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United States v. Carey

June 27, 2006

UNITED STATES OF AMERICA, PLAINTIFF,
v.
STEVEN CAREY, DEFENDANT.



The opinion of the court was delivered by: District Judge Susan J. Dlott

Magistrate Judge Timothy Hogan

ORDER DENYING MOTION TO CLARIFY OR AMEND JUDGMENT

This matter comes before the Court on Defendant Steven Carey's Motion*fn1 to Clarify or Amend Judgment. (Doc. #21.) For the reasons below, the Motion is DENIED.

I. BACKGROUND

In late October 2005, this Court sentenced Defendant Carey and a number of other individuals to terms of incarceration for their participation in a mortgage fraud or "flipping" conspiracy. Representatives of Trustcorp, a financial institution that sustained losses on fraudulent mortgages, appeared at a number of the sentencing hearings to petition the Court for awards of criminal restitution pursuant to the Victim and Witness Protection Act ("VWPA"), 18 U.S.C. § 3663 et seq., and Mandatory Victims Restitution Act ("MVRA"), 18 U.S.C. § 3663A.

At Defendant Carey's sentencing hearing, Trustcorp submitted that it had sustained $78,955 in losses on fraudulent mortgage transactions with which Defendant Carey had been involved, and sought an order of restitution against Carey in that amount. For support, Trustcorp submitted an exhibit representing that it had lost $78,955 on a loan designated as "752 Whittier Street, Account Number 330000." (See Trustcorp Mortgage Company Statement as to Steven Carey and attachment (submitted as sentencing exhibit).) Counsel for Defendant Carey did not object to the requested $78,955 award. The Court accordingly ordered Defendant Carey to pay $78,955 to Trustcorp in its October 25, 2005 oral pronouncement of sentence, and included that obligation in Carey's October 31, 2005 Judgment and Commitment Order ("J&C"). (See doc. #19-1 at 5-6.) The Court also ordered Carey to pay $6,279 in restitution to the Internal Revenue Service, for a total restitution obligation of $85,234, as well as a $50,000 fine. (Id. at 5.)

While Defendant Carey's counsel did not object to Trustcorp's restitution demand at sentencing, counsel for several other "flipping" defendants the Court sentenced in late October 2005 did object to Trustcorp's sentencing demands against their clients. The Court set a further hearing to determine the validity of Trustcorp's restitution demands against these objecting defendants, along with restitution claims by other entities allegedly injured in the "flipping" scheme. Because Defendant Carey was not among the objecting defendants, he was not a designated party to the restitution hearing. However, the Court recognized that the sentencing exhibit Trustcorp had submitted in support of its $78,955 restitution demand against Carey had represented that one of the objectingdefendants, Charlene Bold, could be jointly liable on the same underlying mortgage transaction and loss. (See Trustcorp Mortgage Company Statement as to Steven Carey and attachment (submitted as sentencing exhibit).) Therefore, in preparing Defendant Carey's J&C, the Court checked the box indicating that restitution could be "joint and several," with any jointly liable defendants and/or amounts "to be determined by Order of the Court" after the restitution hearing. (See doc. #19-1 at 6.)

Pursuant to 18 U.S.C. § 3664(d)(6), Magistrate Judge Hogan held the scheduled restitution hearing for this Court in early December 2005*fn2 and issued a Report and Recommendation ("R&R") on December 16th, 2005.*fn3 (See, e.g., Ex. A, doc. #32 to 1:03-cr-129 (Order Adopting R&R) at 3.)*fn4 While the hearing was intended in large part to explore the factual and legal basis for Trustcorp's restitution claims as to the objecting Defendants, that purpose was mooted when, in the course of the hearing, Trustcorp reached a series of civil settlements with those objecting defendants. (Id. at 1-3.) The R&R therefore focused primarily on the restitution demands of another claimant, the neighborhood group Price Hill Will, against another defendant, Ronald Trester, against whom Trustcorp had not sought restitution. (Id. at 3.)

On January 20, 2006, this Court entered an Order adopting the Magistrate Judge's R&R on restitution. (Ex. A.) In that Order, attached as Exhibit A, the Court explicitly declined to rule on the merits or appropriate amounts of any of the restitution demands Trustcorp had presented at the objecting defendants' sentencing hearings, noting that "the relevant demands have been withdrawn pursuant to civil settlements." (Id. at 1, 3; see also id. at 20-21 (analysis).)*fn5

Therefore, the Court never had occasion to determine whether -- or to what extent -- other defendants, including but not limited to Charlene Bold, might be jointly and severally liable for any losses on the 752 Whittier Street mortgage that served as the basis for Trustcorp's restitution demand against Defendant Carey.

On May 3, 2006, the Court received Defendant Carey's present Motion to Clarify or Amend Judgment. (Doc. #21.)*fn6 Carey writes, in relevant part, that

At the time of my sentencing [the Court] ordered me to pay $50,000 in fines and $85,234 in restitution to the IRS and Trust-Corp Mortgage. [The Court] also stated that on January 20th, 2006 there would be a separate hearing to determine Joint and Several Liability to Trustcorp Mortgage. I am writing to you today to find [sic] the results of the 20 January hearing.*fn7 I am also writing to request that you consider lowering my restitution to the amount of $15,791. This amount equals 1/5th of the total restitution to Trustcorp Mortgage. I believe this is the true amount owed as I was only one of five people involved in this transaction. (Id.)

II. ANALYSIS

Upon review, the Court declines to amend Defendant Carey's October 31, 2005 J&C to require him to pay only $15,791 in criminal restitution to Trustcorp. ...


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