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United States v. Arnold

United States Court of Appeals, Tenth Circuit

December 27, 2017

UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
RICHARD M. ARNOLD, SR., Defendant-Appellant.

         Appeal from the United States District Court for the Western District of Oklahoma (D.C. No. 5:14-CR-00347-D-1)

          Susan M. Otto, Office of the Federal Public Defender, Oklahoma City, Oklahoma, for Defendant-Appellant.

          Scott E. Williams, Assistant U.S. Attorney (Mark A. Yancey, U.S. Attorney for the Western District of Oklahoma, with him on the brief), Office of the United States Attorney, Oklahoma City, Oklahoma, for Plaintiff-Appellee.

          Before TYMKOVICH, Chief Judge, MATHESON, and BACHARACH, Circuit Judges.

          MATHESON, CIRCUIT JUDGE.

         Richard Arnold, Sr., appeals the district court's forfeiture order following his wire fraud and conspiracy convictions and sentencing for a scheme involving vehicle-financing rebates.[1] He argues the district court erred by (1) imposing an order of forfeiture after sentencing, and (2) failing to require the Government to use forfeited proceeds to offset the restitution Mr. Arnold owes his victims, which would lower the total amount of restitution and forfeiture he is required to pay. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the district court's forfeiture order.

         I. BACKGROUND

         According to the indictment, Mr. Arnold-along with his wife, Robyn, and his sons Ricky and Robert (collectively, "the Arnolds")-devised a scheme to defraud individuals out of the rebates paid to them when they purchased new vehicles. The Arnolds persuaded the victims to turn their rebates over to a charitable trust by falsely representing they would manage the trust to pay off the victims' car loans. Although the Arnolds made some loan payments from the trust, they eventually stopped and used the remaining rebate funds for their own personal expenses. The victims then either took over the loan payments or relinquished the vehicles to the lenders. The indictment notified Mr. Arnold of the Government's intent to seek forfeiture of "a money judgment in an amount equal to the proceeds obtained as a result of the offenses." ROA, Vol. 1 at 43.

         Mr. Arnold pled guilty to one count each of wire fraud and conspiracy to commit wire fraud. See 18 U.S.C. §§ 1343, 1349. He acknowledged in his plea that the Government would pursue forfeiture. Following Mr. Arnold's conviction but before sentencing, the district court granted the Government's motion for a preliminary order of forfeiture. It ordered Mr. Arnold to pay "a money judgment in an amount to be determined" later by the court. ROA, Vol. 1 at 87. The court said "this Preliminary Order of Forfeiture will be amended under Fed. R. Crim. P. 32.2(e)(1) when the amount of the money judgment has been determined by this Court." Id.

         On March 24, 2016, at the first sentencing hearing, the Government reiterated its intent to seek forfeiture once the precise amount owed could be calculated. The district court sentenced Mr. Arnold to 54 months in prison and postponed a final determination on restitution and forfeiture.[2]

         On May 16, 2016, the district court conducted a second sentencing hearing, focused on restitution, and entered a final restitution order of $280, 075.15, payable to the victims who were entitled to compensation under the Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A(a)(1). The court again left the amount of forfeiture unresolved. The Government stated that it would "discuss with counsel a number or potential resolution and submit to the Court a motion for an amended order." ROA, Vol. 5 at 13.

         On June 9, 2016, the Government moved under Fed. R. Crim. P. 32.2(e)(1) to amend the preliminary order of forfeiture, which lacked any specified amount, and to impose a $160, 136.50 forfeiture order. Mr. Arnold objected, arguing the court lacked jurisdiction to amend the preliminary order after sentencing. The court overruled his objection and adopted the Government's proposed forfeiture order. United States v. Arnold, No. CR-14-347-D, 2017 WL 187546, at *3-4 (W.D. Okla. Jan. 17, 2017) ("Rule 32.2 envisions scenarios such as the present and expressly allows orders of forfeiture to be subject to amendment [after sentencing] when the money judgment has been calculated."). This appeal followed.

         II. DISCUSSION

         On appeal, Mr. Arnold challenges the district court's forfeiture order, arguing (1) the Government's failure to establish the amount of forfeiture before sentencing violated Rule 32.2 and thereby deprived the district court of jurisdiction to enter the forfeiture order; and (2) the order failed to require the Government to use Mr. Arnold's forfeited proceeds to reduce the amount of restitution he owes his victims, and it must therefore be vacated.

         In evaluating these arguments, "we review the district court's forfeiture order as we would any other sentencing determination-that is, we review its legal conclusions de novo and its factual findings for clear error." United States v. Bader, 678 F.3d 858, 893 (10th Cir. 2012); see also United States v. McGinty, 610 F.3d 1242, 1245 (10th Cir. 2010) (concluding that we apply de novo review to the district court's legal interpretation of federal forfeiture statutes).

         A. Rule 32.2

         We first consider Mr. Arnold's argument that the Government failed to comply with Rule 32.2 and thus the district court lacked jurisdiction to amend the preliminary forfeiture order after sentencing. We find no Rule 32.2 violation and therefore affirm the district court's forfeiture order.[3]

         1. Legal Background

         Criminal forfeiture is a punitive measure that forces offenders of certain crimes to disgorge any profits obtained from their criminal activity. McGinty, 610 F.3d at 1247. Unlike restitution, which compensates victims for their losses, forfeiture compels the offender to surrender money or substitute assets to the government. Id. (explaining that, given their different purposes, the amount of forfeiture and restitution may differ). The parties agree that Mr. Arnold's conviction for wire fraud ...


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