[00:00:02] Speaker 01:
Case number 13-3073, the United States of America versus Sean Hughes appellant.

[00:00:07] Speaker 01:
Mr. Smith for the appellant, Mr. Howland for the appellee.

[00:00:15] Speaker 02:
Good morning, may I please the court my name is Greg Smith and I am the appointed counsel representing Sean Hughes in this appeal.

[00:00:20] Speaker 02:
This case should be remanded so the district court can do the justice it wanted to do but felt it couldn't.

[00:00:26] Speaker 02:
This court should reverse for any of one of three reasons.

[00:00:29] Speaker 02:
First, the district court erred in believing it must reimpose the same sentence it declared illegal after a vacator.

[00:00:38] Speaker 02:
Second, the district court also erred in finding it couldn't modify the restitution amount or at least apply an offset credit.

[00:00:46] Speaker 02:
And third and finally, the district court and this court both have inherent authority to require notice to the court and counsel before the treasury seizes funds at DOJ's request for the sole purpose of satisfying a judicial criminal restitution order.

[00:01:02] Speaker 05:
Could I just find out what stage things are at?

[00:01:05] Speaker 05:
The tax refunds have been, in fact, not sent to where kept by the Treasury.

[00:01:16] Speaker 05:
Correct.

[00:01:16] Speaker 05:
And has your mortgage been foreclosed?

[00:01:21] Speaker 02:
Your Honor, she is still fighting the mortgage and still does have her home.

[00:01:27] Speaker 02:
I don't know quite how.

[00:01:28] Speaker 02:
I think perhaps through help from friends and family, but it has not yet been seized, although it is still in foreclosure proceedings.

[00:01:36] Speaker 02:
So I think that the matter will maintain.

[00:01:37] Speaker 05:
But the refund money is now in the Treasury and the Treasury's general department rather than what the Treasury owes to people.

[00:01:46] Speaker 02:
Yes.

[00:01:47] Speaker ?:
Okay.

[00:01:49] Speaker 02:
Turning to the first issue, the court did not need to reimpose an erroneous sentence after a vacator.

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The court could re-sentence her.

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Finality concerns were no longer in play once the original sentence was vacated without objection by the government.

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The vacator was vacator was never itself vacated.

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The court made a factual finding that the court that the government had consented.

[00:02:12] Speaker 02:
That finding was not clear error and there was a formal order of vacator.

[00:02:17] Speaker 02:
The original sentence in fact remains vacated today over two years later.

[00:02:22] Speaker 01:
Let's say that the government did not concede.

[00:02:26] Speaker 01:
that it was OK to vacate this sentence.

[00:02:29] Speaker 01:
Would the court nevertheless have a authority to do it?

[00:02:33] Speaker 01:
In other words, does your argument rest on their concession?

[00:02:37] Speaker 02:
Their position is they did not consent, but the court found that they had.

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And so our position is that the vacator, since it was not objected to, and it remains in place, and they never appealed the decision or cross-appealed it, and it remains vacated today, that it is a vacated sentence.

[00:02:55] Speaker 02:
Because it was vacated, the court could re-sentence.

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And it acknowledged the original sentence had two significant errors.

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It even apologized to Ms.

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Hughes back here for having to re-impose it, because she didn't want to do it.

[00:03:08] Speaker 02:
She said it was admittedly an illegal sentence.

[00:03:11] Speaker 02:
The government's position, Judge Brown, is that two wrongs make a right.

[00:03:15] Speaker 02:
That even though it was a wrong sentence, she was required to re-impose a wrong sentence.

[00:03:21] Speaker 02:
Well, I don't think that's required.

[00:03:22] Speaker 02:
Under Dorsalee, this is not a mandatory restitution situation.

[00:03:29] Speaker 05:
Can we put that aside for a moment and turn to the question of whether under Rule 36 she could resolve self-contradictions in the original judgment?

[00:03:45] Speaker 05:
I'm not sure this is the case, but suppose there's a contradiction between the mandated monthly payment and the principal sum.

[00:03:55] Speaker 05:
The relationship is certainly not made crystal clear.

[00:03:59] Speaker 05:
Would Rule 36 allow her to clarify the possible self-contradiction?

[00:04:09] Speaker 02:
Your honor, we do believe World 36 provides that authority and that's our second argument is she also had the ability to modify the restitution order.

[00:04:17] Speaker 02:
pursuing the law.

[00:04:18] Speaker 05:
Yeah, when you talk modified, and it seems to me you're running into trouble in terms of the relationship between 36 and 35.

[00:04:27] Speaker 02:
I misspoke.

[00:04:28] Speaker 05:
If it's a matter of removing an ambiguity, resolving an ambiguity, it seems somewhat different.

[00:04:36] Speaker 05:
At least Arrington seemed to suggest that

[00:04:44] Speaker 05:
within the compass of Rule 36 was making the intent clear.

[00:04:49] Speaker 05:
Now, how you discern intent is another issue.

[00:04:54] Speaker 02:
Yes, Your Honor.

[00:04:54] Speaker 02:
I misspoke.

[00:04:55] Speaker 02:
She could modify it through a different provision, or she could have used Rule 36 as a means of vacating the decision.

[00:05:05] Speaker 02:
So you're correct.

[00:05:06] Speaker 02:
Rule 36 is not technically a modification statute.

[00:05:12] Speaker 02:
It is a correction statute, not a modification statute.

[00:05:15] Speaker 02:
I take the court's point.

[00:05:17] Speaker 05:
Right.

[00:05:17] Speaker 05:
And correcting, quote, clerical errors, which at least in Arrington we seem to view as including making the sentence correspond to the intent and how the intent is ascertained is a separate question.

[00:05:33] Speaker 02:
Right.

[00:05:34] Speaker 02:
And we think you should remand so that she can, if there are any questions about her intent, she should be the one to make that clarification first.

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We also believe that remand is required here in any event.

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The government itself concedes that the second sentence, the re-sentence that was imposed, in fact, was not the same as the first sentence.

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And so we think that you have to remand this case anyway for the judgment to be corrected.

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And when you were mandated, we believe the court should also be told that she can impose a sentence that she believes is legal under 3553 and do justice.

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As I mentioned, the second way of getting there is to – the district court erred in believing it could not either modify the sentence or correct the sentence.

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We cite a variety of factors on which correction or modification is possible.

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And the government can't have it both ways.

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We believe if they can't argue to Treasury that Ms.

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Hughes was delinquent, and at the same time argue that 3614 doesn't apply because she had not made a – failed to make any payments.

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We also submit that she had changed circumstances, and that also justifies a modification.

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But even if the court – You could trigger a resentencing by not paying, right?

[00:06:55] Speaker 02:
Your Honor, it is an odd situation where if you're complying, you don't get a potential resentence.

[00:07:01] Speaker 02:
And if you do comply, they're saying you can't.

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But we think there are a variety of ways that you can get there.

[00:07:08] Speaker 02:
But that is one of the ways.

[00:07:09] Speaker 00:
That's something you could do.

[00:07:11] Speaker 00:
Say you lost here.

[00:07:13] Speaker 00:
You could still decline to pay and under 36-14 trigger a resentencing.

[00:07:18] Speaker 00:
Is that correct?

[00:07:19] Speaker 02:
I guess so, Your Honor.

[00:07:20] Speaker 02:
It seems like an odd thing for the court

[00:07:25] Speaker 00:
require a non non-compliance in order to get relief I think there are other ways you can get there that might be well if we don't have legal authority we don't have legal authority but you would still have an option to and it's a roll of the dice because I guess it could be any sentence that could have originally been imposed which could be a longer sentence right

[00:07:46] Speaker 02:
But we hope the court won't go that route, but I take the court's point.

[00:07:51] Speaker 02:
If we end up there, we'll have to consider that.

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But hopefully there are better ways than encouraging people to not pay in order to get restitution changes based on chain circumstances.

[00:08:02] Speaker 02:
In any event, even if there is no change or modification of the original sentence, we also believe that the court could have and should have applied the default judgment as an offset that was imposed against Blackhawk.

[00:08:19] Speaker 02:
The PSR itself said that according to the government, quote, according to the government, this amount, meaning the default judgment amount of $4 million, will be used to offset any restitution owed by the defendant.

[00:08:33] Speaker 02:
Pursuant to the JNC itself, no restitution payments were even supposed to begin until after the adjustment where the fine to Blackhawk will be applied.

[00:08:44] Speaker 02:
The court said she should have paid $50 a month only if restitution is owed.

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And she admitted that she never believed that Ms.

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Hughes was going to be on the hook herself for $400 and some thousand dollars when the company was expected to pay.

[00:08:58] Speaker 02:
The judge judgment commitments order said only that the fine would be offset, not the fine recovery would be offset.

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And we submit the best reading is that the fine itself should be offset.

[00:09:10] Speaker 02:
Finally, because I'm running out of time, this court also has inherent authority to require notice before

[00:09:16] Speaker 02:
Treasury does what it did here.

[00:09:19] Speaker 02:
That notice is done in South Dakota by the U.S.

[00:09:21] Speaker 02:
Attorney's Office.

[00:09:22] Speaker 02:
You should require that it be done in this court too.

[00:09:25] Speaker 02:
How exactly the Justice Department certified the Treasury that Ms.

[00:09:28] Speaker 02:
Hughes was delinquent on January 31st of 2012?

[00:09:36] Speaker 02:
Less than 30 days after the judgment, before her first payment was even due so they could sick Treasury on her is incomprehensible.

[00:09:43] Speaker 02:
I don't know how they can truthfully have certified that to Treasury.

[00:09:46] Speaker 02:
We haven't seen their certification.

[00:09:48] Speaker 02:
I'd sure like to see it.

[00:09:49] Speaker 02:
But before her first payment was even owed, they had already sick Treasury on her by certifying she was delinquent.

[00:09:55] Speaker 02:
She was not.

[00:09:56] Speaker 02:
She was in fact paying early.

[00:09:59] Speaker 02:
And more importantly, institutionally,

[00:10:02] Speaker 02:
for those actions to be taken without a district court even knowing will undermine rehabilitation efforts.

[00:10:08] Speaker 02:
Uh, it will not misuse because she's a wonderful person, but with some people, it would only encourage them to get back into a life of crime.

[00:10:15] Speaker 02:
And a district court ought to know if Treasury is seizing funds, they're coming to people who are under their criminal orders when the only reason Treasury is going after him is the restitution order itself.

[00:10:25] Speaker 02:
I reserve.

[00:10:28] Speaker 01:
Thank you.

[00:10:44] Speaker 06:
Good morning and may it please the court, a slightly raspy Christopher Howland on behalf of the government.

[00:10:51] Speaker 06:
I want to begin by emphasizing that the government is not unsympathetic to Ms.

[00:10:55] Speaker 06:
Hughes or her circumstances.

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Likewise, the government recognizes that the sentence imposed by the district court didn't turn out as the district court intended.

[00:11:05] Speaker 05:
How do you read that sentence?

[00:11:07] Speaker 06:
The sentence by the district court?

[00:11:09] Speaker 06:
Yes.

[00:11:10] Speaker 06:
The sentence by the district court imposed that she was misused, was responsible for paying under the MVRA, the Mandatory Victims of Restitution Act, the $442,000.

[00:11:20] Speaker 06:
And how was that to be paid?

[00:11:23] Speaker 06:
It would be joint in several with Douglas Brown and then any amount recovered by Blackhawk.

[00:11:29] Speaker 05:
How was her share to be paid?

[00:11:32] Speaker 06:
her share was to be paid at a rate of no less than $50 per month.

[00:11:37] Speaker 05:
And the district court also provided... What do you understand that to mean as to possible increases?

[00:11:44] Speaker 06:
I think that the judge, the district court didn't... I would also point out that at the sentencing, the district court said that the restitution amount was immediately payable.

[00:11:54] Speaker 06:
And so it's immediately payable, but misused was required to pay at no less than $50 per month.

[00:12:00] Speaker 05:
And he's still not answering my question.

[00:12:03] Speaker 05:
What?

[00:12:04] Speaker 05:
What circumstances do you suppose the judgment contemplated or anything other than $50 a month?

[00:12:12] Speaker 06:
I'm not sure that the district court contemplated in your other circumstances, which is exactly why would you be resting on the not less than?

[00:12:19] Speaker 05:
What do you get out of the not less than?

[00:12:24] Speaker 06:
I

[00:12:26] Speaker 06:
I think that not less than is clear on its face that Ms.

[00:12:30] Speaker 06:
Hughes was responsible, as Judge Collier pointed out, or said to start at the beginning that the restitution was immediately payable, but she was required to pay at a rate of not less than $50 per month.

[00:12:41] Speaker 05:
And so I'm not sure that we... So you're saying that not less than $50 a month means that the $440,000 is immediately due in full.

[00:12:50] Speaker 05:
Is that the way you're reading it?

[00:12:52] Speaker 05:
It seems to me that there's a far more plausible reading, which is that if her financial circumstances change radically in the upward direction, the $50 a month could be increased by the court.

[00:13:09] Speaker 05:
on application by probation or something like that.

[00:13:12] Speaker 05:
I would, I think that... The media is saying that the 440,000s immediately do seems hard to justify.

[00:13:22] Speaker 06:
I'm sorry, I missed the last part of your question.

[00:13:24] Speaker 06:
Hard to justify.

[00:13:25] Speaker 06:
that reading it at no less than fifty dollars a month.

[00:13:28] Speaker 05:
No, reading it at not less than fifty dollars a month, to read that as saying that she is immediately obliged to pay the 440,000, I think it introduces a self-contradiction into the judgment that isn't there.

[00:13:43] Speaker 06:
I don't think that there's necessarily a self-contradiction.

[00:13:45] Speaker 06:
I think what the district court said was that it was immediately payable, and this was what she said at the sentencing hearing, and that controls, of course, over any ambiguity in the written... But $50 a month.

[00:13:54] Speaker 06:
She also said that a rate of not less than $50 per month.

[00:13:57] Speaker 05:
And she also said, Judge Collier, that if there was... Now, in other words, you insist that the not less than can only mean immediate obligation to pay the $440,000.

[00:14:08] Speaker 06:
That's what it's, I mean, not less than $50 per month on its face means that Ms.

[00:14:16] Speaker 06:
Hughes could be responsible for paying the full amount immediately payable.

[00:14:19] Speaker 04:
Do you reject the possibility of any other interpretation?

[00:14:22] Speaker 04:
Excuse me, I'm sorry?

[00:14:22] Speaker 04:
Do you reject the possibility of any other interpretation?

[00:14:25] Speaker 06:
I don't reject the possibility of any other interpretation, but that's not the interpretation that the district court in this proceeding indicated that it was intending to impose.

[00:14:35] Speaker 06:
So the first point is that the district court carefully reviewed the statutes, carefully reviewed the case law, and reached the conclusion that it lacked the authority to vacate the sentence as it was originally imposed.

[00:14:48] Speaker 06:
And the court certainly could have dealt with these questions at the time.

[00:14:52] Speaker 06:
But in the court's view, it didn't possess the inherent authority to modify the terms of the otherwise valid and unappealed sentence.

[00:15:02] Speaker 06:
The legal technicalities that the government is accused of relying on are actually congressionally mandated dictates about the limits on a district court's authority to modify an otherwise valid final and unappealed sentence.

[00:15:19] Speaker 03:
What's your view of the scope of Rule 36?

[00:15:23] Speaker 06:
We agree with Arrington, which is that Rule 36 is meant to correct clerical errors or clerical omissions.

[00:15:31] Speaker 06:
It's not intended to be an end run around the time limits requirements.

[00:15:38] Speaker 05:
Or has hope is ambiguous.

[00:15:44] Speaker 06:
I think, well, first of all, that this is the first time that we're hearing that argument.

[00:15:48] Speaker 06:
And so if that argument had been presented to Judge Collier, she might have had a different reaction.

[00:15:53] Speaker 06:
But that's not the argument that was presented.

[00:15:54] Speaker 06:
There wasn't an argument that there was a self-contradiction in Judge Collier's sentence.

[00:16:02] Speaker 06:
The issue that was squarely before Judge Collier was whether the NVRA applied.

[00:16:07] Speaker 06:
And so it's hard to fault the district court for not recognizing a self-contradiction when the district court itself didn't think that there was a self-contradiction.

[00:16:19] Speaker 06:
I just want to point out the limits and the exceptions under the NVRA are very specific.

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Congress clearly delineated them.

[00:16:28] Speaker 06:
We set forth in our brief how each of them are not applicable in this case.

[00:16:34] Speaker 06:
I want to address the waiver point that the court made some sort of a factual finding that Mr. McDaniel waived any issue with the court's ability to vacate the sentence.

[00:16:46] Speaker 06:
What the court actually said was, I will say that sitting here, I thought that he agreed.

[00:16:51] Speaker 06:
That's far from a waiver.

[00:16:52] Speaker 06:
And I would encourage the court to read the transcript carefully, because there was sort of a back and forth discussion about this issue.

[00:16:59] Speaker 06:
There was certainly no clear

[00:17:01] Speaker 06:
an intentional relinquishment on the part of Mr. McDaniel to give up an argument that the district court lacked the authority.

[00:17:15] Speaker 06:
Turning to the second issue, which is whether the NVRA actually applies to misuses offense, the first

[00:17:24] Speaker 06:
issue is that that argument also was weighted.

[00:17:27] Speaker 06:
Ms.

[00:17:27] Speaker 06:
Hughes could have raised any issue with the MVRA when the initial sentence was imposed.

[00:17:33] Speaker 06:
She didn't do that.

[00:17:34] Speaker 06:
Instead, Ms.

[00:17:35] Speaker 06:
Hughes waited more than a year to raise any sort of issue with the MVRA.

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This Court should not allow such an end run around the time-limit requirements of Rule 4B.

[00:17:49] Speaker 06:
Additionally, Dorsalee does not stand for the idea that an offense under 1001 can never constitute an offense against property if that conduct causes the loss.

[00:18:03] Speaker 06:
In Dorsalee, the issue there was causation.

[00:18:08] Speaker 06:
And so the false statement that Mr. Dorsalee made was not part of the conspiracy to defraud the government.

[00:18:16] Speaker 06:
The false statement that Mr. Dorsalee made was in the FBI investigation.

[00:18:20] Speaker 06:
And so the fraud had already been committed.

[00:18:24] Speaker 06:
And the false statement during the FBI's investigation didn't actually cause the loss.

[00:18:28] Speaker 06:
So Mr. Dorsalee's 1001 conviction was not, in fact, an offense against property.

[00:18:34] Speaker 06:
It didn't cause any loss at all.

[00:18:35] Speaker 06:
So Dorsalee is not on.

[00:18:37] Speaker 06:
point with this case.

[00:18:38] Speaker 01:
Is it your position that Dorsally could never be read as implicitly accepting this categorical approach?

[00:18:47] Speaker 06:
No, yes, that is our position.

[00:18:49] Speaker 06:
I don't think that Dorsley was dealing with the categorical or the modified categorical approach at all.

[00:18:54] Speaker 06:
In fact, the cases upon which Mr. Hughes relies are under the Armed Career Criminal Act, ACCA, and that's a totally different context that deals with what constitutes a violent felony.

[00:19:06] Speaker 06:
And so certainly Dorsley can't be read to have implicitly endorsed a categorical approach

[00:19:11] Speaker 06:
when that wasn't even the issue that the court was deciding.

[00:19:13] Speaker 06:
That issue hadn't been briefed whatsoever, nor had the issue, by the way, of whether the offense constituted an offense against property under the MVRA.

[00:19:23] Speaker 06:
And so we would rely on the cases from the other circuits, Peterson, Singletary, that do stand for the idea that if a false statement contributes to a loss, it can constitute an offense against property under the MVRA.

[00:19:39] Speaker 06:
Finally, just briefly because I'm running out of time also, the top seizure in this case was proper.

[00:19:45] Speaker 06:
As we point out in our brief, this is an improper forum.

[00:19:49] Speaker 06:
This court is the improper forum for Ms.

[00:19:50] Speaker 06:
Hughes to be making arguments about whether the government has the authority to seize her tax refund.

[00:19:57] Speaker 06:
She has administrative remedies that are available to her.

[00:20:00] Speaker 05:
Is there some language in the provision for administrative remedies that states that they're exclusive and a prerequisite to any judicial review?

[00:20:09] Speaker 06:
I don't know the answer to that, Your Honor.

[00:20:13] Speaker 06:
What I would say is that if Ms.

[00:20:17] Speaker 06:
Hughes were to avail herself of an administrative remedy and she were to receive an adverse decision, then certainly under different statutes, including the APA, for example, she would have an ability to petition this court and ask for this court to look at that particular decision.

[00:20:34] Speaker 06:
if it ended up being adverse.

[00:20:36] Speaker 06:
This is the thing, as far as I'm aware, Ms.

[00:20:38] Speaker 06:
Hughes could to this day still petition whichever administrative forum is the proper forum for her to be making these claims.

[00:20:46] Speaker 05:
However, unless there's something making that exclusive, it's not clear why she should do so or why she has to do so.

[00:20:53] Speaker 06:
And I'm sorry, I just don't know the answer to that question.

[00:20:56] Speaker 06:
But again, that's not an argument.

[00:20:57] Speaker 05:
I mean, when you rely very heavily and persistently on exhaustion, it seems suitable that you would point to something making exhaustion mandatory.

[00:21:09] Speaker 06:
Your Honor, I would – I don't know the answer to that question.

[00:21:14] Speaker 00:
But it's not really exhaustion, is it?

[00:21:17] Speaker 00:
You're just arguing this is not the right forum.

[00:21:20] Speaker 06:
That's right, Your Honor.

[00:21:21] Speaker 00:
I'm not sure if it's a categorically different – I mean, you're not saying you can come back here in this kind of proceeding, are you?

[00:21:32] Speaker 05:
uh... in the district court correct right that's i think that's right yes she could petition uh... not exhausting before you go back to the district court it's it's a separate mechanism procedural mechanism that's probably a better way to put it yes your honor thank you uh... for clarifying for me and i would say in your brief at page forty seven you're prepared to present evidence of hearing on remand of how it received a notice of intent to offset

[00:22:02] Speaker 05:
Since the furnishing of proper notice would seem to be a prerequisite to the exercise of any exhaustion requirement, if there were an exhaustion requirement, you might share that with us.

[00:22:18] Speaker 06:
Absolutely, Your Honor.

[00:22:20] Speaker 06:
In Ms.

[00:22:23] Speaker 06:
Hughes' reply brief, she submitted what we would consider to be the notice that she was due in this case, which is, as part of the reply brief, it was a notice of intent to offset.

[00:22:34] Speaker 06:
And I believe it's in the record.

[00:22:36] Speaker 06:
I think it was attached as an exhibit to Ms.

[00:22:39] Speaker 06:
Hughes' reply brief.

[00:22:40] Speaker 06:
But it's called the TOPS notice, so that's how I think of it.

[00:22:47] Speaker 06:
the specific mechanisms.

[00:22:50] Speaker 06:
So, for example, I'm just quoting, to avoid referral of your debt to the treasury offset program within 60 calendar days from the date of this notice, you must one, pay your debt in full, two, enter into a repayment agreement.

[00:23:02] Speaker 06:
And that would be a repayment agreement with whichever certifying agency was the certifying agency.

[00:23:07] Speaker 06:
In this case, it would be justice.

[00:23:09] Speaker 06:
or three present evidence that all are part of the criminal or the civil judgment debt is not passed to or that the judgment has not been stayed or satisfied.

[00:23:17] Speaker 06:
In other words, there are there are mechanisms that were that are in place that misuse could have followed and that could have avoided this entire proceeding.

[00:23:26] Speaker 06:
Those mechanisms weren't followed.

[00:23:27] Speaker 06:
And so it's, um, you know,

[00:23:31] Speaker 00:
I would, for these reasons, I would respectfully, uh, do you agree that, uh, if you prevail in this case, 36-14 allows the defendant to fail to pay the restitution and to get a resentencing?

[00:23:45] Speaker 06:
Yes, your honor, but with one caveat, and the caveat is that the district court on resentencing may impose any sentence that may have originally been imposed.

[00:23:54] Speaker 06:
So it could go up or down?

[00:23:56] Speaker 06:
So it could go up or down.

[00:23:58] Speaker 06:
What were you going to say?

[00:24:01] Speaker 00:
I interrupted you, though.

[00:24:02] Speaker 00:
What were you going to say?

[00:24:03] Speaker 00:
You were going to say something else.

[00:24:05] Speaker 06:
Well, I was going to say that

[00:24:09] Speaker 06:
And I haven't thought about that specific question, but I think that 3614 does provide sort of perverse.

[00:24:15] Speaker 00:
Very odd, very odd provision, but I just want to make sure I'm reading it the right way.

[00:24:21] Speaker 06:
Yes, sir.

[00:24:22] Speaker 06:
I was just looking at that a moment ago, and I think what the provision says is that.

[00:24:29] Speaker 06:
If there is a resentencing, the district court is allowed to resentense misuse to any sentence which may have originally been imposed.

[00:24:40] Speaker 06:
But again, I would point out that these are arguments that could have been made in the first instance.

[00:24:47] Speaker 00:
If there was an argument that misuse- I'm just saying going forward, that could happen, right?

[00:24:53] Speaker 06:
Well, we submit that any argument about the NVRA is waived.

[00:24:56] Speaker 06:
And we also submit that the district court lacks the authority.

[00:25:03] Speaker 06:
Under 36-14, again, I don't know.

[00:25:08] Speaker 06:
I think that those are issues that could be briefed.

[00:25:11] Speaker 00:
The implication of the provision is that you could impose a new, higher sentence for failure to pay restitution.

[00:25:18] Speaker 00:
But the phrasing of the provision

[00:25:20] Speaker 00:
suggests that you could impose any sentence, including a much lower sentence.

[00:25:25] Speaker 06:
Right.

[00:25:26] Speaker 06:
One that may have originally been imposed under one of the provisions that provides for allocation.

[00:25:31] Speaker 05:
Government counsel at the initial sentencing accepted these day the idea of a $200,000 restitution.

[00:25:41] Speaker 06:
Yes, your honor, but the district court found based on the PSA or PSR report that the actual amount of the losses was 442,000.

[00:25:50] Speaker 06:
And as the court said, the losses, you know, it is what it is.

[00:25:54] Speaker 06:
And so it the argument that the lost wasn't ascertainable by the district court is flatly contradicted by the record.

[00:26:03] Speaker 01:
Well, the top seizure doesn't seem to be

[00:26:07] Speaker 01:
particularly related to the sentence that the district court gave here.

[00:26:12] Speaker 01:
So my question is, even if 3614 would allow for re-sentencing, would it have any effect on what the government has already seized?

[00:26:26] Speaker 06:
Would it have any effect on the amount that the government has already seized?

[00:26:30] Speaker 06:
And that, again, I just don't know the answer to those very technical questions.

[00:26:35] Speaker 06:
There are people in the Department of Treasury, probably people in the Financial Litigation Unit of the U.S.

[00:26:40] Speaker 06:
Attorney's Office who could answer that specific question.

[00:26:42] Speaker 06:
But those are issues, again, that can be briefed.

[00:26:45] Speaker 06:
If there is a remand, if the court is inclined to remand, those issues can be briefed and fully fleshed out.

[00:26:50] Speaker 06:
Those were not the issues that were squarely before the district court.

[00:26:53] Speaker 06:
And so it's difficult to fault the district court for not answering these questions or not asking for additional briefing when those weren't the questions and those weren't the specific statutory provisions that Ms.

[00:27:04] Speaker 06:
Hughes relied on below.

[00:27:06] Speaker 00:
So I think that, to follow up on Judge Brown's question, I think you said you don't know the answer.

[00:27:11] Speaker 00:
But I want to play this out.

[00:27:13] Speaker 00:
If the resentencing, if they didn't pay, there's a resentencing, and the district court in the resentencing imposes zero restitution, could she then file for a tax refund to get the money, or a refund of some kind, to get the money back that was already seized?

[00:27:27] Speaker 00:
And I think you're saying you don't know the answer to that, which I understand why you wouldn't know the answer to that.

[00:27:32] Speaker 06:
Yes, Your Honor.

[00:27:32] Speaker 06:
I will say that, um,

[00:27:34] Speaker 06:
You know, people file civil lawsuits against the government all the time.

[00:27:39] Speaker 06:
And as we point out in our brief, in this case even, Ms.

[00:27:43] Speaker 06:
Hughes could have filed a civil lawsuit arguing that the seizure of the TOP refund was not done in accordance with the appropriate regulations.

[00:27:54] Speaker 06:
And we submit that that was the proper mechanism.

[00:27:57] Speaker 00:
You think she'd lose that suit though, right?

[00:28:01] Speaker 00:
I mean, you're throwing out an option of losing in a different form.

[00:28:05] Speaker 06:
Under the terms of the district court sentence, as it stands, I think that the government would have strong arguments on appeal that the seizure of the top seizure was appropriate.

[00:28:18] Speaker 06:
I mean, and again, I just want to point out that the top program is not

[00:28:23] Speaker 06:
a function of the government.

[00:28:25] Speaker 06:
It's a function of Congress.

[00:28:27] Speaker 06:
Congress has specifically mandated that for... But it's for past due debts.

[00:28:32] Speaker 05:
That's the issue that troubles me.

[00:28:35] Speaker 05:
What's past due?

[00:28:37] Speaker 06:
Well, according to the district court at the sentencing hearing, the restitution was immediately payable.

[00:28:43] Speaker 06:
And so under the government's view, the... Isn't that ambiguous?

[00:28:47] Speaker 05:
If the $50 a month is immediately payable, that's then immediately payable to that extent.

[00:28:54] Speaker 06:
Well, as we point out in our brief, there's a host of federal authority that suggests that simply because a court orders a payment schedule, that's not the only means that the government has to obtain debts that it is owed under a valid and final and... So you're assuming reclusion.

[00:29:16] Speaker 05:
Because if the debt is to be paid $50 a month, then that's the debt, right?

[00:29:26] Speaker 05:
You've changed the debt to the principal amount, which is different.

[00:29:33] Speaker 05:
At least in terms of debt or credit or relations.

[00:29:37] Speaker 06:
The restitution obligation is for the $442,000.

[00:29:39] Speaker 06:
And that's, excuse me, in the government's position.

[00:29:42] Speaker 05:
It's also $50 a month.

[00:29:43] Speaker 05:
What's that?

[00:29:44] Speaker 05:
It's also $50 a month.

[00:29:46] Speaker 06:
Well, that is the court's payment schedule.

[00:29:49] Speaker 06:
But again, as we point out in our brief, just because a court imposes a payment schedule, that's sort of the floor.

[00:29:56] Speaker 06:
That's not the only means that the government has at its disposal.

[00:30:00] Speaker 06:
That's not the only tool in the toolbox that the government has to recover these kinds of restitution obligations.

[00:30:06] Speaker 06:
Certainly, if there were a major corporation and the court imposed some sort of de minimis payment schedule, the government would be

[00:30:16] Speaker 06:
You know, seeking to recover whatever judgment in that case, and this is, I'm posing a hypothetical, so I, and I should probably refrain from doing that, but.

[00:30:31] Speaker 05:
Your Honor.

[00:30:36] Speaker 06:
Well, I think that if Your Honor is suggesting something along the lines of the, I believe it's the South District, South Dakota District Court case, Buolke, B-U-E-L-K-E, the U.S.

[00:30:48] Speaker 06:
Attorney's Office, the government in that case,

[00:30:52] Speaker 06:
went through that process, but there's nothing mandatory.

[00:30:55] Speaker 06:
There's nothing that requires the government to go through the district court to ask permission in effect to try and recover on debts that a district court has imposed that a district court has sentenced a

[00:31:13] Speaker 01:
I just want to ask, what's wrong with that process?

[00:31:16] Speaker 01:
That seemed like a very reasonable way to approach it, because it would have clarified then what the district court saw as the debt.

[00:31:26] Speaker 01:
In other words, by not doing that, the government is able to simply assume that what she meant was the whole debt.

[00:31:37] Speaker 06:
You know, maybe that process is one that every district court and every branch of the government should abide by in every case.

[00:31:45] Speaker 06:
If this court is, you know, sort of going to make such a pronouncement, you know, maybe that will change, you know, the entire procedures for enforcing

[00:31:58] Speaker 06:
restitution obligations under the top throughout the country.

[00:32:01] Speaker 06:
I don't think that a circuit court has ever held such a broad ranging requirement.

[00:32:06] Speaker 01:
Well, we're not talking about the enforcement of all, but we are talking about what happens when the basis of the seizure is something that a court has done.

[00:32:20] Speaker 01:
In other words, this was a criminal restitution act.

[00:32:26] Speaker 01:
action here.

[00:32:27] Speaker 01:
So it's much more limited than every possible way that the government might seize assets.

[00:32:37] Speaker 06:
I'm not sure I'm understanding your Honor's question.

[00:32:39] Speaker 01:
Well, I feel like that the debt here is a function of what a court in a criminal case did.

[00:32:52] Speaker 06:
That's absolutely correct, your honor.

[00:32:53] Speaker 06:
But we submit that the district court's sentence was absolutely clear about what the sentence was, what the amount of the restitution was.

[00:33:02] Speaker 06:
And so it's unfortunate that black that the government wasn't able to recover from have been clear to her when she looked at it again.

[00:33:11] Speaker 01:
She said that was clearly not what I intended.

[00:33:14] Speaker 06:
Well, I think what she said was she didn't intend for Ms.

[00:33:19] Speaker 06:
Hughes to be clearly saddled with the entire amount of the debt because the assumption was that the government would recover

[00:33:29] Speaker 06:
you know, some amount of money from Blackhawk that, as it turns out, didn't happen in this case.

[00:33:34] Speaker 06:
And so the question before this court is whether the district court had the authority to modify what was an unambiguous sentence, a final, valid, unappealed sentence.

[00:33:47] Speaker 01:
But if she had wanted that, why wouldn't she have made her jointly and severally liable with Blackhawk?

[00:33:53] Speaker 01:
That would have been clear.

[00:33:56] Speaker 01:
She was only jointly and severally liable with Brown, who was for all intents and purposes judgment proof, and she set the payment at, you know, at least $50, which doesn't, you know, I mean there were different ways for her to do it, so why is that unambiguous?

[00:34:14] Speaker 06:
I think that that's your honor's question makes my point, which is there were different ways that she could have structured this sentence.

[00:34:21] Speaker 06:
And the structure of the sentence is the problem with the sentence itself.

[00:34:26] Speaker 06:
If the district court in the first instance wanted to say to apportion liability, 10,000 for Mr. Brown, 10,000 for Ms.

[00:34:36] Speaker 06:
Hughes, and the rest for Blackhawk.

[00:34:37] Speaker 06:
And if the government can recover it, great.

[00:34:39] Speaker 06:
And if they can't, that's the government's issue.

[00:34:42] Speaker 06:
But that's not the way.

[00:34:43] Speaker 06:
excuse me, that the district court structured this sentence in this case.

[00:34:47] Speaker 06:
And so, you know, where we could have been a year ago is not where we are today.

[00:34:54] Speaker 06:
And so the government would submit, I mean, the district court reviewed all of this.

[00:34:57] Speaker 01:
Well, let me just say, it's kind of a strange way to interpret what happened in this case when you started off by saying the government is not unsympathetic.

[00:35:08] Speaker 06:
If there are no further questions, I would respectfully request that the court affirm the judgment of the district court in this case.

[00:35:18] Speaker 06:
Thank you.

[00:35:19] Speaker 01:
Thank you, Mr. Howard.

[00:35:22] Speaker 01:
Mr. Smith had no time remaining.

[00:35:26] Speaker 01:
The court will allow you two minutes for rebuttal.

[00:35:30] Speaker 02:
Thank you, Your Honor.

[00:35:32] Speaker 05:
You can say, have you filed some sort of protective action in either district court or the court of plans?

[00:35:42] Speaker 02:
I know, Your Honor, my client is indigent.

[00:35:46] Speaker 02:
I'm appointed only for purposes of this Court.

[00:35:49] Speaker 02:
You know, they talked about her filing a lawsuit.

[00:35:51] Speaker 02:
I mean, she's fighting to save her home.

[00:35:54] Speaker 02:
She can't afford a lawyer.

[00:35:56] Speaker 02:
Let's be real.

[00:35:58] Speaker 02:
You know, the 60-day notice came only to her, the one the government was referring to, not to me.

[00:36:04] Speaker 02:
Had I known, I wouldn't have gotten out of the case.

[00:36:07] Speaker 02:
If I'd known that T.O.P.

[00:36:08] Speaker 02:
was going to be seizing her assets, I probably would have stayed in the case.

[00:36:12] Speaker 02:
But I didn't know.

[00:36:13] Speaker 02:
I notified the government that I was out.

[00:36:15] Speaker 02:
But as I did, I told them.

[00:36:17] Speaker 02:
This money is not yet due.

[00:36:19] Speaker 02:
Justice was told that specifically, and yet they proceeded with the seizure anyway.

[00:36:24] Speaker 02:
We still don't have the answer.

[00:36:26] Speaker 02:
How did Justice certify, less than 30 days after the sentence, that she was delinquent in order to seek TOP on her?

[00:36:35] Speaker 02:
I don't know.

[00:36:36] Speaker 02:
But I can tell you this.

[00:36:37] Speaker 00:
Well, the theory is the whole thing's due on day one.

[00:36:40] Speaker 02:
Well, I understand that's their theory.

[00:36:42] Speaker 02:
But TOP,

[00:36:43] Speaker 02:
procedures require a certification of delinquency, and she was not delinquent as of January 31st of 2012.

[00:36:51] Speaker 02:
And I can tell you this for what it's worth.

[00:36:54] Speaker 02:
And this uses one of my, I've been doing this 30 years, point of personal privilege.

[00:37:01] Speaker 02:
She is one of my top three favorite clients of all time.

[00:37:05] Speaker 02:
She is one of the sweetest, nicest people.

[00:37:07] Speaker 02:
If there is a heaven, she is going to it.

[00:37:11] Speaker 02:
And for this to be particularly happening to her,

[00:37:14] Speaker 02:
I mean, just look at the character letters.

[00:37:16] Speaker 02:
And there was a lot more that could have been said at the sentencing hearing.

[00:37:20] Speaker 02:
She is a genuinely, truly nice person.

[00:37:23] Speaker 02:
And for them to now be saying that she may even be subject to Social Security withdrawals because of this judgment is outrageous.

[00:37:31] Speaker 02:
I appreciate the court's time and attention.

[00:37:33] Speaker 02:
And I hope that this court will remand this case so that justice can be done.

[00:37:36] Speaker 01:
Thank you.

[00:37:39] Speaker 01:
Thank you, Mr. Chair.

[00:37:40] Speaker 01:
The case will be submitted.