United States District Court, S.D. Ohio, Western Division, Dayton
TIMOTHY S. BLACK JUDGE.
SUPPLEMENTAL REPORT AND RECOMMENDATIONS ON
MICHAEL R. MERZ UNITED STATES MAGISTRATE JUDGE
criminal case is before the Court on Objections by the United
States (ECF No. 283) to the Report and Recommendations on
Restitution (“Report, ” ECF No. 282). District
Judge Black has recommitted the matter for reconsideration
under Fed. R. Crim. P. 59(b)(2). Defendant Paul David
Musgrave and Intervenor Barbara Musgrave have responded to
those Objections (ECF Nos. 286, 287), making the Objections
ripe for consideration.
Sixth Circuit remanded this case with an order that this
Court “hold an evidentiary hearing to determine which
assets the United States can reach to enforce the order of
restitution.” United States v. Musgrave, Case
No. 15-3388, 664 Fed.Appx. 540 (6th Cir. Nov. 30,
2016)(unpublished; copy at ECF No. 238). The Sixth Circuit
also set out the legal standard to be applied to the question
on remand. Id. at 542-43, principally relying on
Drye v. United States, 528 U.S. 49 (1999), and
United States v. Craft, 535 U.S. 274 (2002).
remanded question was referred to the undersigned to conduct
the required evidentiary hearing and file a report and
recommendations with proposed findings of fact and
conclusions of law (Order of Referral, ECF No. 240, PageID
4487). Although the Order of Referral mentions only Fed. R.
Crim. P. 59, 18 U.S.C. § 3664(d)(6) expressly authorizes
reference to a Magistrate Judge “for proposed findings
of fact and recommendations as to disposition, subject to a
de novo determination of the issue by the court.”
Findings of Fact
evidence was presented, the Magistrate Judge ordered that the
exhibits be filed and that each party also file
“proposed findings of fact and conclusions of law in
the form required by Fed.R.Civ.P. 52 and Fed. R. Crim. P.
59(b)(1) . . . . Proposed findings of fact shall reference
with PageID numbers the place or places in the record that
support the proposed finding” (Order for Post-Hearing
Briefing, ECF No. 251, PageID 4532).
Government's Post-Hearing Brief (ECF No. 276) and its
Reply Brief fail utterly to comply; there is not a single
PageID reference anywhere in either one of them. The
Government's opening Brief contains sixty-three proposed
findings of fact in numbered paragraphs, none of which has a
PageID reference (ECF No. 276, PageID 6344-51).
preparing the Report, the Magistrate Judge offered proposed
findings of fact in narrative form rather than in numbered
paragraphs (Report, ECF No. 282, PageID 6411-19). This manner
of complying with Fed.R.Civ.P. 52 is a common practice in
this Court. See, e.g., In re: Ohio Execution Protocol
Litigation (McGuire), 994 F.Supp.2d 906 (S.D.
Ohio Jan. 13, 2014); In re: Ohio Execution Protocol
Litigation (Lorraine), 840 F.Supp.2d 1044 (S.D.
Ohio Dec. 23, 2013). Because the parties proffered proposed
findings of fact which the Magistrate Judge ultimately found
not material, the proposed findings of fact in the Report are
prefaced with this language:
In constructing this set of factual findings, the Magistrate
Judge has included every finding proposed by any of the
parties which is appropriately supported by evidence without
attempting to decide its relevance or materiality; those
questions are reserved for the analysis section below.
(Report, ECF No. 282, PageID 6411.)
Objections, the Government criticizes the Report for not
having adopted its proposed findings of fact numbered 18, 19,
25, 27, 28, 31, 32, 33, 45, 52, 53, 59, and 62 (Objections,
ECF No. 283, PageID 6432-34). The following table sets forth
the Government's proposed findings assertedly omitted
from the Report and the treatment of that proposed finding in
Related proposed finding in the
No. 18 In conjunction with
opening said accounts, Mrs. Musgrave
executed a limited power of attorney form,
authorizing the defendant to serve as her
“attorney-in-fact” on each of
the three said TD Ameritrade accounts.
On May 26, 2011, Barbara Musgrave gave
David a limited power of attorney for her
three TD Ameritrade accounts. (Report, ECF
No. 282, PageID 6415.)
No. 19 This limited power
of attorney specifically authorized the
defendant to act as her attorney-in-fact,
to wit: to act as her agent “to
buy, sell, and trade stocks, bonds, and any
other securities and/or contracts relating
to the same on margin or otherwise in
accordance with your terms and conditions
for (Mrs. Musgraves's) account . . . .
In all such purchases, sales or trades (TD
Ameritrade) [is] authorized to follow the
instructions of my Agent in every respect
concerning my account with you; and my
Agent is authorized to act for
David Musgrave's authority under this
POA is limited to the purchase and sale of
securities as Barbara Musgrave's agent;
he has no authority to make any transfers
to himself or otherwise engage in
self-dealing. Barbara Musgrave did not
execute the section of this form POA
permitting David Musgrave to receive a fee
from the account and no evidence was
presented at the hearing that he had ever
withdrawn any funds from any of these
accounts or had any portion of them
transferred to himself. (Report, ECF No.
me and on my behalf in the same manner
and with the same force and effect as I
might or could do with respect to such
purchases, sales or trade . . .
No. 25 The defendant has
continually enjoyed the right to exclude
third parties from said premises.
Nothing in the cited testimony supports
this proposed finding of fact except for
the conclusory opinion of Susan Sigler that
Mr. Musgrave had then apparent right to
exclude others from the residential
property. (Tr. ECF No. 264, PageID 6216.)
That is a subject on which she was not
competent to testify. There was no
testimony that Mr. Musgrave ever actually
No. 27 The defendant has
never entered into had any rental agreement
with his spouse nor paid her rent in order
to continue to occupy this residence.
While Mr. Musgrave admitted on
cross-examination that he does not pay his
wife rent to live in their marital home
(Tr., ECF No. 263, PageID 5869-70), this
fact is immaterial.
No. 28 The residence's
natural gas utility account has always
remained in the defendant's name.
This proposed finding is supported the
evidence and is hereby adopted.
No. 31 On or about
November 16, 2016, the couple jointly
purchased a homeowner's insurance
policy from Auto-Owners Insurance
Co. for said residence.
This proposed finding is supported the
evidence and is hereby adopted.
No. 32 The defendant has
routinely paid his wife $2, 600 a month
from his Wright-Patt Credit Union (WPCU)
personal checking account to help defray
monthly residential maintenance expenses.
After paying his credit card and monthly
restitution amounts, David Musgrave
contributes approximately $2, 600 per month
toward the $13, 000 total. The money is
paid by check drawn on David Musgrave's
Wright-Patt Credit Union account and
deposited into Barbara Musgrave's
Charlotte Metro Credit Union account. After
deduction of the amounts paid separately by
David Musgrave (monthly restitution and
credit card payment) and the amounts paid
separately by Barbara Musgrave (mortgage,
real estate taxes, property insurance,
homeowner's association fee, car loan,
and legal fees), the Musgrave's
consolidated monthly expenses total
approximately $5, 200. (Report, ECF No.
282, PageID 6417.)
No. 33 This $2, 600
monthly payment is deposited into Mrs.
Musgrave's Charlotte Metro Credit Union
(CMCU) checking account from which she pays
the residence's monthly household bills
along with the $1, 913.79
monthly mortgage payment to Wells Fargo
No. 34 On or about January
13, 2010, Mrs. Musgrave purchased and
titled in her name a 2008 Harley Davidson
Model FLTR motorcycle.
On January 13, 2010, Barbara Musgrave
purchased and titled in her name a 2008
Harley Davidson Model FLTR motorcycle.
(Report, ECF No. 282, PageID 6417.)
No. 45 The couple jointly
hold a motor vehicle insurance policy on
said vehicle from Auto-Owners Insurance
The evidence supports a finding that both
Paul and Barbara Musgrave are listed as
insureds on this policy (Tr. ECF No. 263,
PageID 5879). Mr. Musgrave was unsure
whether he contributed to the premiums or
No. 52 As of May 2017, the
defendant is eligible to draw $1, 140.70 in
monthly social security retirement
benefits. The defendant testified he has no
present intention of filing for these
benefits prior to turning 70 years of age.
As of May 2017, David Musgrave is eligible
to draw $1, 140.70 in Social Security
retirement benefits, but testified he does
not intend to apply for such benefits until
reaching seventy years of age. (Report, ECF
No. 282, PageID 6418.)
No. 53 The defendant
further testified he is unwilling to
contribute anything more than the minimum
required amount of said benefits toward
Defendant testified that he was willing to
have any Social Security benefits he may
receive included in the calculation of his
income, but not to contribute more of them
toward restitution than required by law
because “I have to live.” (Tr.
ECF No. 264, PageID 5910.)
No. 59 Mrs. Musgrave's
present version of her Last Will and
Testament provides in a trust provision,
that her estate assets will be made
available to the defendant following her
“On April 17, 2017, Barbara Musgrave
changed the listed beneficiary on her life
insurance policy from David Musgrave to her
three adult children. Soon thereafter David
and Barbara Musgrave executed new wills
with accompanying irrevocable trusts.
Barbara Musgrave's will lists her three
adult children as primary beneficiaries of
her estate.” (Report, ECF No. 282,
PageID 6418.) Susan Sigler testified that
it was her understanding of the estate
documents that, after Mrs. Musgrave's
death, Defendant would have her assets
available to him as well as any income
those assets generated. (Tr., ECF No. 264,
No. 62 Between 2013 and
2017, the defendant significantly reduced
his pro rata portion of secured
liabilities associated with his closely
held businesses GMD Industries and M&M
Investments by in excess of $406, 000.
This finding is supported by Ms.
Sigler's testimony and is hereby
adopted. (See Tr., ECF No. 264, PageID