7th circuit: the southern district must recalculate the refund in case of false credit card


The U.S. District Court for the Southern District of Indiana will have to recalculate the restitution owed by an Indiana woman who was convicted of stealing thousands of dollars by creating fake credit cards after the 7the The Circuit Court of Appeal overturned his removal order for the second time.

In 2015, according to court documents, Ana Alverez – along with two other participants, Victor Verejano-Contreras and Guillermo Bacallao-Fernandez – created 647 fake credit cards and made $ 52,631.15 in fraudulent purchases.

Verejano-Contreras fled and is currently on the run. Bacallao ‐ Fernandez pleaded guilty in 2018 to one count of prison abuse and was sentenced to 12 months probation and $ 1,000 in restitution; restitution was imposed jointly and severally with his co-defendants.

Alverez pleaded not guilty and was tried in March 2019. The jury found her guilty on all counts: three counts of access device fraud and 10 counts of aggravated identity theft .

In August 2019, the district court held a hearing and Alverez was sentenced to 60 months in prison. The Southern Indiana District also ordered Alverez to pay more than $ 50,000 in restitution.

However, inconsistencies in various sentencing files regarding the amount of restitution, as well as the number of victim recipients, created confusion regarding the order.

During the sentencing hearing, the district court orally imposed $ 52,562.15 in restitution payable to three financial institutions of the victims according to the “proportions … set out in the face-to-face report. [(“PSR”)]”, But the PSR left the proportions” TBD “. The written judgment ordered the restitution of $ 52,561,151 to five financial institutions and described how the total amount of the loss should be divided.

The judgment further specified that Alverez was jointly responsible for the restitution with his co-accused, Bacallao-Fernandez. He also established a payment plan, providing that “[a]any unpaid restitution balance during the period of supervision must be paid at a rate of at least 10% of the defendant’s gross monthly income.

Alverez appealed, arguing that the restitution order was illegal for several reasons, mainly due to the discrepancies between the ISP, the oral conviction and the judgment rendered.

Instead of responding to Alverez’s brief, the government tabled a hoist motion. It is agreed that 7e Circuit is expected to set aside the judgment and remand to allow the district court to correct the restitution order, and the motion has been granted to set aside the judgment and remand for further proceedings.

While in pre-trial detention, the government sought an order requiring Alverez to pay $ 16,652.90 in restitution, even though it maintained that evidence at trial established actual losses of at least $ 52,631.15 for five banks . In light of the order, the government did not seek compensation from the two institutions not mentioned during the sentencing hearing.

The government also credited Alverez with the $ 34,141.23 that was confiscated from the Carmel Police Department after his arrest in 2015, as well as the $ 1,000 in restitution his co-accused Bacallao-Fernandez was ordered to pay.

In response, Alverez argued that any restitution order would be inappropriate, but “[w]without giving up [that] argument ”, she agreed that the credits the government applied to the refund amount were correct. Alverez further argued that the obligation of restitution should be joint and several for the three defendants or, alternatively, the court should distribute restitution among the three defendants after a hearing in which a determination of their relative culpability and the ability of each defendant to pay may be the subject of litigation.

Additionally, Alverez observed that she was found destitute when she was charged. A designated lawyer represented her throughout these criminal proceedings.

Thus, Alverez requested “a hearing … to determine how and when payments are to be made” and his “ability to pay as required by 18 USC § 3664 (f) (3) (B)”. She said she would use the requested hearing to establish that “on the basis of her economic situation,[] and projected, and her medical incapacities, she should be ordered to pay only a nominal and periodic amount [toward any restitution entered] as provided by 18 USC § 3664 (f) (3) (B). ”

In response, the government argued that the distribution of restitution was not appropriate and that Alverez’s indigence should not “reduce a restitution order to a ‘nominal periodic amount.’ “

The district court did not hold a hearing as Alverez had requested. Instead, four days after the government filed its response brief, the court issued its amended restitution order. He concluded that the defendant was not entitled to a reduction for indigence and he accepted the government’s claim for restitution in the amount of $ 16,652.90.

Then the court ordered Alverez to pay restitution to the three original victims up to the amounts requested by the government. However, the ordinance did not set a payment schedule and was silent on joint and several liability.

In the second appeal, Alverez argued that the district court made three errors: first, when it changed course from the first restitution order and made Alverez solely responsible for the restitution, instead of to be jointly and severally liable with his co-defendants; second, when it has not established a schedule for Alverez’s restitution payments in accordance with 18 USC § 3664 (f) (2); and third, when he did not hold another restitution sentencing hearing, which Alverez said was required by due process clause or 18 USC § 3553 (c).

The government agreed that a referral is appropriate with respect to the first and second questions, but disagreed with the third.

“The district court made a procedural error when it failed to consider Alverez’s argument for joint and several liability and failed to explain why sole liability – a heavier penalty – was appropriate afterwards. pre-trial detention ”, 7e Senior Circuit Judge Joel Flaum wrote for the court.

Flaum also noted that the government has not challenged Alverez’s indigence and has not challenged the need for a payment schedule in this case. While in pre-trial detention, the district court was instructed to examine “Alverez’s arguments concerning his abilities”.

On the last point, the court of appeal held that since the second restitution order was set aside on the first two points, it did not need to rule on the necessary procedures before its entry.

“However, as stated above, the district court is not precluded from exercising its discretion to hold another remand sentencing hearing,” Flaum wrote, citing United States v. Harris, 813 F. App’x 710, 713–14 (2d Cir. 2020) and United States v. Robl, 8 F.4th 515, 528–29 (7th Cir. 2021).

The case is United States of America v. Ana Alverez, 21-1119.

About Shirley L. Kreger

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