                                                                                                                           Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


2-15-2006

USA v. Leahy
Precedential or Non-Precedential: Precedential

Docket No. 03-4490




Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006

Recommended Citation
"USA v. Leahy" (2006). 2006 Decisions. Paper 1503.
http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1503


This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2006 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
                                   PRECEDENTIAL

  UNITED STATES COURT OF APPEALS
       FOR THE THIRD CIRCUIT


Nos. 03-4490/03-4184/03-4542/03-4560/04-2912


                 No. 03-4490

      UNITED STATES OF AMERICA,

                      v.

              PAUL J. LEAHY,

                  Appellant

On Appeal from the United States District Court
   for the Eastern District of Pennsylvania

               District Judge:
          Honorable J. Curtis Joyner
          (D.C. No. 01-cr-00260-2)


                 No. 03-4184

      UNITED STATES OF AMERICA,

                      v.

            JAMES C. FALLON,

                  Appellant

On Appeal from the United States District Court
   for the Eastern District of Pennsylvania

              District Judge:
          Honorable James T. Giles
          (D.C. No. 02-cr-00324)
                 No. 03-4542

      UNITED STATES OF AMERICA,

                      v.

             TIMOTHY SMITH,

                  Appellant

On Appeal from the United States District Court
   for the Eastern District of Pennsylvania

               District Judge:
          Honorable J. Curtis Joyner
          (D.C. No. 01-cr-00260-1)


                 No. 03-4560

      UNITED STATES OF AMERICA,

                      v.

          DANTONE, INC.,
T/A CARRIAGE TRADE AUTO AUCTION,

                  Appellant

On Appeal from the United States District Court
   for the Eastern District of Pennsylvania

               District Judge:
          Honorable J. Curtis Joyner
          (D.C. No. 01-cr-00260-3)


                 No. 04-2912


                      2
                 UNITED STATES OF AMERICA,

                                 v.

                       KENNARD GREGG,

                             Appellant


           On Appeal from the United States District Court
              for the Eastern District of Pennsylvania

                          District Judge:
                     Honorable John R. Padova
                      (D.C. No. 04-cr-00103)



               Argued: November 1, 2005
Before: SCIRICA, Chief Judge, SLOVITER, ALITO*, ROTH,
MCKEE, RENDELL, BARRY, AMBRO, FUENTES, SMITH,
 FISHER, VAN ANTWERPEN, ROSENN** and BECKER
                     Circuit Judges.

                     (Filed February 15, 2006)


IAN M. COMISKY (Argued)
JORDANA COOPER
MATTHEW D. LEE
Blank Rome LLP
130 North 18th Street


       *
       Then Judge, now Justice, Alito was on the panel for this
case but was elevated to the United States Supreme Court on
January 30, 2006. This opinion is filed by quorum of the panel. 28
U.S.C. § 46(d).
       **
       Judge Rosenn heard oral argument on this case, but passed
away on February 7, 2006.

                                 3
One Logan Square
Philadelphia, PA 19103

ROBERT E. WELSH, JR.
Welsh & Recker
2000 Market Street
Suite 2903
Philadelphia, PA 19103

JEFFREY M. MILLER
Nasuti & Miller
150 South Independence Mall West
Suite 1064
Philadelphia, PA 19106

ATTORNEYS FOR APPELLANTS PAUL J. LEAHY,
TIMOTHY SMITH AND DANTONE INC.

ROBERT EPSTEIN (Argued)
DAVID MCCOLGIN (Argued)
ELAINE DeMASSE
MAUREEN KEARNEY ROWLEY
Defender Association of Philadelphia
Federal Court Division
601 Walnut Street
Suite 540 West - The Curtis Center
Independence Square West
Philadelphia, PA 19106

ATTORNEYS FOR APPELLANTS JAMES C. FALLON AND
KENNARD GREGG

PATRICK L. MEEHAN
LAURIE MAGID
MARY E. CROWLEY
JOSEPH G. POLUKA
ROBERT A. ZAUZMER (Argued)
Office of the United States Attorney
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106


                               4
DAVID FARNHAM
United States Department of Justice
P.O. Box 386
Washington DC 20044

JOSHUA L. DRATEL
Law Offices of Joshua L. Dratel
14 Wall Street, 28th Floor
New York, NY 10005

ATTORNEY FOR AMICUS CURIAE PARTY NATIONAL
ASSOCIATION OF CRIMINAL DEFENSE LAWYERS



                   OPINION OF THE COURT


FUENTES, Circuit Judge.

        We ordered rehearing en banc in three separate appeals to
determine whether the District Courts’ orders of restitution and
forfeiture violated defendants’ Sixth Amendment right to trial by
jury.
                         I. Background
         In United States v. Paul J. Leahy, No. 03-4490, following
trial, a jury found defendant Dantone, Inc. (“Dantone”), and its two
senior managers, defendants Paul Leahy and Timothy Smith, guilty
of engaging in, and aiding and abetting, bank fraud in violation of
18 U.S.C. § 1344.1 Defendants’ convictions stemmed from their
defrauding various banks out of profits derived from Dantone’s
auctioning of 311 repossessed and after-lease cars on behalf of the
banks. At sentencing, the District Court imposed prison sentences
upon Leahy and Smith and entered orders of forfeiture in the sum
of $418,657 and restitution in the sum of $408,970, jointly and


       1
        This case was tried together with United States v. Dantone,
Inc., No. 03-4560, and United States v. Timothy Smith, No. 03-
4542.

                                 5
severally, against all three defendants. Dantone, Leahy and Smith
appeal both their convictions and the orders of forfeiture and
restitution.2
        In United States v. Kennard Gregg, No. 04-2912, after being
arrested and charged for twice attempting to sell counterfeit money
to a government informant, defendant Gregg pled guilty to two
counts of dealing in counterfeit obligations in violation of 18
U.S.C. § 473. Gregg was sentenced to six months in prison and
three years of supervised release, and ordered to pay restitution to
the federal government in the amount of $350. He appeals only the
restitution order.
       In United States v. James C. Fallon, No. 03-4184, a jury
convicted defendant Fallon of one count of wire fraud in violation
of 18 U.S.C. § 1341, and three counts of mail fraud in violation of
18 U.S.C. § 1343 in connection with marketing his company’s
Derma Peel skin treatment without FDA approval. Fallon was
sentenced to 12 months in prison and ordered to pay restitution in
the amount of $55,235. Fallon appeals both his conviction and the
District Court’s restitution order.
        In these appeals, all five of the defendants – Dantone,
Leahy, Smith, Gregg and Fallon – challenge their respective
restitution orders on Sixth Amendment grounds, arguing that, in
accordance with United States v. Booker, 125 S. Ct. 738 (2005),
the facts underlying the orders should have been submitted to a jury
and established by proof beyond a reasonable doubt. Additionally,
on the same grounds, Dantone, Leahy and Smith challenge their
orders of forfeiture. We called for rehearing en banc to consider
three sentencing issues:
       1.     Whether the decision of the Supreme Court in
              Booker applies to forefeiture;
       2.     Whether orders of restitution are a criminal penalty;
       3.     Whether Booker applies to orders of restitution
              under the Victim and Witness Protection Act (the



       2
        Defendants’ appeal of their criminal convictions in this
case, as well as in United States v. Fallon, infra, will be addressed
in separate opinions.

                                 6
              “VWPA”)3 and the Mandatory Victims Restitution
              Act (the “MVRA”).4


       3
        The VWPA reads in pertinent part:

              (a)(1)(A) The court, when sentencing a defendant
              convicted of an offense under this title . . . , other
              than an offense described in section 3363A(c), may
              order, in addition to or, in the case of a
              misdemeanor, in lieu of any other penalty authorized
              by law, that the defendant make restitution to any
              victim of such offense . . . .
              (a)(1)(B)(i) The court, in determining whether to
              order restitution under this section, shall consider–
                     (I) the amount of the loss sustained by each
              victim as a result of the offense; and
                     (II) the financial resources of the defendant,
              the financial needs and earning ability of the
              defendant and the defendant’s dependents, and such
              other factors as the court deems appropriate.
              (a)(1)(B)(ii) To the extent that the court determines
              that the complication and prolongation of the
              sentencing process resulting from the fashioning of
              an order of restitution under this section outweighs
              the need to provide restitution to any victims, the
              court may decline to make such an order.

18 U.S.C. § 3663.
       4
        Passed by Congress in 1996, the MVRA augmented and
partially superseded the VWPA by requiring district courts to
impose restitution on defendants convicted of certain offenses
without regard to their ability to pay. See 18 U.S.C. § 3663A(a)(1)
(“[T]he court shall order, in addition to, or in the case of a
misdemeanor, in addition to or in lieu of, any other penalty
authorized by law, that the defendant make restitution to the victim
of the offense . . . .) (emphasis added). Both the VWPA and the
MVRA are enforced via 18 U.S.C. § 3664, which states in
pertinent part:


                                 7
       Because, in our view, restitution under the VWPA and the
MVRA is not the type of criminal punishment that evokes Sixth
Amendment protection under Booker, we conclude that the amount
a defendant must restore to his or her victim need not be admitted
by the defendant or proved to a jury beyond a reasonable doubt.
As to forfeiture, based upon the Supreme Court’s decision in
Libretti v. United States, 516 U.S. 29 (1995), we conclude that the
amount a defendant must forfeit also need not be admitted or
proved to a jury beyond a reasonable doubt.
                    II. Forfeiture and Booker
        We consider first the constitutionality of the District Court’s
forfeiture order in Leahy. Following trial, the District Court
entered an order of forfeiture in the sum of $418,657, finding that
the Government had proven by a preponderance of the evidence
that this sum constituted the defendants’ “proceeds” from their
fraudulent activity within the meaning of 18 U.S.C. § 982(a)(2).5
The Leahy defendants contend that the imposition of forfeiture by
the District Court under a preponderance of the evidence standard
violated their Sixth Amendment right in light of the Supreme
Court’s decisions in Blakely v. Washington, 542 U.S. 296 (2004),


               In each order of restitution, the court shall order
               restitution to each victim in the full amount of each
               victim’s losses as determined by the court and
               without consideration of the economic circumstances
               of the defendant.

18 U.S.C. § 3664(f)(1)(A).
       5
        18 U.S.C. § 982(a)(2) states in pertinent part:

               The court, in imposing sentence on a person
               convicted of a violation of, or a conspiracy to
               violate –
                       (A) section . . . 1344 of this title, affecting a
                       financial institution . . . .
               shall order that the person forfeit to the United States
               any property constituting, or derived from, proceeds
               the person obtained directly or indirectly, as the
               result of such violation.

                                   8
and Booker.
        The Leahy defendants’ Sixth Amendment argument with
respect to forfeiture cannot be reconciled with the Supreme Court’s
decision in Libretti. In that case, the defendant entered a guilty
plea in the middle of trial and agreed in his plea agreement to
forfeit considerable property. Libretti, 516 U.S. at 33-34. He
subsequently argued that his forfeiture plea colloquy was
inadequate, in part because the District Court did not explain the
right to a jury determination regarding forfeiture and in part
because the District Court failed to obtain his express waiver of
that right. Id. at 37-38. The Supreme Court acknowledged that,
pursuant to what was then Federal Rule of Criminal Procedure
31(e), a special jury verdict was required to permit an order of
forfeiture.6 Id. at 48-49. It nonetheless concluded that there was
no Sixth Amendment right to a jury determination, rejecting the
defendant’s claim that an express description and waiver of the jury
right was a necessary component of the plea proceeding:
               Without disparaging the importance of the right
               provided by Rule 31(e), our analysis of the nature of
               criminal forfeiture as an aspect of sentencing
               compels the conclusion that the right to a jury verdict
               on forfeitability does not fall within the Sixth
               Amendment’s constitutional protection. Our cases
               have made abundantly clear that a defendant does
               not enjoy a constitutional right to a jury
               determination as to the appropriate sentence to be
               imposed.
Id. at 49. Libretti thus flatly holds that the Sixth Amendment is not
implicated in the forfeiture context. See id. at 40-41 (rejecting
defendant’s argument that forfeiture “is not ‘simply’ an aspect of
sentencing, but is, in essence, a hybrid that shares elements of both


       6
        Former Rule 31(e) stated: “[I]f the indictment or the
information alleges that an interest or property is subject to
criminal forfeiture, a special verdict shall be returned as to the
extent of the interest or property subject to forfeiture, if any.” Rule
31(e) and other procedural rules governing the forfeiture of assets
in a criminal case were consolidated into a new Rule 32.2
governing “Criminal Forfeiture.”

                                  9
a substantive charge and a punishment imposed for criminal
activity”).
       The Leahy defendants contend that Libretti has been
undercut by Blakely and Booker to such an extent that its
precedential value has been eroded. Even assuming that to be true,
we nonetheless note that as a Court of Appeals, we are not free to
ignore the Supreme Court’s holding in Libretti, nor do we possess
the authority to declare that the Supreme Court has implicitly
overruled one of its own decisions. See United States v. Ordaz,
398 F.3d 236, 241 (3d Cir. 2005) (“[I]f a precedent of [the Supreme
Court] has direct application in a case, yet appears to rest on
reasons rejected in some other line of decisions, the Court of
Appeals should follow the case which directly controls, leaving to
[the Supreme] Court the prerogative of overruling its own
decisions.”) (quoting Rodriguez de Quijas v. Shearson/American
Express, Inc., 490 U.S. 477, 484 (1989)).
        Defendants argue in the alternative that Libretti should be
distinguished on the grounds that it addressed only the question of
whether there exists a Sixth Amendment jury right to forfeiture
determinations, not the constitutionally-mandated burden of proof,
which they contend must be “beyond a reasonable doubt” after
Booker. While there may be some tension between Booker and
Libretti to the extent that the Libretti Court cites with approval its
earlier statement in McMillan v. Pennsylvania that “[t]here is no
Sixth Amendment right to jury sentencing, even where the sentence
turns on specific findings of fact,” we are not dissuaded from our
conclusion that Libretti controls the forfeiture issue here. 516 U.S.
at 49 (quoting McMillan, 477 U.S. 79, 93 (1986)).
        We further observe that the other Courts of Appeals that
have considered this issue have reached the same conclusion. See
United States v. Fruchter, 411 F.3d 377, 382-83 (2d Cir. 2005)
(rejecting arguments that Sixth Amendment applies to forfeiture
and that Booker and Blakely require proof beyond reasonable
doubt in forfeiture determinations; further holding that “Libretti
remains the determinative decision”), cert. denied sub nom. Braun
v. United States, 126 S. Ct. 840 (2005); United States v. Hall, 411
F.3d 651, 655 (6th Cir. 2005) (stating that “we fail to see how
Booker . . . allows us to turn our back on the Supreme Court’s prior
ruling in this area (Libretti)”); United States v. Tedder, 403 F.3d
836, 841 (7th Cir. 2005) (holding in pertinent part that Libretti

                                 10
remains binding Supreme Court precedent with respect to forfeiture
and Sixth Amendment) cert. denied, 126 S. Ct. 827 (2005).
        For the foregoing reasons, we join our sister Courts of
Appeals and hold that, even after Booker, the Sixth Amendment’s
trial by jury protection does not apply to forfeiture, as Libretti
remains Supreme Court authority by which we are bound.7
                  III. The Nature of Restitution
        Before turning to Booker’s applicability to restitution under
the MVRA and the VWPA, we consider whether restitution under
these statutes is criminal or civil in nature. If we deem restitution
to be civil, there is no Sixth Amendment concern because that
Amendment’s protections apply only to criminal trials. We note
first that restitution combines features of both criminal and civil
penalties, as it is, on the one hand, a restoration to the victim by
defendant of ill-gotten gains, while it is, at the same time, an aspect
of a criminal sentence.
        This is not the first time we have addressed this issue. In
United States v. Syme, after reviewing several of our earlier cases,
we stated that “[w]e consider restitution orders made pursuant to
criminal convictions to be criminal penalties.” 276 F.3d 131, 159
(3d Cir. 2002). Syme accordingly held that “restitution ordered
under 18 U.S.C. § 3663 [the VWPA] constitutes ‘the penalty for a
crime’ within the meaning of Apprendi.” Id.; see also United
States v. Edwards, 162 F.3d 87, 91 (3d Cir. 1998) (holding that
restitution ordered under MVRA constitutes punishment for
purpose of Ex Post Facto Clause analysis); United States v. Sleight,
808 F.2d 1012, 1020 (3d Cir. 1987) (finding that under Federal
Probation Act, restitution “remains inherently a criminal penalty”);
United States v. Palma, 760 F.2d 475, 479 (3d Cir. 1985) (holding

       7
         We note that Booker expressly states that 18 U.S.C. § 3544,
a provision of the sentencing law that requires a district court to
impose forfeiture on a defendant convicted under RICO, is still
“perfectly valid.” Booker, 125 S. Ct. at 764 (Breyer, J., remedial
majority opinion). Although the forfeiture provision identified in
Booker is not the same provision at issue in this case, “Booker
itself suggests that a district court’s forfeiture determination under
[the RICO forfeiture statute] does not offend the Sixth
Amendment.” Fruchter, 411 F.3d at 382.

                                  11
that restitution ordered under VWPA is criminal penalty).
      The Supreme Court has touched on this issue as well. In
Pasquantino v. United States, a wire fraud case in which the
MVRA applied, the Court noted:
              Petitioners answer that the recovery of taxes is
              indeed the object of this suit, because restitution of
              the lost tax revenue to Canada is required under the
              [MVRA]. We do not think it matters whether the
              provision of restitution is mandatory in this
              prosecution. Regardless, the wire fraud statute
              advances the Federal Government’s independent
              interest in punishing fraudulent domestic criminal
              conduct, a significant feature absent from all of
              petitioners' revenue rule cases. The purpose of
              awarding restitution in this action is not to collect a
              foreign tax, but to mete out appropriate criminal
              punishment for that conduct.


125 S. Ct. 1766, 1777 (2005) (footnote omitted and emphasis
added). Pasquantino suggests that whether the restitution order
being reviewed is mandatory or discretionary does not change the
analysis. Moreover, and more importantly, Pasquantino clearly
states that an award of restitution under the MVRA or the VWPA
is a “criminal punishment.”
        This latter stance is consistent with earlier Supreme Court
precedent. In Kelly v. Robinson, 479 U.S. 36 (1986), the Court
reviewed a Connecticut restitution statute in order to determine
whether a restitution order was dischargeable in bankruptcy. The
Court initially observed that “[t]he criminal justice system is not
operated primarily for the benefit of victims.” Id. at 52. The Court
went on to state that “[a]lthough restitution does resemble a
judgment ‘for the benefit of’ the victim,” it is imposed in the
context of a criminal sentence and “[t]he victim has no control over
the amount . . . or the decision to award” restitution. Id.
Additionally, the Court noted that “the decision to impose
restitution generally does not turn on the victim’s injury, but on the
penal goals of the state and the situation of the defendant.” Id.
Quoting the Bankruptcy Judge who decided the underlying issue,
the Court finally observed that

                                 12
               [u]nlike an obligation which arises out of a
               contractual, statutory or common law duty, here the
               obligation is rooted in the traditional responsibility
               of a state to protect its citizens by enforcing its
               criminal statutes and to rehabilitate an offender by
               imposing a criminal sanction intended for that
               purpose.
Id. (citation omitted and emphasis added). In sum, the Kelly Court
held that restitution granted in a state proceeding as a condition of
probation could not be discharged because it constituted a criminal
penalty enforced “for the benefit of” the government and did not
serve primarily as “compensation for actual pecuniary loss” under
§ 523(a)(7) of the bankruptcy code.8 See id. at 51-52.
        Of the other Courts of Appeals that have addressed this
issue, only the Seventh and Tenth Circuits have held that restitution
is a civil rather than a criminal penalty. See United States v.
Newman, 144 F.3d 531, 542 (7th Cir. 1998) (holding “restitution
authorized by the VWPA (and mandatorily imposed under the
MVRA) is not a criminal punishment for purposes of the Ex Post
Facto Clause”); United States v. Nichols, 169 F.3d 1255, 1279-80
(10th Cir. 1999) (adopting Seventh Circuit’s Newman holding that
Ex Post Facto Clause does not bar application of restitution under


       8
        Section 523(a)(7) reads:

(a) A discharge under section 727, 1141, 1228(a), 1228(b), or
      1328(b) of this title does not discharge an individual debtor
      from any debt –
...
      (7) to the extent such debt is for a fine, penalty, or forfeiture
              payable to and for the benefit of a governmental unit,
              and is not compensation for actual pecuniary loss,
              other than a tax penalty--
              (A) relating to a tax of a kind not specified in
              paragraph (1) of this subsection; or
              (B) imposed with respect to a transaction or event
              that occurred before three years before the date of
              the filing of the petition . . . .
11 U.S.C. § 523(a)(7).

                                  13
MVRA). In contrast, the Fifth, Eighth, Ninth, Eleventh and D.C.
Circuits recognize that restitution, when ordered in connection with
a criminal conviction, is a criminal penalty.9
       Based upon our reading of Supreme Court precedent, we
decline to overturn our precedent in Syme and instead reaffirm our
view, consistent with the view of the majority of the Circuits to
have addressed this issue, that restitution ordered as part of a
criminal sentence is criminal rather than civil in nature.
                   IV. Restitution and Booker
        We next turn to whether Booker applies to orders of
restitution. The Leahy defendants were ordered to pay restitution
under the VWPA, and the defendants in both Gregg and Fallon
were ordered to do so under the MVRA. For purposes of
determining whether Booker applies to orders of restitution under
these two Acts, we believe the distinction between the permissive
language of the VWPA and the mandatory language of the MVRA,
see supra notes 3 and 4, is immaterial. See Pasquantino, 125 S. Ct.
at 1777 (noting that whether restitution is mandatory or
discretionary does not change government’s interest in enforcing
orders of restitution). The primary issue we must therefore address
is whether a defendant’s constitutional right to have certain facts
found exclusively by a jury beyond a reasonable doubt, or admitted
by the defendant, bars a judge from determining the sum of
restitution he or she must pay. We hold that Booker extends no
such protection to criminals under the Sixth Amendment.


       9
          See United States v. Rico Indus., Inc., 854 F.2d 710, 714
(5th Cir. 1988) (“Restitution is a criminal penalty.”); United States
v. Williams, 128 F.3d 1239, 1241 (8th Cir. 1997) (“We conclude
an order of restitution under the MVRA is punishment for Ex Post
Facto Clause purposes.”); United States v. Miguel, 49 F.3d 505,
509 (9th Cir. 1995) (“The [VWPA] also clearly indicates that
restitution is a penalty available to sentencing courts regardless of
other criminal penalties that may be imposed.”); Creel v. Comm’r
of Internal Revenue, 419 F.3d 1135, 1140 (11th Cir. 2005) (“[A]n
order to pay restitution under 18 U.S.C. § 3663 [the VWPA] is a
criminal penalty rather than a civil penalty.”); United States v.
Bapack, 129 F.3d 1320, 1327 n.13 (D.C. Cir. 1997) (endorsing the
Second Circuit’s approach in Thompson).

                                 14
       A.     Fact-Finding Under the Sixth Amendment
        The Sixth Amendment provides that all criminal defendants
“shall enjoy the right to a speedy and public trial, by an impartial
jury.” In the series of recent decisions culminating in Booker, the
Supreme Court considered in depth the respective roles of judge
and jury in the context of fact-finding and criminal sentencing.
The central theme of the Booker line of cases has been that facts
increasing the maximum penalty for a crime must be either
admitted or proven to a jury beyond a reasonable doubt. The
reasoning of these cases also led to a corresponding de-emphasis
in the Court’s Sixth Amendment jurisprudence on the rigid
classification of facts increasing penalties as either elements of a
crime or sentencing factors. After Booker, the inquiry governing
what facts may be found by judges now turns on the effect of the
fact-finding on the defendant’s punishment, rather than the fact’s
legislative classification.
        The Court first articulated this principle in Jones v. United
States, where it stated in a footnote that “any fact (other than prior
conviction) that increases the maximum penalty for a crime must
be charged in an indictment, submitted to a jury, and proven
beyond a reasonable doubt.” 526 U.S. 227, 243 n.6 (1999). The
Court affirmed this principle in Apprendi v. New Jersey, where it
held that “[o]ther than the fact of a prior conviction, any fact that
increases the penalty for a crime beyond the prescribed statutory
maximum must be submitted to a jury, and proved beyond a
reasonable doubt.” 530 U.S. 466, 490 (2000). Four years later, the
Court clarified in Blakely that the relevant “statutory maximum”
for Apprendi purposes is the maximum sentence a judge may
impose based solely on facts reflected in the jury verdict or
admitted by the defendant. Blakely, 542 U.S. at 303-04.
        In addition to refining its Apprendi holding, the Blakely
Court rejected the presumption that “the jury need only find
whatever facts the legislature chooses to label elements of the
crime, and . . . those it labels sentencing factors – no matter how
much they may increase the punishment – may be found by the
judge.” 542 U.S. at 306. The constitutional problem with such a
presumption is that it allows legislatures to subvert the Sixth
Amendment jury right by terming practically any fact a “sentencing
fact,” thereby reducing the number of facts that need to be proven
to a jury for conviction. See id. at 306-07 (“The jury could not

                                 15
function as circuitbreaker in the State’s machinery of justice if it
were relegated to making a determination that the defendant at
some point did something wrong, a mere preliminary to a judicial
inquisition into the facts of the crime the State actually seeks to
punish.”) (emphasis in original). This concern, foreshadowed in
Apprendi,10 dovetailed with the Court’s greater concern that
“[w]hen a judge inflicts punishment that the jury’s verdict alone
does not allow, the jury has not found all the facts which the law
makes essential to the punishment, and the judge exceeds his
proper authority.” Id. at 304 (internal citation and quotation marks
omitted). Thus, the legislative labeling of a fact as an element or
sentencing factor is no longer significant in determining whether
it may or may not be constitutionally found by a judge. Rather,
under Blakely, the central consideration is the effect a given fact
may have on a defendant’s maximum punishment. In short, for
purposes of sentencing under Apprendi and Blakely, whether a fact
is labeled a sentencing fact or an element of the offense is of no
consequence.
        The Booker Court confirmed the insignificance of
legislative labeling in this context by asserting that “the
characterization of a fact or circumstance as an ‘element’ or
‘sentencing factor’ is not determinative of the question ‘who
decides,’ judge or jury.” 125 S. Ct. at 749 (citation omitted). More
important for our purposes, the Booker Court reaffirmed the
reasoning of Apprendi and Blakely and applied it to invalidate the
Federal Sentencing Guidelines, holding that “[a]ny fact (other than
a prior conviction) which is necessary to support a sentence
exceeding the maximum authorized by the facts established by a
plea of guilty or a jury verdict must be admitted by the defendant
or proved to a jury beyond a reasonable doubt.” Id. at 756. Thus,
the key inquiry in determining the applicability of Booker to an
order of restitution under the VWPA or the MVRA is whether a

       10
         In a footnote, the Apprendi Court commented that “when
the term ‘sentence enhancement’ is used to describe an increase
beyond the maximum authorized statutory sentence, it is the
functional equivalent of an element of a greater offense than the
one covered by the jury’s guilty verdict. Indeed, it fits squarely
within the usual definition of an ‘element’ of the offense.” 530
U.S. at 494 n.19.

                                16
judge’s calculation of the sum a defendant must restore to his or
her victim constitutes an increase in punishment exceeding that
authorized by plea or jury verdict, in violation of the Sixth
Amendment.
     B.        Restitution Does Not Exceed the Statutory
Maximum
        Under both the VWPA and the MVRA, when a defendant
is convicted of certain specified offenses, restitution is authorized
as a matter of course “in the full amount of each victim’s losses.”
18 U.S.C. § 3664(f)(1)(A). Hence, under a plain reading of the
governing statutory framework, the restitution amount authorized
by a guilty plea or jury verdict – the full amount of loss – may not
be exceeded by a district court’s restitution order; that is, a district
court is not permitted to order restitution in excess of that amount.
In imposing restitution, a district court is thus by no means
imposing a punishment beyond that authorized by jury-found or
admitted facts. Though post-conviction judicial fact-finding
determines the amount of restitution a defendant must pay, a
restitution order does not punish a defendant beyond the “statutory
maximum” as that term has evolved in the Supreme Court’s Sixth
Amendment jurisprudence. See Booker, 125 S. Ct. at 749
(defining “statutory maximum” as “the maximum sentence a judge
may impose solely on the basis of the facts reflected in the jury
verdict or admitted by the defendant”) (citing Blakely, 542 U.S. at
303) (emphasis in original); see also United States v. Sosebee, 419
F.3d 451, 462 (6th Cir. 2005) (“Nor does [] Booker’s analysis of
the Sixth Amendment affect restitution, because a restitution order
for the amount of loss cannot be said to ‘exceed the statutory
maximum’ provided under the penalty statutes.”). There can
therefore be no Booker violation in the imposition of restitution
under the VWPA or the MVRA.
        Defendants argue that until a district court makes a factual
finding as to the amount of loss, restitution is not authorized in any
amount. As we read the statute, once a defendant is convicted of
an offense covered by the VWPA or the MVRA, a district court
must (or in the case of the VWPA, unquestionably may) order
restitution, and in order to fulfill this mandate, the court must
determine the amount of loss pursuant to 18 U.S.C.
§ 3664(f)(1)(A). Under the defendants’ view, the conviction itself
yields a restitution amount of zero dollars, and the factual finding

                                  17
of the amount of loss therefore increases the sentence beyond the
maximum sum authorized by the facts, in violation of Booker. On
the contrary, we see the conviction as authorizing restitution of a
specific sum, namely the “full amount of each victim’s loss”; when
the court determines the amount of loss, it is merely giving definite
shape to the restitution penalty born out of the conviction.11 Thus,
there is no restitution range under 18 U.S.C. § 3664(f)(1)(A) that
starts at zero and ends at “the full amount of each victim’s losses”;
rather, the single restitution amount triggered by the conviction
under the MVRA, or permitted under the VWPA, is the full amount
of loss. For these reasons, we join the Fifth, Sixth, Seventh,
Eighth, Ninth and Tenth Circuits and hold that Booker does not
apply to orders of restitution under the MVRA and VWPA.12


       11
          We agree with our dissenting colleagues that “the relevant
inquiry is not of form, but of effect–does the required finding [of
the amount of loss] expose the defendant to a greater punishment
than that authorized by the jury’s verdict?” McKee Dis. Op. at 12
(quoting Apprendi, 530 U.S. at 494). As we note throughout this
Subsection, however, we do not believe that determining the “full
amount of each victim’s losses” in any way “exposes” a defendant
to a greater punishment than that “authorized by the jury’s verdict.”
Indeed, the jury’s verdict automatically triggers restitution in the
“full amount of each victim’s losses,” and under the MVRA
restitution is not only “authorized” (as it undoubtedly also is under
the VWPA), it is required. We therefore cannot accept our
dissenting colleagues assertion that uncovering the specific sum
lost by a defendant’s victims amounts to exposure to a punishment
greater than that authorized by a jury’s verdict, as full restitution is
explicitly authorized under the two Acts at issue here. This logic
of course extends to defendants who plead guilty as well.
       12
         See United States v. Garza, 429 F.3d 165, 170 (5th Cir.
2005) (per curiam) (“We agree with our sister Circuits, who have
uniformly held that judicial fact-finding supporting restitution
orders does not violate the Sixth Amendment.”); Sosebee, 419 F.3d
at 461 (6th Cir. 2005) (“Given existing Sixth Circuit precedent and
recent decisions of the other circuits on this issue, we now
conclude that Booker does not apply to restitution and, thus, that
Sosebee's Sixth Amendment challenge has no merit.”); United

                                  18
        This conclusion is consistent with our view that orders of
restitution have little in common with the prison sentences
challenged by the defendants in Jones, Apprendi, Blakely and
Booker. In those cases, the Supreme Court was faced with
“exceptional” and “enhanced” sentences that added anywhere from
two to ten years to the prison terms authorized by the facts found
by the jury or pled to by the defendants. See Blakely, 542 U.S. at
299; see also Booker, 125 S. Ct. at 747 n.1. In contrast, the
restitution ordered in Leahy, Gregg and Fallon was explicitly
authorized by the defendants’ pleas and convictions, and merely
required the defendants to return property and proceeds obtained
as a result of the offense of conviction.
        Restitution is, at its essence, a restorative remedy that
compensates victims for economic losses suffered as a result of a
defendant’s criminal conduct. In this sense, even though restitution
is a criminal punishment, it does not transform a defendant’s
punishment into something more severe than that authorized by
pleading to, or being convicted of, the crime charged. Rather,
restitution constitutes a return to the status quo, a fiscal realignment
whereby a criminal’s ill-gotten gains are returned to their rightful
owner. In these circumstances, we do not believe that ordering a
convicted defendant to return ill-gotten gains should be construed
as increasing the sentence authorized by a conviction pursuant to




States v. George, 403 F.3d 470, 473 (7th Cir. 2005) (“We have
accordingly held that Apprendi v. New Jersey . . . does not affect
restitution . . . and that conclusion is equally true for Booker.”);
United States v. May, 413 F.3d 841, 849 (8th Cir. 2005)
(“[S]everal circuits have affirmatively rejected the notion that
Apprendi, Blakely, or Booker affect the manner in which findings
of restitution can be made . . . . These cases are persuasive.”);
United States v. Bussell, 414 F.3d 1048, 1060 (9th Cir. 2005) (“In
contrast to its application of the Sentencing Guidelines, the district
court's orders of restitution and costs are unaffected by the changes
worked by Booker.”); United States v. Visinaiz, 428 F.3d 1300,
1316 (10th Cir. 2005) (noting that “Blakely and Booker do not
apply to restitution” because “[i]n the Tenth Circuit, restitution is
not a criminal punishment”) (citations omitted).

                                  19
Booker.13
                          V. Conclusion
        For the foregoing reasons, we conclude that restitution
under the VWPA and the MVRA is a criminal penalty and that the
Sixth Amendment right to jury determinations of certain facts as
articulated in Booker does not apply to forfeiture or to orders of
restitution imposed as part of a criminal sentence under those two
statutes.




       13
         We recognize, of course, that the key question under the
Booker analysis is whether the judicial fact-finding required by the
VWPA and the MVRA exposes a defendant to greater punishment
than that authorized by a jury verdict or guilty plea. As discussed
above, we hold that an order of restitution based on such fact-
finding does not violate a defendant’s Sixth Amendment rights.

                                20
United States v. Paul J. Leahy
United States v. Kennard Gregg
United States v. James C. Fallon
Nos. 03-4184/03-4490/03-4542/03-4560/04-2912
SLOVITER, Circuit Judge, concurring.


        I approve and join Parts I. and II. of the majority opinion.
I join in the judgment of Parts III. and IV. While I believe that
Judge McKee’s dissent has much to commend it, in the last
analysis, I join the majority because the majority opinion
persuades me that restitution is not a punishment governed by
the Sixth Amendment.




                                 1
United States v. Paul J. Leahy, et al.
United States v. Kennard Gregg
United States v. James C. Fallon
Nos. 03-4184, 03-4490, 03-4542, 03-4560, and 04-2912


FISHER, Circuit Judge, with whom Judge BARRY joins,
concurring in part in the judgment.

        I approve and join in Parts I, II, and III of the majority
opinion. I concur only in the judgment as to Part IV. I would
base our holding that the imposition of restitution did not violate
the Sixth Amendment right to a jury trial solely on the
conclusion that restitution is not the type of criminal penalty to
which the right to a jury trial attaches. As the majority opinion
correctly notes, “orders of restitution have little in common with
the prison sentences challenged by the defendants in Jones,
Apprendi, Blakely and Booker.” Maj. Op. at 19. The issue of
restitution was not before the United States Supreme Court in
any of those decisions, and the Supreme Court gave no
indication in those decisions that the right to a jury trial applies
to any form of criminal penalty other than imprisonment.
Accordingly, I would not reach – and do not join – the
majority’s conclusion that restitution orders do not constitute an
increase in punishment beyond the “statutory maximum” for the
offense.




                                 1
United States v. Paul J. Leahy, et al.

United States v. Kennard Gregg

United States v. James C. Fallon

Nos. 03-4184, 03-4490, 03-4542, 03-4560, and 04-2912

McKEE, Circuit Judge. Concurring in part and dissenting in part
with Judges RENDELL, AMBRO, SMITH, and BECKER
joining.

        Given the Supreme Court’s holding in Libretti v. United
States, 516 U.S. 29 (1995), I agree that a judicial determination of
the amount of forfeiture when imposing a criminal sentence does
not violate the Sixth Amendment right to a jury trial. Although I
find it difficult to reconcile Libretti with the Court’s subsequent
decisions in Blakely v. Washington, 542 U.S. 296 (2004), and
United States v. Booker, 125 S. Ct. 738 (2005), any tension
between Libretti and those cases must be resolved by the Supreme
Court, as the majority explains. See Maj. Op. at 9 (citing United
States v. Ordaz, 398 F.3d 236, 241 (3d Cir. 2005)). I therefore join
Section II of the majority opinion. However, for the reasons set
forth below, I do not agree that a judge can determine the amount
of restitution under either the Mandatory Victims Restitution Act
(“MVRA”), 18 U.S.C. § 3663A, or the Victim Witness Protection
Act (“VWPA”), 18 U.S.C. § 3663, without violating the Sixth
Amendment. Accordingly, I respectfully dissent from Section IV
of the majority opinion (captioned, “Restitution and Booker”).



                                 I.



       In Apprendi v. New Jersey, 530 U.S. 466 (2000), the
Supreme Court stated, “any fact (other than a prior conviction) that
increases the maximum penalty for a crime must be charged in an
indictment, submitted to a jury, and proven beyond a reasonable
doubt.” 530 U.S. at 476 (citation omitted). The Court later

                                 1
characterized this as a “bright-line rule.” See Blakely 542 U.S. at
303.



        In United States v. Syme, 276 F.3d 131, 159 (3d Cir. 2002),
we held that “restitution ordered under 18 U.S.C. § 3663 [the
VWPA] constitutes ‘the penalty for a crime’ within the meaning of
Apprendi.” We therefore had to determine “whether the . . .
restitution order increased beyond the statutory maximum the
penalties that Syme faced.” Id. “If so, the [restitution] order
violated Apprendi.” Id. We held that Apprendi did not apply
because the VWPA authorizes restitution as part of the criminal
sentence that is imposed upon conviction, and because the statute
“does not specify a maximum amount of restitution that a court
may order.” Id. We reasoned that the VWPA “provides guidelines
that a sentencing judge may use to determine the amount of
restitution, but does not prescribe a maximum amount.” Id. We
concluded that “[t]he Apprendi rule does not apply to restitution
orders . . . because Apprendi applies only to criminal penalties that
increase a defendant's sentence ‘beyond the prescribed statutory
maximum.’” Id. (quoting Apprendi, 530 U.S. at 490).



        However, the Court decided Blakely after we decided Syme.
Blakely clarified that “statutory maximum” for Sixth Amendment
purposes is not the maximum sentence prescribed for a given
offense. Rather, “the ‘statutory maximum’ for Apprendi purposes
is the maximum sentence a judge may impose solely on the basis
of the facts reflected in the jury verdict or admitted by the
defendant.” Blakely, 542 U.S. at 303 (emphasis in original). The
Court clarified further by explaining: “In other words, the relevant
‘statutory maximum’ [for Sixth Amendment purposes] is not the
maximum sentence a judge may impose after finding additional
facts, but the maximum he may impose without any additional
findings.” Id. (emphasis in original). That definition of “statutory
maximum” fatally undermines our analysis in Syme, and it is why
I cannot agree with the majority’s conclusion that the Sixth
Amendment does not apply to orders of restitution.


                                 2
                                   A.



        In Blakely, the Court reasoned that the right to a jury trial “is
meant to ensure [the people’s] control in the judiciary.” Id. at 306.
The Court explained that requiring any fact (other than a prior
conviction) that increases the sentence beyond that authorized by
the jury’s verdict alone to be proven to the jury “reflects not just
respect for longstanding precedent, but the need to give intelligible
content to the right of a jury trial.” Id. at 305. “Apprendi carries
out this design by ensuring that the judge’s authority to sentence
derives wholly from the jury’s verdict.” Id. (emphasis added).
The Court explained that those who “would reject Apprendi are
resigned to one of two alternatives.” Id. The first is that the jury
need only find facts the legislature labels as “elements of the
crime.” This alternative would allow the judge to find facts which
are tantamount to sentencing factors, whether or not they result in
an increase in punishment. Id. However, this reduces the jury’s
findings to “a mere preliminary to a judicial inquisition into the
facts of the crime the State actually seeks to punish.” Id. at 307.
The second alternative is that “legislatures may establish legally
essential sentencing factors within limits – limits crossed when,
perhaps, the sentencing factor is a ‘tail which wags the dog of the
substantive offense.’” Id. (emphasis in original). This means that
“the law must not go too far – it must not exceed the judicial
estimation of the proper role of the judge.” Id. (emphasis in
original). However, “[w]ith too far as the yardstick, it is always
possible to disagree with such judgments and never refute them.”
Id. at 308 (emphasis in original). “[T]he very reason the Framers
put a jury-trial guarantee in the Constitution is that they were
unwilling to trust the government to mark out the role of the jury.”
Id.



       The bright-line rule of Apprendi ensures that punishment
will only be imposed in a manner that is consistent with the Sixth
Amendment. It ensures that “the judge’s authority to sentence
derives wholly from the jury’s verdict.” Id. at 306. Thus, “every
defendant has a right to insist that the prosecutor prove to a jury all

                                   3
facts legally essential to the punishment.” Id. at 313 (emphasis in
original). In Booker, the Court reaffirmed that the Sixth
Amendment right “is implicated whenever a judge seeks to impose
a sentence that is not solely based on ‘facts reflected in the jury
verdict or admitted by the defendant.’” Booker, 125 S. Ct. at 749.




        The Booker Court explained that the sentencing scheme at
issue in Blakely ran afoul of the Sixth Amendment precisely
because it “violated the defendant’s right to have the jury find the
existence of any particular fact that the law makes essential to . . .
punishment.” Id. (internal quotation marks omitted). The judge
was able to impose a sentence greater than that authorized by the
jury’s verdict alone merely by finding additional facts. Id. As a
result, “the judge, not the jury . . . determined the upper limits of
sentencing, and the facts determined were not required to be raised
before trial or proved by more than a preponderance.” Id. at 751.



       Here, the majority pirouettes around Apprendi’s bright-line
concept of “statutory maximum” by ignoring the Court’s definition
of that term while putting a favorable “spin” on restitution.
Restitution, we are told, is “not the type of criminal punishment
that evokes Sixth Amendment protection under Booker.” Maj. Op.
at 7. While conceding that restitution is a criminal sanction, the
majority emphasizes that “orders of restitution have little in
common with . . . prison sentences.” Maj. Op. at 19. We are
reminded that “[r]estitution combines features of both criminal and
civil penalties.” Maj. Op. at 10-11. However, that focus
obfuscates the inquiry and sidesteps the analysis required by
Blakely.



                                 B.




                                  4
        In Pasquantino v. United States, 125 S. Ct. 1766 (2005), the
Court discussed the nature of an order of restitution. There, the
defendants were charged with wire fraud arising from a scheme to
smuggle liquor into Canada to avoid that country’s alcohol import
taxes. They challenged the prosecution, arguing that the
government “lacked a sufficient interest in enforcing the revenue
laws of Canada.” Id. at 1770. The argument arose from the fact
that restitution of Canada’s lost tax revenue was required by the
MVRA. The Court rejected the defendants’ argument, stating:
“The purpose of awarding restitution in this action [was] not to
collect a foreign tax, but to mete out appropriate criminal
punishment for that conduct.” Id. at 1777. Foreign tax collection
was only incidental to the criminal prosecution. The primary
objective of the prosecution was “deterrence and punishment of
fraudulent conduct.” Id. Restitution furthered that objective even
though it also made the victim whole. Thus, in Syme, we correctly
concluded: “restitution ordered under [the VWPA] constitutes the
penalty for a crime within the meaning of Apprendi.” Maj. Op. at
11 (quoting Syme, 276 F.3d at 159).



        Here, no less than in Pasquantino, whatever compensation
results from the defendants’ prosecution is merely incidental to
their criminal prosecution and sentence. The primary objective of
these criminal prosecutions is clearly “deterrence and punishment”
of criminal conduct, not ensuring compensation for the victims.



       As the majority recognizes, this view of restitution is also
required by the Supreme Court’s earlier decision in Kelly v.
Robinson, 479 U.S. 36 (1986). See Maj. Op. at 12. In Kelly, the
Court had to decide if restitution imposed as part of a state criminal
sentence was dischargeable in bankruptcy.14 In resolving that
inquiry, the Court noted that restitution, “[u]nlike traditional fines,


       14
          11 U.S.C. § 523(a)(7) exempts from discharge any
condition a state criminal court imposes as part of a criminal
sentence.

                                  5
. . . is forwarded to the victim, and may be calculated by reference
to the amount of harm the offender has caused.” Kelly, 479 U.S.
at 52. However, in rejecting the defendant’s contention that
restitution was subject to discharge under Chapter 7, the Court
explained:



       The criminal justice system is not operated primarily
       for the benefit of victims but for the benefit of
       society as a whole. . . . Although restitution does
       resemble a judgment “for the benefit of” the victim,
       the context in which it is imposed undermines that
       conclusion. The victim has no control over the
       amount of restitution awarded or over the decision to
       award restitution. Moreover, the decision to impose
       restitution generally does not turn on the victim’s
       injury, but on the penal goals of the State and the
       situation of the defendant.



Id.



        Ignoring their own references to Pasquantino and Kelly,
Maj. Op. at 11-12, the majority declares that “restitution is, at its
essence, a restorative remedy that compensates victims for
economic losses suffered as a result of a defendant’s criminal
conduct.” Maj. Op. at 19 (emphasis added). That view of
restitution ignores the Supreme Court’s pronouncement that “[t]he
purpose of awarding restitution . . . is not [to compensate the
victim], but to mete out appropriate criminal punishment for that
conduct.” Pasquantino, 125 S. Ct. at 1777. That view of
restitution is also inconsistent with the bright-line rule of Apprendi.



      By ignoring that bright-line rule and redefining restitution’s
“essence,” the majority is able to proclaim that “even though

                                  6
restitution is a criminal punishment, it does not transform a
defendant’s punishment into something more severe than that
authorized by pleading to, or being convicted of, the crime
charged.” Maj. Op. at 19. My colleagues state “restitution
constitutes a return to the status quo, a fiscal realignment whereby
a criminal’s ill-gotten gains are returned to their rightful owner.”
Maj. Op. at 19. The pirouette comes full circle once my colleagues
conclude: “[i]n these circumstances, we do not believe that
ordering a convicted defendant to return ill-gotten gains should be
construed as increasing the sentence authorized by a conviction
pursuant to Booker.” Maj. Op. at 19.



        However, that is not the question. The issue is not whether
returning “ill-gotten gains should be construed as increasing the
sentence authorized by a conviction.” Maj. Op. at 19. Rather, the
question is whether the verdict “alone” allows the judge to impose
restitution with no additional finding of fact. Obviously, it doesn’t.
Notwithstanding the jury’s verdict, no restitution can be imposed
absent a judicial determination of the amount of loss. The fact that
the statute “require[s]” the judge to find the amount of restitution,
see Maj. Op. at 17 n.11, does not free the restitution order from the
inescapable Sixth Amendment pitfall created when the judge, and
not the jury, makes the finding. “The dispositive question . . . ‘is
one not of form, but of effect.’ If a State makes an increase in a
defendant’s punishment contingent on the finding of a fact, that
fact – no matter how the State labels it – must be found by a jury
beyond a reasonable doubt.” Ring v. Arizona, 536 U.S. 2428, 2439
(2002) (quoting Apprendi, 530 U.S. at 494; internal citations
omitted).



                                 II.



        The majority believes that a defendant’s conviction for
specified offenses authorizes restitution “as a matter of course ‘in
the full amount of each victim’s losses.’” Maj. Op. at 16 (quoting

                                  7
18 U.S.C. § 3664(f)(1)(A)). Thus, according to my colleagues, the
subsequent sentence of restitution “by no means impose[s]
punishment beyond that authorized by the jury-found facts.
Though the post-conviction judicial fact-finding determines the
amount of restitution a defendant must pay, a restitution order does
not punish a defendant beyond the ‘statutory maximum’ as that
term has evolved in the Supreme Court’s Sixth Amendment
jurisprudence.” Maj. Op. at 17. However, that analysis ignores the
very meaning of “statutory maximum” and the bright-line rule of
Apprendi that the Court erected to ensure the proper role of judge
and jury.



        To reiterate, “‘statutory maximum’ for Apprendi purposes
is the maximum sentence a judge may impose solely on the basis
of the facts reflected in the jury verdict or admitted by the
defendant.” Blakely, 542 U.S. at 303 (emphasis in original). “In
other words, the relevant ‘statutory maximum’ is not the maximum
sentence a judge may impose after finding additional facts, but the
maximum he may impose without any additional findings.” Id. at
303-04 (emphasis in original). The fact that the jury’s verdict
authorizes restitution “in the full amount of the victim’s loss” by no
means allows any restitution to be imposed at all “without any
additional findings.” The jury’s verdict allows the judge to make
the additional finding, but restitution cannot be ordered on the basis
of the jury’s verdict alone.



                                 A.

       The majority’s analysis requires that we accept the
proposition that an order of restitution rests upon the jury’s verdict
alone, even though no restitution can be imposed until the judge
determines the amount of loss. We must also accept that adding a
set dollar amount of restitution to a sentence does not “enhance”
the sentence beyond that authorized by the jury’s verdict alone. I
suspect that a defendant who is sentenced to a period of
imprisonment and ordered to pay restitution in the amount of
$1,000,000 would be surprised to learn that his/her sentence has

                                  8
not been enhanced by the additional penalty of $1,000,000 in
restitution. “Apprendi held[] [that] every defendant has the right
to insist that the prosecutor prove to a jury all facts legally essential
to the punishment.” Blakely, 542 U.S. at 313 (emphasis in
original). Determining the amount of loss is “legally essential” to
an order of restitution.



        Yet, my colleagues agree, as they must, that, for Sixth
Amendment purposes, “the ‘statutory maximum’ . . . is the
maximum sentence a judge may impose solely on the basis of the
facts reflected in the jury verdict or admitted by the defendant.” Id.
at 303 (emphasis in original). They seek to avoid the logical
consequence of that rule by suggesting that additional facts
required to impose the penalty of restitution are not really
“additional facts” at all. However, the Supreme Court has rejected
the distinction required by the majority’s analysis.



       Whether the judge’s authority to impose an enhanced
       sentence depends on finding a specified fact [i.e. the
       amount of loss] . . . one of several specified facts . .
       . or any aggravating fact . . . , it remains the case that
       the jury’s verdict alone does not authorize the
       sentence.



Id. at 305. I therefore cannot accept the majority’s attempt to
suggest that restitution is “not really” additional punishment. See
Maj. Op. at 19 (“Restitution is, at its essence, a restorative remedy
. . . .”).



       In Blakely, “[t]he application of Washington’s sentencing
scheme violated the defendant’s right to have the jury find the
existence of any particular fact that the law makes essential to his
punishment.” Booker, 125 S. Ct. at 749 (discussing Blakely)

                                   9
(internal quotation marks omitted). The judge there “was required
to find additional facts in order to impose the greater . . . sentence.”
Id. (emphasis in original). Similarly, the sentencing judges in the
cases consolidated here were required to find the additional fact of
the amount of loss. Thus, as in Booker, the effect of these
restitution orders is to impermissibly “increase the judge’s power
and diminish that of the jury.” Id. at 751.



        My colleagues claim that the conviction alone authorizes
restitution in an undetermined amount, and that the judicial
determination of loss “merely [gives] shape to the restitution
penalty born out of the conviction.” Maj. Op. at 17 (emphasis
added). That hairsplitting is analogous to the “constitutionally
novel and elusive distinction between ‘elements’ and ‘sentencing
factors.’” Apprendi, 530 U.S. at 494. “[T]he relevant inquiry is
one not of form, but of effect – does the required finding [of the
amount of loss] expose the defendant to a greater punishment than
that authorized by the jury’s verdict?” Id. Requiring facts that
increase the sentence to be proven to a jury is “not motivated by
Sixth Amendment formalism, but by the need to preserve Sixth
Amendment substance.” Booker, 125 S. Ct. at 752. Restitution in
any amount greater than zero clearly increases the punishment that
could otherwise be imposed.15


       15
           The majority’s view that “[i]n imposing restitution, a
district court is . . . by no means imposing a punishment beyond
that authorized by jury-found or admitted facts” is fallacious. To
demonstrate that the maximum amount of restitution authorized by
the conviction is $0, and any increase beyond that figure requires
the District Court to make additional findings of fact, we offer the
following.
        What, exactly, is the amount of loss? When the judge says
to the defendant, “I order you to pay restitution in the amount of
____,” what does the judge use to fill in the blank? Certainly it is
not enough to say “I order you to pay restitution in the full amount
of the victim’s loss”; we suspect that the victim might be
disappointed with the size of the check he ultimately receives under
such a scenario. For this reason, the judge must order restitution in

                                  10
a specific amount, and in order to do so, he or she must make a
factual determination of the size of the victim’s loss. It is this
factual determination, and not the simple act of conviction, that
determines the maximum award that may be imposed. That is why,
in this case, the District Court did not order restitution “in the full
amount of the victim’s loss”; instead, it ordered restitution in the
amount of $408,970 for Leahy, $55,235 for Fallon, and $350 for
Gregg.
        Of course, the determination of “the full amount of the
victim’s loss” plainly is an “additional finding.” So, the majority’s
argument requires us to accept that district courts can somehow
impose restitution “in the full amount of the victim’s loss” without
making a factual determination as to what that amount is. We have
many fine district judges in this Circuit, but we know of none
capable of this feat.
        The majority fails to realize that without additional findings,
the maximum sentence that may be imposed in the form of
restitution is $0. To see why this is true, consider a typical first-
time defendant convicted of possession with intent to distribute in
violation of 18 U.S.C. § 841(a)(1). For simplicity’s sake, we will
focus solely on the issue of drug quantity, and assume that the jury
has found that the substance at issue is cocaine and that no other
sentencing elements (such as criminal history) are relevant. Under
the Guidelines, the District Court could impose a sentence of 10-16
months based solely on the fact of conviction, without making any
more factual findings. If the District Court later determines that the
defendant possessed more than 25 grams of cocaine, then it may,
in accordance with the Guidelines, impose a higher sentence.
        In truth, the determination of drug quantity in this scenario
is precisely equivalent to the determination of the victim’s loss in
the restitution example. In the same way that conviction authorizes
a judge to impose restitution “in the full amount of the victim’s
loss,” so too does conviction for possession with intent to distribute
under 18 U.S.C. § 841(a)(1) authorize the judge to impose “the
appropriate Guidelines sentence of incarceration, based on the
quantity of the drugs possessed by the defendant.”
        The only real difference between the two situations is that
a judge imposing restitution starts from a baseline of $0 and then
makes a determination of fact regarding the actual amount of the

                                  11
                                B.



         The majority finds some comfort in being able to “join[] the
Fifth, Sixth, Seventh, Eighth, Ninth, and Tenth Circuits” in holding
“that Booker does not apply to orders of restitution under the
MVRA and VWPA.” Maj. Op. at 18. However, before Booker
was decided, one could have developed an even more impressive
list of the courts that had incorrectly concluded that Apprendi does
not apply to the federal sentencing guidelines.16 Moreover, the



victim’s loss, while a judge imposing incarceration for violating
§ 841(a)(1) starts from a baseline of 10-16 months and then makes
a determination of fact regarding the actual quantity of drugs sold.
Just as the maximum sentence under § 841(a)(1) without additional
findings is 10-16 months, the maximum amount of restitution
without additional findings is $0.
        Of course, the restitution statutes actually authorize or
require restitution in the full amount of the victim’s loss—just like
the Sentencing Guidelines require incarceration in accordance with
the quantity of drugs the defendant actually sold. The only
relevance of the 10-16 month range is that it is the penalty that may
be imposed without any additional findings—just like the
maximum award of restitution that may be imposed without any
additional findings is $0. In both cases, however, the judge is
required to make additional findings which will increase the
sentence beyond the maximum authorized solely by conviction.
The distinction that the majority draws between the pre-Booker
Sentencing Guidelines and restitution under the VWPA or MVRA
simply is not a meaningful one. In both cases, the judge makes
factual determinations that increase the maximum penalty that may
be imposed. For this reason, both schemes run afoul of the Sixth
Amendment.

       16
          United States v. Goodine, 326 F.3d 26, 27 (1st Cir. 2003);
United States v. Luciano, 311 F.3d 146, 153 (2d Cir. 2002); United
States v. Cepero, 224 F.3d 256, 268 n.5 (3d Cir. 2000); United
States v. Cannady, 283 F.3d 641, 649 n.7 (4th Cir. 2002); United

                                 12
cases the majority cites from other circuit courts are not very
helpful.



        In United States v. Sosebee, 419 F.3d 451 (6th Cir. 2005),
the court rejected a claim that orders of restitution are subject to the
Sixth Amendment by concluding that “restitution statutes do not
specify a statutory maximum,” id. at 461, without ever considering
Blakely’s definition of that term or even discussing Blakely as part
of its Sixth Amendment analysis. In addition, Sosebee attempts to
distinguish Booker by referring to the fact that “restitution orders
are authorized by statute.” Id. at 462. However, the fact that
restitution arises from statute rather than a guideline is obviously
irrelevant to a Sixth Amendment analysis. Constitutional rights are
not subject to legislative repeal. See Ring, 536 U.S. 584. As noted
at the outset, “the very reason the Framers put a jury-trial guarantee
in the Constitution is that they were unwilling to trust the
government to mark out the role of the jury.” Blakely, 542 U.S. at
308.17



        The analysis in United States v. George, 403 F.3d 470 (7th
Cir. 2005), is driven by the fact that the court considers restitution
a civil penalty. The court states: “There is no ‘statutory maximum’
for restitution; indeed, it is not a criminal punishment but . . . a civil



States v. Randle, 304 F.3d 373, 378 (5th Cir. 2002); United States
v. Harper, 246 F.3d 520, 530 (6th Cir. 2001); United States v.
Cole, 298 F.3d 659, 663 (7th Cir. 2002); United States v.
Mora-Higuera, 269 F.3d 905, 911 (8th Cir. 2001); United States
v. Ochoa, 311 F.3d 1133, 1135 (9th Cir. 2002); United States v.
Wilson, 244 F.3d 1208 (10th Cir. 2001); United States v. Sanchez,
269 F.3d 1250, 1262 (11th Cir. 2001); United States v. Fields, 251
F.3d 1041, 1043 (D.C. Cir. 2001).
       17
         Sosebee also relies in part upon our holding in Syme. See
419 F.3d at 461. As I have already explained, our decision there
cannot survive Blakely.

                                   13
remedy administered for convenience by courts that have entered
criminal convictions . . . .” Id. at 473.



        In United States v. Garza, 429 F.3d 165, 169-70 (5th Cir.
2005), the Court of Appeals for the Fifth Circuit also concluded
Booker does not directly affect the MVRA because it is a statute
(as opposed to a guideline), without attempting to explain why that
“distinction” is relevant to a Sixth Amendment analysis. With no
analysis, the court proclaims that judicial fact-finding for restitution
does not violate the Sixth Amendment. The court then states that
“even if there were Booker error in the restitution order, any error
would certainly not be plain under current law.” Id. at 170. The
court used the plain error standard because the defendant had not
objected to the order of restitution. The court does not cite Blakely
in that part of its analysis, nor does it explain why a violation of a
Sixth Amendment right to a jury finding would not affect
substantial rights as required for plain error under United States v.
Olano, 507 U.S. 725 (1993).



        In United States v. May, 413 F.3d 841, 849 (8th Cir. 2005),
the Court of Appeals for the Eighth Circuit concluded “that
restitution does not have a ‘statutory maximum.’” The court also
concluded that, even if there had been a Booker error, it could not
be plain because neither the Supreme Court nor the Eighth Circuit
has held that Booker applies to restitution. Id. However, here
again, there is no discussion of what is meant by “statutory
maximum” for purposes of the Sixth Amendment.



       In United States v. Bussell, 414 F.3d 1048, 1060 (9th Cir.
2005), the defendant challenged imposition of costs and restitution,
but the challenge to restitution rested on her claim that the court
erred in relying upon the intended loss rather than the actual loss.
With no discussion of Blakely, the court decreed: “[i]n contrast to
its application of the Sentencing Guidelines, the district court's
orders of restitution and costs are unaffected by the changes

                                  14
worked by Booker.” The court relied upon United States v.
DeGeorge, 380 F.3d 1203, 1221 (9th Cir. 2004), and United States
v. Chavez, 627 F.2d 953, 957 (9th Cir. 1980), in reaching this
conclusion. However, Chavez, was decided in 1980, long before
Apprendi and Blakely. DeGeorge, like Bussell, states only that
restitution orders pursuant to the VWPA are “unaffected by
Blakely.” The court in DeGeorge simply cited a 1994 Ninth
Circuit case which stated that “restitution determinations under the
VWPA are quite different from sentencing determinations under
the Sentencing Guidelines.” DeGeorge, 380 F.3d at 1221 (internal
citation omitted). Moreover, the court in DeGeorge specifically
stated that, because it was reversing on other grounds, “we will not
address the Blakely issues here; instead, DeGeorge is free to raise
them on remand.” Id. at 1220. Thus, DeGeorge does not advance
the Sixth Amendment inquiry in Bussell, even though the latter
court relies upon it.



        The final case cited by the majority in support of its
restitution determination is United States v. Visinaiz, 428 F.3d 1300
(10th Cir. 2005). There, in its brief discussion of restitution under
Blakely and Booker, the court stated: “[i]n the Tenth Circuit,
restitution is not criminal punishment.” Visinaiz, 428 F.3d at 1316.
Accordingly, Visinaiz does not further the majority’s inquiry
because the majority properly views restitution as a criminal
punishment as required by Pasquantino and Kelly.



                               III.



        In attempting to distinguish restitution from imprisonment,
the majority notes that Apprendi and its progeny all involved rather
substantial increases in terms of incarceration based upon judicial
fact-finding. The majority notes that, “[i]n those cases, the
Supreme Court was faced with ‘exceptional’ and ‘enhanced’
sentences that added anywhere from two to ten years to the prison
terms authorized by the facts found by the jury or pled to by the

                                 15
defendants.” Maj. Op. at 19.



        I agree that this distinction has some merit. For example,
the defendant in Blakely “was sentenced to prison for more than
three years beyond what the law allowed for the crime to which he
confessed.” Blakely, 542 U.S. at 313. However, nothing in the
Supreme Court’s analysis in Apprendi or its progeny (including
Blakely) suggests that the Supreme Court would tolerate this
distinction or that the Sixth Amendment allows it. In fact, the
Court says quite the opposite in holding that the Sixth Amendment
applies to any fact-finding that increases the sentence beyond that
which could be imposed based upon the jury’s verdict alone. As
I have already explained, Apprendi requires that “[o]ther than the
fact of a prior conviction, any fact that increases the penalty for a
crime beyond the prescribed statutory maximum must be submitted
to a jury, and proved beyond a reasonable doubt.” 530 U.S. at 490.
The majority limits that rule to increases in terms of imprisonment.
However, that limitation requires us to turn a blind eye to the
meaning of “statutory maximum.” It merits repeating yet again
that “‘statutory maximum’ for Apprendi purposes is the maximum
sentence a judge may impose solely on the basis of the facts
reflected in the jury verdict or admitted by the defendant.” Blakely,
542 U.S. at 303 (emphasis in original).18


       18
           The Court emphasized this language for a reason, and I
cannot deemphasize it as readily as the majority’s analysis requires.
Even if we could somehow assume that determining the amount of
loss did not expose a defendant to greater punishment, determining
the amount of loss would still be essential to the restitution order.
Therefore, restitution does not rest “solely on the basis of the facts
reflected in the jury verdict or admitted by the defendant.” Rather,
it rests substantially on the judicial determination of the amount of
loss. It is therefore somewhat misleading to suggest that the “key
question under the Booker analysis is whether the judicial fact-
finding required by the VWPA and the MVRA exposes a defendant
to greater punishment than that authorized by a jury verdict or
guilty plea.” Maj. Op. at 19, n. 13. Even assuming arguendo that
a defendant is not exposed to a greater punishment, his/her

                                 16
        The Court could easily have limited its Sixth Amendment
analysis by defining “statutory maximum” as the maximum
sentence of incarceration or confinement (rather than punishment)
that a judge may impose on the basis of the verdict alone. Given
the backdrop of Pasquantino and Kelly, the Court would almost
certainly have used language that would have limited the reach of
its analysis to enhancements that result in a deprivation of liberty
if the Court intended to restrict the Sixth Amendment as the
majority does. The Court could also have limited the reach of
Apprendi to any fact that “substantially” increases the sentence.
The Court did neither.



        I submit that it is difficult to read the majority’s attempt to
rationalize the limits it places on the Court’s Sixth Amendment
jurisprudence without concluding that, in essence, the majority
essentially believes that applying Apprendi to orders of restitution
simply stretches the Sixth Amendment too far. However, Blakely
specifically rejects that limitation by noting that the Framers would
not have left the “definition of the scope of jury power up to
judges’ intuitive sense of how far is too far.” Blakely, 542 U.S. at
308. Rather, the Court created a bright-line rule. Id. Pursuant to
that rule, any factual finding (other than a prior conviction) that
increases the defendant’s punishment beyond that authorized by the
jury’s verdict alone must be proven beyond a reasonable doubt to
a jury or admitted by the defendant. Our decision today cannot be
reconciled with that rule.



       I do, of course, realize that the precise issue of the
application of the Sixth Amendment to restitution orders was not
before the Court in Apprendi or its progeny. It is therefore quite
possible that the Court never considered the precise issue that we
are deciding when it crafted those landmark opinions.
Nevertheless, given the Court’s recent jurisprudence, we are not at


sentence is still based on facts not found by a jury or admitted in a
plea.

                                  17
liberty to rationalize a distinction between punishment in the form
of incarceration on the one hand, and punishment in the form of
restitution on the other. Given the clear pronouncements in
Apprendi and Blakely, any such distinction must be drawn by the
Court in the first instance, and not by us. See Ordaz, 398 F.3d at
241.



        A sentencing court may impose restitution under the
VWRA, and it must do so under the MVRA. I agree with the
majority's conclusion that “the distinction between the permissive
language of VWPA and the mandatory language of the MVRA is
immaterial.” Maj. Op. at 14. Under neither statute does the
restitution order rest “solely” upon the jury’s verdict. A finding of
loss necessarily is a condition precedent to an order of restitution,
and under both statutes, it is the judge who makes the finding. As
I have explained, the imposition of this additional criminal penalty
based on a fact not found by a jury violates the Sixth Amendment.
Therefore, I respectfully dissent from the majority’s conclusion that
the Sixth Amendment does not apply to orders of restitution.




                                 18
United States v. Paul J. Leahy

United States v. Kennard Gregg

United States v. James C. Fallon

Nos. 03-4184/03-4490/03-4542/03-4560/04-2912

AMBRO, Circuit Judge, concurring and dissenting in part



        I write separately to note my view that both the majority and
dissenting opinions are grounded in reasonable interpretations of
Booker’s effect on restitution. On the one hand, Judge Fuentes’
opinion pragmatically avoids an outcome whose
consequences—mandating the Government to prove loss amount
to a jury beyond a reasonable doubt whenever it seeks restitution
for victims—may prove cumbersome to implement. On the other
hand, the broad language of Blakely and Booker appears to dictate
that any fact controlling the maximum sentence that can be
imposed must be admitted or proven to the jury. Thus, as
articulated in Judge McKee’s dissent, under the federal restitution
statutes the amount of loss—because it controls the maximum
restitution that can be imposed—must be subject to the Sixth
Amendment’s jury requirement. Indeed, the difficulty of resolving
the question before us, and the fact that Booker nowhere mentions
restitution (though, to be fair, restitution was not an issue in
Booker), suggest that the Supreme Court did not take restitution
penalties into consideration in crafting the Booker remedy. Until
the Supreme Court directs us otherwise, however, I believe that the
broad language of Booker obligates us to hold that the Sixth
Amendment applies to orders of restitution under the MVRA and
VWPA. Therefore, I join in its entirety Judge McKee’s opinion
concurring in part and dissenting in part.




                                 1
United States v. Paul J. Leahy, et al.

United States v. Kennard Gregg

United States v. James C. Fallon

Nos. 03-4184, 03-4490, 03-4542, 03-4560, and 04-2912

SMITH, Circuit Judge, concurring in part and dissenting in part.

       I join in its entirety Judge McKee’s opinion concurring in
part and dissenting in part. I write separately to note a particular
concern arising out of Part IV of the majority opinion.

       The majority rests its opinion upon a distinction between the
facts “authorizing restitution of a specific sum, namely ‘the full
amount of each victim’s loss’” and the facts “merely giving
definite shape to the restitution penalty born out of the conviction.”
Maj. Op. at 17. The majority implicitly holds that under the
Supreme Court’s decisions in Apprendi v. New Jersey, 530 U.S.
466 (2000), Blakely v. Washington, 542 U.S. 296 (2004), and
United States v. Booker, 125 S.Ct. 738 (2005), only the facts which
authorize a “specific” punishment, and not the facts which give
“definite shape” to that punishment, must be charged in an
indictment, submitted to a jury, and proven beyond a reasonable
doubt

        I suggest that this is a distinction that district courts will find
difficult to understand and apply in other circumstances.
Consequently, the majority opinion does not satisfy “the need to
give intelligible content to the right of jury trial.” See Blakely, 542
U.S. at 305. As the Supreme Court explained in Blakely, defining
a right to a jury trial with intelligible content is a necessary step in
protecting the people’s ultimate control over the judiciary, as the
Framers of the Sixth Amendment intended. See id. at 305-06.

       Indeed, the Court in Blakely explicitly rejected a similar
two-step approach to setting criminal punishments–first allowing
the jury to determine that the defendant’s actions warranted
criminal punishment, and then allowing the court to determine the
actual details of the crime–for precisely this reason. See id. at 306-

                                    1
07 (“The jury could not function as circuitbreaker in the State’s
machinery of justice if it were relegated to making a determination
that the defendant at some point did something wrong, a mere
preliminary to a judicial inquisition into the facts of the crime the
State actually seeks to punish.”) (emphasis in original).
Accordingly, because our decision today renders the right to a jury
trial considerably less intelligible, and consequently undermines
the people’s constitutionally-protected right to ultimate control
over the judicial branch, I join Judge McKee and respectfully
dissent from Part IV of the majority opinion.




                                 2
