheme.” United States v. Dokich, 614 F.3d 314,
318 (7th Cir. 2010) (citing 18 U.S.C. § 3663A(a)(2); United States
v. Martin, 195 F.3d 961, 968–69 (7th Cir. 1999)); 18 U.S.C.
§ 3664(h). Although Alverez raised the issue of joint and sev‐
eral liability during her briefing below, the second restitution
order did not address it. This was a departure from the first
restitution order, which specifically stated that Alverez
would be liable for her restitution obligation jointly and sev‐
erally with Bacallao‐Fernandez.
Where a defendant has raised a “specific, rational objec‐
tion[]” at sentencing, the district court must respond “so that
the defendant and a reviewing court can understand its rea‐
sons.” United States v. Moose, 893 F.3d 951, 961 (7th Cir. 2018).
Furthermore, when a case is remanded for additional sentenc‐
ing proceedings and the sentence changes, a district court
must explain “why consideration of the same factors
No. 21‐1119 9
warranted [a less favorable sentence] on resentencing,” and a
“more significant justification is necessary for more substan‐
tial departures.” See United States v. Ballard, 950 F.3d 434, 436–
37 (7th Cir. 2020) (holding that the district court failed to jus‐
tify a greater upward departure from the Guidelines on re‐
mand than the upward departure that originally had been im‐
posed).
Accordingly, the district court procedurally erred when it
did not address Alverez’s argument for joint and several lia‐
bility and explain why sole liability—a more onerous sen‐
tence—was appropriate after remand. See id. at 437 (“We con‐
clude that the district court committed procedural error by
not providing an adequate explanation for the major upward
departure from the Guidelines range on resentencing.”).
B. Alverez’s Remaining Arguments
Alverez also argues that her indigency required the dis‐
trict court to set a payment schedule. See 18 U.S.C. § 3664(f)(2);
United States v. Day, 418 F.3d 746, 761 (7th Cir. 2005) (holding
that district courts have a non‐delegable duty to fix a payment
schedule for restitution when the defendant does not have the
resources to make immediate payment); United States v. Saw‐
yer, 521 F.3d 792, 796 (7th Cir. 2008) (holding that where the
defendant lacks “the ability to pay immediately,” § 3664(f)(2)
“require[s] … judges to set schedules for repayment from fu‐
ture earnings and other income once they leave prison,” alt‐
hough the error does not “affect substantial rights” for pur‐
poses of plain error review under Federal Rule of Criminal
Procedure 52(b)). The government agrees that Alverez is
10 No. 21‐1119
indigent,3 and it does not challenge the necessity of a payment
schedule in this case. On remand, therefore, the district court
should address Alverez’s arguments concerning her ability
(or lack thereof) to immediately pay the restitution amount.
See Moose, 893 F.3d at 960 (holding that a sentencing judge
“must offer some explanation for appellate review”).
In addition to the points on which the government agrees,
Alverez argues that the Due Process Clause, as well as 18
U.S.C. § 3553(c), required the district court to hold a hearing
prior to entering the second restitution order. Because we va‐
cate the second restitution order for the reasons discussed, we
need not opine on what procedures were necessary prior to
its entry. However, as noted above, the district court is not
precluded from exercising its discretion to hold another sen‐
tencing hearing on remand. See United States v. Harris, 813 F.
App’x 710, 713–14 (2d Cir. 2020) (“[I]n the context of contested
issues regarding the propriety of a restitution award ... the
sentencing procedures employed to resolve such disputes are
within the district court’s discretion so long as the defendant
is given an adequate opportunity to present his position.” (al‐
terations in original) (citation omitted)); United States v. Robl,
8 F.4th 515, 528–29 (7th Cir. 2021).
Outcome: For the foregoing reasons, we VACATE the second restitu‐
tion order of the district court and REMAND for further pro‐
ceedings consistent with this opinion.
Plaintiff's Experts:
Defendant's Experts:
Comments: