10-520-cr(L) 10-0520-cr(L),
             10-0615-cr(con)
USA v. Pescatore
             USA v. Pescatore

                   10-0520-cr{L) , 

                   10-0615-cr{con) 

                   USA v. Pescatore 



             1                          UNITED STATES COURT OF APPEALS

             2                               FOR THE SECOND CIRCUIT

             3

             4                                 August Term, 2010

             5     (Submitted:      January 3, 2011            Decided:      February 23, 2011)

             6                        Docket Nos. 10-0520-cr{L), -0615-cr

             7

             8     UNITED STATES OF AMERICA,

             9                                            Appellee,

           10                                 - v. ­

           11      MICHAEL PESCATORE,
           12                                             Defendant-Appellant.
           13

           14      Before:      KEARSE, WINTER, and HALL, Circuit Judges.

           15                  Appeal from an order of the United States District Court

           16      for   the    Eastern District   of   New York,   Thomas   C.    Platt,   Judge,

           17      denying     defendant's   postconviction   motion   for    an   order    either

           18      compelling the government to use a portion of his forfeited assets

           19      to satisfy his restitution obligations, or vacating so much of the

           20      judgment of conviction as ordered him to pay restitution in excess

           21      of his victims' actual losses.

           22                  Affirmed, and remanded for further proceedings.

           23                       LORETTA E. LYNCH, United States Attorney for the
           24                            Eastern District of New York, Brooklyn, New
           25                            York   (Varuni Nelson,  Beth P.    Schwartz,
           26                            Kathleen A. Nandan, Assistant United States
           27                            Attorneys,    Karen R.   Hennigan,   Special
           28                            Assistant United States Attorney, Brooklyn,
           29                            New York, of counsel), for Appellee.
 1                           JAMES      R. FROCCARO, Jr., Port Washington,                                           New
 2                                     York, for Defendant-Appellant.



 3   KEARSE, Circuit Judge:

 4                 Defendant                 Michael           Pescatore,               who        was        convicted     of

 5   operating chop shops in violation of 18 U.S.C.                                                 §§ 2322 and 2, and

 6   of extortion offenses in violation of 18 U.S.C. §§ 1951 and 2, and

 7   who,    in his plea agreement with the government, agreed to forfeit

 8   $2.5     million            in     cash,        plus           certain           real    estate,          and    to   pay

 9   restitution in an amount not less than $3 million, appeals from an

10   order        of       the     United           States          District            Court        for       the    Eastern

11   District          of        New        York,        Thomas          C.      Platt,           Judge,       denying     his

12   postconviction                    motion            for        an         order    either           compelling        the

13   government to use a portion of his forfeited assets to relieve him

14   of     his    restitution obligations,                              a process           called        "restoration,     II




15   18 U.S.C.         §    981 (e) (6),            or vacating as illegal the requirement in

16   the     amended         judgment           of        conviction             that        he    pay     $3 million       in

17   restitution,            to the extent that that sum exceeds the total losses

18   suffered          by        his        identified              chop        shop     victims.               On    appeal,

19   Pescatore contends principally                                  (1)       that the government should be

20   compelled to use a portion of the forfeited assets to satisfy his

21   restitution obligations because no law prohibits such restoration;
22   (2 )    that          the     judgment               ordering              him    to     pay        $3     million     in

23   restitution            is     illegal           to    the       extent           that    the     total      amount     of

24   victim       losses          listed            in    the       pages         of    the        presentence         report

25   ("PSR")       that          are attached to the amended                                 judgment         is less than

26   $3 million; and                  (3)    that his obligation should be further reduced
                                                                -    2     -
 1   because the actual amount of victim losses totals even less than

 2   the    amount        shown   in      the   PSR.       In     opposition,      the    government

 3   argues    (1)       that the decision whether to grant Pescatore relief in

 4   the form of restoration lay solely within the Attorney General's

 5   discretion, which was not abused;                    (2)    that the amended judgment of

 6   conviction           reduced       Pescatore's             restitution        obligation       to

 7   $2,559,611.79 to match the losses identified in the PSR; and                                  (3)

 8   that any contention that the $2,559,611.79 figure is erroneous is

 9   subject to plain-error analysis and does not meet that standard.

10              For the reasons that follow, we conclude that the district

11   court did not           err in rej ecting Pescatore's restoration request;

12   that   the      amended      judgment did not              reduce    the    $3 million amount

13   that     Pescatore        was     ordered     to     pay     in     restitution;      and    that

14   Pescatore is not entitled to an immediate--if any--order excusing

15   him from paying that amount.                  The amount to be paid is limited to

16   the restitution amounts needed to make Pescatore's victims whole,

17   plus interest that Pescatore is obligated to pay on the properly

18   ordered      restitution          amounts     that    he     has     not    timely   paid,    see

19   18 U.S.C.       §    3612 (f) (1),     plus   any penalties            to    which he   may be

20   subj ect for unpaid resti tution amounts as to which he is or was

21   delinquent and/or in default, see id.                       §§    3612 (g), 3572(h) -(i).      If

22   all required payments of restitution,                        interest,       and restitution-

23   related penalties            total     less   than $3 million,              Pescatore will be
24   entitled to a refund of the remainder.                           Accordingly, we affirm the

25   denial of Pescatore's motion but remand for further proceedings.




                                                   - 3 ­
 1                                              1.    BACKGROUND



 2              To the extent relevant to the present case,                                     Pescatore was

 3   first arrested, by law enforcement officers of Suffolk County, New

 4   York,    in mid-2003.               He and others,              including Astra Motor Cars,

 5   Inc.    ("Astra"),          of which Pescatore was president and 50 -percent

 6   owner, were indicted by a New York State grand jury on charges of

 7   fraud     and    enterprise          corruption in violation of New York State

 8   law;    Astra         was    also     indicted           on     state-law       charges           of         money

 9   laundering.            In late 2003,            the United States commenced an in rem

10   civil     action pursuant             to     18 U.S.C.          §§    981(a) (1) (A)        and        (C)     and

11   21 U.S.C.        §§    881 (a) (6)     and       (7)     (the    "civil      forfeiture            action")

12   against several properties owned In whole or in part, directly or

13   indirectly, by Pescatore,                   including one property leased to Astra.

14   The complaint in that action alleged,                                inter alia,          that Astra had

15   engaged     in        illegal      trafficking           in     stolen     vehicles             and     stolen

16   vehicle parts and had defrauded customers.                                 (See United States v.

17   322 Richardson Street,                No.       2:03-cv-6456-TCP            (E . D.N.Y.         filed Dec.

18   24,     2003)         ( "Forfei ture        Complaint"           or     "complaint")              ~~    21-23,

19   56-93.)          It      also      alleged         that       Astra      sold        to     a     narcotics

20   trafficking           organization          specially-ordered              vehicles             that         could

21   accommodate hidden compartments; that Astra accepted large sums of

22   cash from that organization; and that Astra's other owner, Sanford

23   Edmonston,       knew       that     the buyers were drug dealers and that the

24   cash was proceeds of narcotics trafficking.                                     (See id.          ~~    19-20,

25   94-99.)          The        complaint           sought        forfeiture        of        the     defendant

                                                       - 4 -
 1   properties          on    the       ground    that           they were         derived    from proceeds

 2   traceable to "specified unlawful activity" within the meaning of

 3   18 U.S.C.       §    1956 (c) (7),          including             the activities alleged in the

 4   complaint.          (Forfeiture Complaint                     ~~   100-62, 173-75.)

 5              Pescatore, Astra,                 and numerous others were indicted by a

 6   federal     grand          jury      in     2004.            An     84-count      second     superseding

 7   indictment          (the       "Chop       Shop    Indictment" ) - -alleging,               inter         al ia,

 8   operation       of        chop       shops        in     violation · of               18 U.S.C.   §       2322,

 9   alteration or removal of motor vehicle identification numbers in

10   violation of             id.    §   511,    mail        fraud       in violation of id.           §       1341,

11   conspiracy to defraud the United States in violation of id.                                           §    371,

12   and money laundering in violation of id.                                   §    1956 - -named Pescatore

13   in most of the counts.

14              In       February         2005,        Pescatore          was       also    charged,     in      SlX

15   counts of a new federal                      indictment,            with extort ing money from a

16   number of individuals.                      In February 2006,                  the extortion case was

17   tried, and Pescatore was convicted on three of the six counts.



18   A.     The Plea Agreement and the Judgment of Conviction

19              In March 2006, pursuant to a plea agreement dated March 9,

20   2006     (the       "Plea       Agreement"          or       "Agreement"),            Pescatore   pleaded

21   guilty to one count of the Chop Shop Indictment                                        (count 22), which
22   charged him with owning, operating, maintaining, or controlling a
23   chop shop,          in violation of 18 U.S.C.                       §   2322.         Pescatore admitted
24   that,    in that operation from March 1987 through June 14, 2004, he

25   "engaged in receiving stolen motor vehicle parts" that were used

                                                         -    5    -
 1   II   to    rebuild         damaged   motor         vehicles II     (Pl ea    Hearing     Transcript,

 2   March 9,        2006        (IIPlea Tr. II), at 19-20) and hired employees to take

 3   apart,        rebuild,        and sell such vehicles                  (id.   at 21).       The scheme

 4   also         involved,          inter     alia,            altering     and     removing        vehicle

 5   identification               numbers    so     that        stolen     cars     could     be    sold    to

 6   unwitting customers.                 (See id. at 22).

 7                  The     Plea Agreement          was       designed      to settle not          only the

 8   Chop Shop Indictment charges but also the civil forfeiture action

 9   and        the punishment        to be imposed for the three counts on which

10   Pescatore            was    convicted    in        the     extortion     case.       The      advisory­

11   Guidelines-recommended range of imprisonment for his chop shop and

12   extortion            offenses    was    188-235          months.        In     the Agreement,         the

13   government            agreed    to     drop    the       remaining       50-odd     counts      alleged

14   against Pescatore in the Chop Shop Indictment and agreed that an

15   appropriate total prison term for the chop shop offense and the

16   extortion            offenses    would        be     132    months.          (See   Plea      Agreement

17   ~~        4-5, 7.)

18                  In addition to agreeing to plead guilty to count 22 of the

19   Chop         Shop     Indictment,        Pescatore           agreed      to,     inter     alia,      pay

20   restitution of "no less than $3 million":

21                  The count [to which Pescatore agreed to plead guilty]
22                  carries the following statutory penalties:

23

24                               e.     Restitution:    In an amount to be
25                          determined by the Court, but no less than
26                          $3 million.   The parties agree that restitution
27                          with respect to the defendant's tax liabilities
28                          may be ordered by the Court
29                          (18 U.S.C. §§ 3663 and 3663A).

                                                         - 6 ­
 1   (Plea Agreement                ~    1. e . ) .     The       final       sentence of       this provision

 2   applied to Pescatore's federal tax liabilities but became moot, as

 3   Pescatore paid that debt prior to being sentenced.

 4                    In    settlement of              the civil          forfeiture     action,        Pescatore

 5   agreed to              forfeit      $2.5         million      in    cash,    plus     real       estate   (see

 6   id.    ~       9).     With respect to the assets to be forfeited,                                the United

 7   States          Attorney's          Office        for       the    Eastern    District          of New York

 8   ("USAO"          or    "Office")         agreed to recommend that the Department of

 9   Justice              ("DOJ"    or      "Department")               grant     restoration,          relieving

10   Pescatore of all or part of his restitution obligation:

11                    The Office will recommend that any net proceeds
12                    derived from the sale of the Forfeited Apsets be made
13                    available to eligible victims, pursuant to 18 U.S.C.
14                    § 981(e), 28 C.F.R. Pt. 9 and Attorney General Order
15                    No. 2088-97 (June 14, 1997), it being understood that
16                    the Office has authority only to recommend and that
17                    the final decision whether to grant such relief rests
18                    with the Department of Justice, which will make its
19                    decision in accordance with applicable law.

20   (rd.       ~    17.)

21                    Pescatore was sentenced some                       2~    years after his March 2006

22   plea       of        guilty.        At     the     October         24,     2008   sentencing        hearing,

23   Pescatore informed the court that,                                 in the interim,          he had timely

24   turned over many millions of dollars in assets                                      (worth $9 million,

25   see Hearing Transcript,                      January 29,             2010,   at 17,       18)    in complete

26   satisfaction             of    his       forfeiture           obligations,          and     he    urged   the

27   district court to impose a prison term of no more than 132 months

28   in accordance with the Plea Agreement.

29                           MR. STAMBOULIDIS [Pescatore's then-counsel]

30

                                                             -   7 -
 1                    We had entered an agreement with the government
 2               that's documented in that written plea agreement. We
 3               stand here with the government with little if any
 4               disagreement as to what should happen here today. As
 5               we indicated to the court in the plea agreement, and
 6               at the time of the plea the parties, the government
 7               and Mr.   Pescatore,  are asking for a concurrent
 8               sentence on both matters.

 9

10                             We obviously are here to ask for the
11               court's--to honor and accept the plea,      which I
12               believe you indicated in words or substance that you
13               have no problem with, but obviously now that you
14               have the benef i t of a presentence report and much
15               more information than you had then to make up your
16               mind.

17   (Sentencing        Transcript,             October        24,    2008     (II Sentencing                Tr. II) ,

18   at 3-4.)

19               The    court       indicated          that     it    was    prepared            to    sentence

20   Pescatore to,           inter alia,         132 months'          imprisonment in accordance

21   with the Plea Agreement, but it expressed concern that discussion

22   in   the    PSR      "about         180    months    In     custody       as        the     agreed         upon

23   amounts"      (id.       at   11)     could       prove     confusing          to     the        Bureau       of

24   Prisons.          Pescatore          and    the     Assistant       United          States        Attorney

25   ("AUSAII)    agreed       that        it   would     be    appropriate          that        the     PSR       be

26   amended to match              the    Plea Agreement.              (See id.          at 12-14.)              The

27   record does not indicate that any other objection had been made to

28   the PSR.

29               With regard to restitution, the government asked the court

30   to   order    payment          of     $3 million          in     accordance          with         the      Plea

31   Agreement,        and    Pescatore          reminded       the    court    that           the USAO          had

32   agreed to recommend restoration:

33                        [AUSA] GATZ:
                                                       - 8 ­
 1                I just ask the court to enter a resti tution
 2           amount in the amount of $3 million as per the plea
 3           agreement, and the government does stand by its
 4           agreement to recommend concurrent sentences on both
 5           of the matters.

 6

 7                MR. STAMBOULIDIS: With respect to Mr. Pescatore
 8           being ordered to pay any more money,

 9               I just want to remind the court this man paid
10          millions   of dollars in forfeiture,      agreed-upon
11          forfeiture, ahead of schedule in many instances, as I
12          indicated, and we had an understanding and I would
13          ask the court to keep that in mind when it orders
14          restitution that the forfeited moneys,        the US
15          Attorney's Office was going to make a recommendation
16          to whoever the people are in Washington,         main
17          justice or whoever they are called, the people in
18          Washington consider applying any forfeiture money he
19          already paid in, including giving over his house and
20          millions of dollars on top of that, to be applied to
21          any restitution.

22                THE COURT:     If it's within the parameters.

23               I think they would regard it as supplement, any
24          amount ordered here of the $3 million forfeiture
25          [sic], which the government is seeking.     I don't
26          think they have to take it into account what's been
27          paid heretofore.

28               I may be wrong,      Mr.     Stamboulidis,   but I   think
29          that's right.

30               MR. STAMBOULIDIS:  They don't have to, but they
31          should and, I think, in many cases they do.

32               MS. GATZ:  Your Honor, as per the agreement the
33          government negotiated it and we will stand by it. We
34          will recommend that the $3 million restitution be
35          taken from the prior forfeiture.

36                However,  I  told Mr.   Stamboulidis and the
37          defendant is aware, we cannot require them to do
38          that.   We make the recommendation and they consider
39          that.

40   (Sentencing Tr.   14-16.)   The government asked the court to order

41   that the $3 million in restitution "be paid in full by the close
                                      - 9 ­
 1   of the year 2009"            (id. at 21), a delay of some 14 months in light

 2   of the restoration recommendation to be made by the USAO to the

 3   DOJ.      Pescatore asked that                the due date for payment be delayed

 4   for at least three years rather than 14 months,                              so that he could

 5   receive        credi t    for     resti tution      payments        that    would be       made      by

 6   codefendants in the interim.                      (See id. at 21-24.)           The government

 7   opposed that            request,     stating that         Pescatore's victims had been

 8   "calling                    for     the      past     five     years       asking       for    their

 9   restitution.       II     (Id.    at 23.)         The court granted the government's

10   request    and ordered that                 the   restitution        be    paid on or before

11   December 31, 2009.               (See id. at 23-24.)

12              A judgment was entered sentencing Pescatore in accordance

13   with    the        Plea     Agreement.              It    ordered,         inter     alia,         that

14   "$3,000,000.00" in               "restitution       should     be    paid    in     full      by    the

15   close     of     the      year     2009."         Judgment     dated       November      I,    2008,

16   at 4, 5.          The      restitution        order      did   not     state,      or    otherwise

17   incorporate,            the names of the victims to whom restitution was to

18   be made or the amount of loss sustained by each victim.

19              In January 2009, the government asked the court to correct

20   the judgment pursuant to Fed. R. Crim. P. 36,

21              in order to expressly incorporate the Pre-Sentence
22              Report ("PSR") dated February 21, 2008, at pages
23              23-46 and 58-60, which identifies the victims and the
24              actual losses incurred by each victim as a result of
25              said schemes.   The reason for thi s is, in order for
26              the Asset Forfeiture and Money Laundering Section of
27              the Department of Justice to process the restoration
28              request submitted by this office pursuant to the
29              applicable     regulations,    the   judgment    must
30              specifically identify the victims.     In that it was
31              the parties' and the Court's intention that the
32              victims identified in the PSR be included in the
                                                   - 10 ­
 1              judgment, the government respectfully submi ts that
 2              the failure to do so was a clerical error which may
 3              be corrected at any time.

 4   (Letter from AUSA Kathleen Nandan to Judge Platt dated January 28,

 5   2009     ("Government's January 2009                    Letter"),        at 1-2.)          On January

 6   30, 2009, the district court, noting the absence of any objection,

 7   granted the government's                   request      by endorsement.               (The       judgment

 8   with     PSR     pages         appended     lS    hereinafter            referred          to     as     the

 9   "Judgment"          or     "amended      Judgment";       the   appended             PSR    pages        are

10   hereinafter referred to as the "Loss Chart" or "PSR Loss Chart".)



11   B.     Pescatore's Motion To Compel Restoration or To Vacate and
12          Modify the Restitution Requirement

13              In April 2009, AUSA Nandan notified Pescatore that the DOJ

14   had denied the              restoration request.            Pescatore was subsequently

15   informed that Nandan could not disclose the reason for the denial

16   because the Department considered the details of its response to

17   the USAO to be privileged.

18              In       late       October     and    early     November            2009,       Pescatore,

19   represented by new counsel citing Santobello v. New York, 404 U.S.

20   257    (1971),       moved in the district court for an order compelling

21   restoration          as        "specific     performance"           of     ~    17    of        the     plea

22   Agreement,          and,       alternatively,        sought     a        writ    of     coram          nobis

23   declaring       ~   1. e.      of     the Agreement unenforceable as a                       matter of

24   public    policy          to    the    extent    that    $3 million            exceeds       the       total

25   losses of Pescatore's chop shop victims                         ("restoration/restitution

26   motion") .          In support of restoration,               Pescatore pointed out that

27   the Plea Agreement stated that the DOJ would make its decision in

                                                     - 11 -
 1   accordance wi th appl icable law,                    and he argued that it should be

 2   compelled to apply a portion of his forfeited assets to satisfy

 3   his    restitution obligation because no law forbade                              it    to do so.

 4   The government responded that there had been no breach of the Plea

 5   Agreement by the government.                    The AUSA stated that the USAO had

 6   fulfilled        its     promise        to    recommend         restoration          (see    Motion

 7   Hearing Transcript,              January 29,          2010   ("Motion Tr."),           at 18     ("We

 8   made a recommendation to the Department of Justice";                                 "we made the

 9   recommendation,          we made the request"))                  that    "[tl he       request was

10   denied because           the     defendant      actually does           have    assets"        (id. ) ;

11   and that DOJ's decision to deny restoration "is not reviewable in

12   a court of law"          (id.)

13              In     support        of     his    request         for    modification          of     the

14   restitution       order,         Pescatore      pointed        out    that     the     purpose      of

15   restitution is not punishment,                       but compensation of victims,                 and

16   that    the     losses    listed        in    the     PSR Loss       Chart     attached     to     the

17   Judgment      totaled less            than $3 million.           He also argued that in

18   reality the total amount of victims' losses was even less than the

19   total    indicated        by     the    Loss        Chart.      He    asked     that     the     Plea

20   Agreement        be      voided        and     that      the     restitution            amount      be

21   recalculated to reflect the actual losses suffered by his victims.

22              The government, in opposition to Pescatore's request for a

23   reduction of his restitution obligation, stated, inter alia, that

24              [tlhe Court's order of mandatory restitution in the
25              amount of $3 million is consistent with the Mandatory
26              Victim [sl Restitution Act        and is the minimum
27              amount agreed to in the plea agreement            The
28              plea agreement states that restitution shall be "in
29              an amount to be determined by the Court, but no less
                                                   - 12 ­
 1              than $3 million. 11            The Court properly
 2              considered the loss sustained by each victim as a
 3              result of the defendant's offenses, and properly
 4              incorporated   the   analysis set  forth   by the
 5              Pre-sentence Report.

 6                    The defendant pled guilty, and was sentenced
 7              pursuant to an agreement with the government wherein
 8              resti tution of at least $3 million was agreed upon.
 9              The    defendant was   represented by counsel     at
10              sentencing who provided argument        relative  to
11              restitution.    The Court properly considered all
12              relevant matters and ordered restitution in the
13              lowest agreed upon amount.

14   (Letter from Special AUSA Karen R. Hennigan to Judge Platt dated

15   December    30,     2009    (IiGovernment's December 2009 Letter ll ) ,   at 2-3

16   (emphasis in original) . )

17              At   the      January 29,     2010   hearing on Pescatore's motion,

18   the colloquy with respect to restitution included the following:

19                      MR.     FROCCARO      [Pescatore's    new   attorney]:
20

21                   Your Honor, and this is in no way, shape, or
22              form a reflection on your Honor, but in the parties'
23              plea agreement there was an agreement that he would
24              pay no less than $3 million in restitution.

25                   When he was sentenced, there was no probation
26              list attached identifying the victims and the amounts
27              of the losses.

28

29                              You went in accordance with the
30              agreement, judge, with the understanding that there
31              would be in actuality at least $3 million in losses.

32                      THE COURT:    What?

33                  MR. FROCCARO:     That there would be             at   least
34              $3 million in actual losses to the victims.

35                      THE COURT:      Was    that raised at the sentencing
36              time?



                                              - 13 -
 1                     MR. FROCCARO:    You know, Judge, the lawyers
 2                didn't raise it.   And I cited in my papers to your
 3                Honor that it is plain error that the lawyers-­

 4                     THE COURT:  Whoa!   Did anybody say to the court
 5                at the date of sentence that the $3 million figure
 6                which was mentioned, I guess I ordered it [] be paid
 7                by December 31, that that was in error?

 8                     MR. FROCCARO:   They didn't. And that was their
 9                mistake, Judge.    And that constitutes plain error
10                under Second Circuit case law.

11   (MotionTr.4-5.)

12                Froccaro        argued     that         the      victims'        losses        totaled           "at

13   least $1.2 million less than what your Honor ordered"                                           (id.    at 5);

14   and    al though      saying        that       he    was   unable        to    state        a     "def ini te

15   figure"      (id.    at 6),        he said,         "Judge,    this loss is on the PSR for

16   1.8"   (id.    at 18);       "Judge,       I   took a calculator out,                 I   added up the

17   loss amount         in the PSR,        and it added up to 1.8"                       (id.       at 22;        but

18   see    id.     at     21     ("I     never      agreed         to    the      $1.8    million,               your

19   Honor. " ) )        Froccaro acknowledged that Pescatore had not appealed

20   to challenge the $3 million amount.                            (See id. at 6.)

21                The     government,           represented          at     the     hearing            by        AUSAs

22   Hennigan and Gatz,            appeared to take divergent positions on whether

23   the    $3 million          amount     was      proper.          Hennigan        pointed           out        that

24   "there is a          plea agreement wherein the defendant got the benefit

25   of a bargain, got the benefit of an agreement that required him to

26   pay $3 million as of the 31st of December 2009,                                 which was passed"

27   (id.   at 9);        but   she      also stated that,                from     the numbers              in    "the

28   presentence report            that was          incorporated into the sentence"                              (id.

29   at 10),        she     calculated              the     victims'        losses         "to        be         about

30   $2.7 million"         (id.    at 11); and she said that" [i]n the event that

                                                     - 14 -
 1   there      is    ever    some       overpayment,              the    government       would        certainly

 2   consider that"           (id. at 9) .

 3               AUSA Gatz took the position that Pescatore should be bound

 4   by the Judgment, based on his express agreement to pay restitution

 5   of not less than $3 million:

 6                    Your Honor, I just want                        to remind the court                that
 7               the defendant agreed to pay                         $3 million, in the                 plea
 8               agreement.   He said before                           the court I will                  pay
 9               $3 million and no less In                           restitution.   And                 your
10               Honor ordered that.   And we                         are done with the                 J&C.
11               It was filed probably almost                        a year ago.

12                    So this    satellite litigation is   improper,
13               frankly, as a whole because the defendant agreed to
14               the $3 million in the plea agreement.

15   (Motion Tr. 14.)

16               The      court          ultimately            rejected           all      of     Pescatore's

17   arguments.           Having           requested          In    vain     that        Pescatore        provide

18   "specifics"          (id.      at     8)     and        "proof"       (id.     at     12)     as     to    the

19   contention          that        his      victims'            losses     totaled        no      more       than

20   $1.8 million,            the     court       found        that       that     contention           was     not

21   substantiated,           "not on the              representations you made here today,

22   which      [are]     solely         an     effort       to     get    more     time"        (id.    at    22).

23   Further noting that,                of the amount he did not dispute,                              Pescatore

24   "ha[d]n't even produced a dollar in good faith"                                      (id.    at 28),       the

25   court      stated       that    Pescatore             should at       least pay the undisputed

26   amount immediately              (see id.          at 27        ("Pay what you say you owe. ");

27   id.   at    22      ("Pay      them        the    1.8.").)            And    although        noting       that

28   compliance with the Judgment was already nearly 30 days overdue,

29   the court gave Pescatore a new 30-day period within which to pay

30   the     $3 million             ordered           in    the      Judgment;       the        court      denied

                                                           - 15 -
 1   Pescatore's request for a longer period and stated that after 30

 2   days the government should begin to levy on Pescatore's property.

 3   (See id. at 20-24.)

 4                 MS. HENNIGAN: Your Honor, are you ordering that
 5           the defendant pay the $3 million within the next 30
 6           days?

 7                  THE COURT:     3 million bucks.

 8

 9                              Wasn't my order for $3 million?

10                  MS. HENNIGAN:        Yes.

11                  MS. GATZ:     Yes.

12                  THE COURT:     That is the judgment.

13                  MS. HENNIGAN:        Yes.

14                  MS. GATZ:     Yes.

15                  THE COURT:     Enforce it.

16   (Motion Tr. 21-22.)

17                MS. GATZ: Your Honor, at this point you are not
18           setting aside the J&C, which requires the defendant
19           to pay the $3 million. You are not setting aside the
20           J&C, the judgment and conviction, which requires the
21           defendant to pay the $3 million.       You are not
22           setting that aside at this point.

23                  THE COURT:     No.

24   (Id. at 24-25.)

25                MS.   HENNIGAN:             [Y]our Honor,    for
26           clarification.     Your Honor is suggesting that
27           [Pescatore] pay what he does not dispute, but you are
28           holding him accountable for the $3 million.

29                  THE COURT:     Yes, I am.
30   (Id. at 27.)




                                          - 16 -
 1                This appeal             followed.                  The new 30-day period granted by

 2   the district court ended on March 1, 2010.                                        On March 3,        Pescatore

 3   moved       in    this       Court       for        a    stay of        his    restitution obligation.

 4   That motion was denied on March 5.



 5                                                   II.          DISCUSSION



 6                On       appeal,        Pescatore                pursues     his     contentions         (1)        that

 7   restoration,            to     relieve          him of           his    restitution obligation,                   was

 8   required because no law prohibited the DOJ from granting him that

 9   relief;           and        (2)     that,              as      the     purpose       of     restitution           lS


10   compensation,            the        Judgment             ordering        him     to    pay    $3 million           in

11   restitution is illegal to the extent that that amount                                               (a) exceeds

12   the total of his victims                        r       losses as shown by the PSR Loss Chart

13   and   (b)    exceeds an actual--albeit unspecified--loss total that he

14   alleges is lower than that shown by the PSR.                                          For the reasons that

15   follow,          we   find     no meri t                in    the     restoration       contention.              Wi th

16   respect to restitution,                         Pescatore is of course correct that                               its

17   purpose is to compensate victims;                                     however,    as Pescatore did not

18   timely       challenge             the    Judgment              and,     without       obtaining       a     stay,

19   failed to comply with the Judgment,                                     we conclude that he is not

20   entitled to immediate relief from the order to pay $3 million, as

21   it is not clear that that                               sum will exceed the total of                       (a)    the

22   losses       suffered          by        his        chop       shop     victims,       (b)    the    statutory

23   interest to which his victims are entitled because of his delay in

24   making       payment,          and        (c)        the       statutory       penalties       that        may     be

                                                                  - 17 ­
 1   applicable on account of that delay.                               Further proceedings in the

 2   district         court      will        be     required,        after           Pescatore        has     paid

 3   $3 million, to determine whether he is entitled to any refund.



 4   A.     Restoration

 5               Civil        forfeiture          actions       such as      that       commenced by           the

 6   government against Pescatore in 2003 and settled pursuant to the

 7   Plea    Agreement          are    governed        by       18 U.S.C.        §   981.      That       section

 8   "subject[s]           to forfeiture to the United States II property that was

 9   involved         in,      inter        alia,     various        offenses           under        Title     18,

10   including money laundering in violation of                              §       1956 and altering or

11   removing     motor         vehicle           identification         numbers         in    violation        of

12   §    511.    18 U.S.C.            §§    981(a) (1) (A)       and      (F) (i).           To    the     extent

13   pertinent to the present appeal,                       §    981 (e) provides that

14               [n]otwithstanding any other provision of the law,
15                      the Attorney General        is authorized to
16               retain property forfeited pursuant to this section,
17               or to transfer such property on such terms and
18               conditions as he may determine-­

19

20                               (6) as restoration to any victim of                                   the
21                          offense giving rise to the forfeiture

22   18 U.S.C.         §    981 (e) (6)       (emphases          added).             Thus,     the     Attorney

23   General     lS        allowed to choose between restoration and retention.

24   Pescatore has not called to our attention,                                  and we are not aware

25   of,    any provision in this or any other section that requires the

26   Attorney General             to      choose     either option over                 the        other.      The

27   authori zat ion either                 "to    retain               or   to       transfer,"          with no



                                                      - 18 -
 1   accompanying statutory constraints, makes the decision between the

 2   two choices a matter of discretion.

 3             Nor       does        anything       in        the        Plea    Agreement,              which         we

 4   interpret      in accordance wi th tradi tional                            principles of              contract

 5   law,    see generally United States v. Brumer,                              528 F.3d 157, 158 (2d

 6   Cir.    2008),      purport        to    place      any        constraints          on        the    Attorney

 7   General's      exercise          of     that    discretion.                 Paragraph           17        of     the

 8   Agreement      obI igated the            USAO to             "recommend"      that        the DOJ grant

 9   Pescatore      relief       in the        form of            restoration,         and Pescatore has

10   provided no reason to discredit the government's representation to

11   the     district          court         that       the         Office        made        the         promised

12   recommendation.             The Agreement further stated expressly that the

13   USAO    "ha[d]       authority          only       to        recommend       and        that        the        final

14   decision       whether           to     grant       such         relief       rest [ed]             with         the

15   Department"         (Plea       Agreement      ~    17),       and     Pescatore          concedes              that

16   this    called on the DOJ to                   "exercise            its discretion"                 (Pescatore

17   brief on appeal            at    12).      The promise that the Department would

18   "make    its       decision       in     accordance             with       applicable          law"            (Plea

19   Agreement      ~   17)    is not,        as    Pescatore would have                      it    (see,       ~,

20   Pescatore brief on appeal at 4,                         9,    10,    12,    14,    ),    the equivalent

21   of a promise to grant restoration so long as it is not prohibited.

22   The unambiguous statement that the Department, upon receiving the

23   recommendation,           would         make    its          decision       "in     accordance                 with

24   applicable         law"     plainly        means         that        the    Department              would         do

25   anything the law requires and nothing the law prohibits.                                             The Plea




                                                    - 19 ­
 1   Agreement         contains     no        promise      that    the     DOJ would            exercise      its

 2   discretion to grant Pescatore relief that was not required.

 3                To    the     extent    that        the government           suggests here,            as    it

 4   argued in the district court, that the decision of the DOJ to deny

 5   restoration" is not reviewable in a court of law"                                    (Motion Tr. 18),

 6   we    need    not    address        that        issue ,   given that            the government           has

 7   explained the basis for the DOJ's decision,                               and the record cannot

 8   support       a     conclusion           that      that    basis         evinced      any      abuse      of

 9   discretion.          Forfeiture and restitution are separate remedies with

10   different         purposes,        and the DOJ Manual dealing with forfeitures

11   and with compensation for crime victims indicates that discretion

12   may be exercised to transfer forfeited assets to victims                                            "where

13             other property            is     not     available        to    satisfy      the     order of

14   restitution"             (Appendix        to     Government         brief       on    appeal     (United

15   States Department of Justice,                       Asset Forfeiture Policy Manual 164
16   (2010) ) )         At the hearing on Pescatore's restoration/restitution
17   motion,       the     government          explained          that    Pescatore's            restoration
18   "request      was         denied    because         the    defendant         actually        does      have
19   assets"       (Motion Tr.          18;     see also Government brief on appeal at
20   16) ,   and       Pescatore         in     no     way     suggested         that      he    lacked       the
21   wherewithal          to    satisfy        his     restitution        obligations            (see Motion

22   Tr.     16    (Mr.        Froccaro;        "I     have     never         said    he    doesn't         have
23   assets") .)         Accordingly,           the cri teria for restoration set out in

24   the DOJ Manual were not met.

25                In sum, we see nothing in the statutory provisions, DOJ's

26   normal operating procedures,                      or the Plea Agreement that required

                                                       - 20 ­
 1   the Department to use the forfeited assets to relieve Pescatore of

 2   his    restitution obligations,                   and the        record        shows      no     failure    on

 3   the part of the government to consider his request in good faith.

 4   The    district        court      properly denied Pescatore I s                      motion       to compel

 5   the government to grant restoration.



 6   B.     Restitution

 7               The Mandatory Victims                  Restitution Act                  ("MVRA"),      codified

 8   largely at 18 U.S.C.               §§    3663A and 3664, provides,                    in part,      that in

 9   sentencing        a    defendant          convicted        of     a        felony    "offense       against

10   property        under"       Title       18,     "including           any     offense      committed        by

11   fraud or deceit," the court "shall order,                                  in addition to .              . any

12   other      penalty          authorized           by   law,        that        the        defendant        make

13   restitution            to       the     victim        of     the           offense."             18 U . S.C.

14   §§    3663A(a) (1)       and     (c) (1) (A) (ii)          "In each order of restitution,

15   the     court     shall         order    restitution         to       each     victim       in    the     full

16   amount     of     each      victim I s     losses     as     determined             by    the    court     and

17   without      consideration               of     the    economic              circumstances          of     the

18   defendant."           Id.   §    3664 (f) (1) (A)

19               The    purpose         of    restitution        is        to    compensate victims             for

20   their losses.               See,~,             Hughey v.     United States,               495 U.S.        411,

21   416    (1990),     superseded by statute, Crime Control Act of 1990,                                      Pub.

22   L. No. 101-647 § 2509,                  104 Stat. 4789,           4863       (codified at 18 U.S.C.

23   §    3663 (a) (3));      United States v.             Boccagna,             450     F.3d 107,       115    (2d

24   cir.     2006)     ("Boccagna");           United States v.                  Reifler,      446    F.3d 65,




                                                      - 21 -
 1   137    (2d Cir.       2006)   ("Reifler");       United States v.             Nucci,   364 F.3d

 2   419,    423-24    (2d Cir. 2004)        ("Nucci").

 3                   In determining the appropriate measure of value
 4              for property relevant to restitution,       a district
 5              court must consider that the purpose of restitution
 6              is essentially compensatory:    to restore a victim, to
 7              the extent money can do so,        to the position he
 8              occupied before sustaining inj ury .     See Hughey v.
 9              United States, 495 U.S. 411, 416, 110 S.Ct. 1979, 109
10              L.Ed.2d 408 (1990)    (observing that the "meaning of
11              'restitution' is restoring someone to a position he
12              occupied before a part icular event"); United States
13              v. Coriaty, 300 F.3d 244, 253 (2d Cir.2002) (holding
14              that "statutory focus" of the MVRA is "upon making
15              victims whole").     Because the MVRA mandates that
16              restitution be ordered to crime victims for the
17              "full amount"   of losses caused by a defendant's
18              criminal conduct,   see    18 U.S.C.   § 3664 (f) (1) (A);
19              United States v. Reifler, 446 F.3d at 134             , it
20              can fairly be said that the "primary and overarching"
21              purpose of the MVRA "is to make victims of crime
22              whole, to fully compensate these vict ims for their
23              losses and to restore these victims to their original
24              state of well-being."   United States v. Simmonds, 235
25              F.3d [826, 831 (3d Cir. 2000)].

26   Boccagna,       450    F. 3d at 115.         Section 3663A does not authorize the

27   court    to order restitution to victims in excess of their losses.

28   See,~,           Reifler,     446 F.3d at 122-35; Boccagna, 450 F.3d at 109;

29   Nucci,    364     F.3d     at 423-24.         And    as   '"   [f] ederal     courts   have    no

30   inherent power to order restitution'" but only'"                              [s] uch authority

31   [as is]    conferred by Congress'              through statute," United States v.

32   Gottesman,       122 F.3d 150,        151    (2d Cir.     1997)      (quoting United States

33   v. Helmsley,          941 F. 2d 71,    101    (2d Cir.     1991)      (emphasis ours)),       the

34   court    has     no    authority      under    the    MVRA      to    adopt    or   enforce    an

35   agreement calling for restitution in excess of that authorized by

36   statute.




                                                  - 22 -
 1                 The chop shop offense of which Pescatore was convicted was

 2   plainly an offense "against property" and was "committed by fraud

 3   or deceit"       within the meaning of 18 U.S.C.               §    3663A(c) (1) (A) (ii).

 4   His operations         involved,     inter alia,       receiving stolen car parts

 5   and     using    those    parts    to    rebuild   damaged     motor       vehicles,      and

 6   transferring stolen cars to other individuals for replacement of

 7   the vehicle identification numbers with false numbers so that the

 8   cars could be sold to unwitting customers.                     (See Plea Tr. 19-22.)

 9   Thus,    the    MVRA   was applicable and required the district court to

10   order that Pescatore pay restitution to each identified victim of

11   his offense in the full amount of the victim's losses.                             The court

12   was     not    authorized     to   require      resti tution       In    excess    of   those

13   losses.

14                 Pescatore does not dispute the applicability of the                       MVRAi

15   his   contention is         that   the   plea Agreement and the Judgment are

16   illegal because they require him to pay restitution in excess of

17   his     victims'    losses.        The   government,     for       its    part,    does   not

18   contend on this appeal that it was permissible for the court to

19   order restitution in excess of the victims' losses.                          Instead,     its

20   brief     on     appeal    suggests      that    the   amended          Judgment     against

21   Pescatore in fact reduced the restitution order to $2,559,611.79:

22                  [a]lthough Pescatore challenges the $ 3 million
23                 figure to which he agreed, the fact is that the
24                 judgment was amended to incorporate the port ion of
25                 the PSR identifying the victims of Pescatore's crimes
26                 and     their   actual    losses,    which     total
27                 $ 2,559,611.79.

28



                                               - 23 ­
 1                         The judgment against him already has been
 2               amended    to  incorporate   the   victim and    loss
 3               information from the PSR, making his restitution
 4               obligation no more than the actual losses suffered by
 5               his victims of his crimes.

 6   (Governmentls brief on appeal at 18, 20 (emphasis added).)

 7               We disagree with the governmentls characterization of the

 8   Judgment.         However,        given      the      posture         of   the        case,    we        also

 9   disagree with Pescatorels contention that he should immediately be

10   relieved of the requirement that he pay $3 million in connection

11   with his restitution obligations.



12        1.    The Amount Ordered in the Judgment

13               Despi te      the    government I s       contention           on    appeal        that       the

14   amended Judgment requires Pescatore to pay no more in restitution

15   than      $2,559,611.79,         nothing      in      the         record--pertinent            parts       of

16   which are quoted ln Part I.B. above--supports that contention.                                             To

17   begin     with,     the      record   does      not    include         any      document       ordering

18   Pescatore to pay any amount other than $3,000,000 or any order or

19   opinion stating that the $3 million amount originally ordered has

20   been reduced.             Further,    the government I s              letter to the district

21   court,     requesting that the original judgment be                              II   corrected,    II    did

22   not ask the court to change the restitution ordered to a sum other

23   than $3 million;           it asked only that the court amend the judgment

24   by     attaching       the      PSR   pages     that         identified          the     victims          and

25   itemized      their       losses--and      it      stated          that    the        reason    for       the

26   request was that the DOJ required that the judgment specifically

27   identify      the      victims        in   order        II   to     process      the      restoration


                                                   - 24 -
 1   request."           (Government's January 2009 Letter at 1.).                           Nothing in

 2   that letter stated that $3 million was the wrong amount.                                   Nor was

 3   a lesser total amount immediately apparent from the proffered PSR

 4   pages.       While the Loss Chart detailed the losses suffered by each

 5   of 80 victims,             it did not state a total.                From the government's

 6   submission, the district court might easily have inferred that the

 7   Loss     Chart        supported        the     entire     already-ordered             $3 million.

 8   Indeed,        the     Government's          January      2009     Letter        described          the

 9   requested amendment as a "clerical" correction (id. at 2), hardly

10   a     term     that    is    applicable        to   an    undiscussed          reduction           of    a

11   liability by nearly half a million dollars.                             In sum,       neither the

12   letter       nor     the    attached     PSR    pages     alerted       the     court    that       the

13   Judgment as thus augmented might be viewed as reducing Pescatore's

14   restitution obligation from $3 million to $2,559,611.79.

15                Moreover,         such     a    view       was     nowhere        evident     in       the

16   government's          opposition to          Pescatore's November 2009                 request          to

17   have    the ordered          $3 million reduced to match                  the    amount of his

18   victims'        losses.        The     government's           preargument       letter        to    the

19   district       court stated,          inter alia,        that    "[t] he Court's order of

20   mandatory restitution in the                    amount of $3 million is consistent

21   with     the    Mandatory       Victim [s]       Restitution        Act."         (Government's

22   December 2009 Letter at 2.)                    The letter contained no reference to

23   $2,559,611.79.             Nor at oral argument was there any mention of that

24   number.            AUSA     Hennigan     stated     that        based     on    the     PSR     pages

25   incorporated in the Judgment,                   she calculated the victims'                   losses

26   "to    be    about     $2.7 million"         (Motion Tr.         11);   but     that     statement

                                                    - 25 ­
 1   apparently was not meant to suggest that any less than $3 million

 2   was    ordered           In    the        Judgment,           for        she     had     referred         to    the

 3   possibility that               there might be an                    "overpayment"            (id.   at 9),      and

 4   when    the      court        asked        whether           the    Judgment          ordered       payment      of

 5   $3 million,         Hennigan          answered           affirmatively                (id.    at 21).          AUSA

 6   Gatz    echoed       that       affirmative              answer          (see    id.);       and    she    argued

 7   unequivocally            that      Pescatore            had        "agreed      to     pay   $3 million"         in

 8   restitution          "and       no    less,"           that        the    court       had    "ordered"         that

 9   amount      in     the    "J&C,"          and    that        Pescatore's          attempt      to have         that

10   amount reduced was "improper"                           (id. at 14).

11               Finally,          as     revealed           by    the        colloquy       described         in   Part

12   I.B.   above,       the district court itself plainly did not believe it

13   had    amended      the       judgment          to     reduce       the    restitution amount below

14   $3 million.              (See,~,                id.     at 21        (The Court:            "Wasn't my order

15   for $3 million?                                 That is the judgment.") . )

16               The     record thus             in no way supports                       the government's           new

17   cont ent ion that,             because          the     judgment          was    amended      to append         the

18   PSR Loss Chart listing Pescatore's victims and their losses,                                                   that

19   "clerical"          step       reduced          Pescatore's              restitution          obligation         to

20   $2,559,61l.79.                The Judgment             orders        Pescatore         to pay restitution

21   of $3 million.

22               The government's present acknowledgement that,                                          as revealed

23   by    the   pertinent           PSR pages         f    "[a] 11       the       losses    sustained by the

24   victims       of    crimes           in    which        Pescatore          was        involved      add    up    to

25   $2,559,611.79"                (Government             brief         on     appeal       at     17     (footnote

26   omi t ted))      means        that    those           losses       total       some    $440,000      less      than


                                                            - 26 ­
 1   the Judgment orders Pescatore to pay.                             Pescatore contends that the

 2   discrepancy is even greater, arguing that the actual losses listed

 3   In     the      PSR    Loss    Chart      total       "at    least      $1 million           less"     than

 4   $3 million.              (Pescatore         brief      on     appeal         at   8        (emphasis     in

 5   original) . )            We     address        these        two    discrepancies--the                first

 6   actual, the second alleged--in reverse order.



 7        2.      Pescatore's Challenge to the Accuracy of the PSR's
 8                $2,559,611.79 Loss Total

 9                As       indicated      above,      18    U.S.C.       §   3664(f) (1) (A)        required

10   that      the     amount       of    each      victim's       loss      be    determined         by     the

11   district court and included in the restitution order.                                          Although

12   the original judgment entered in November 2008 did not comply with

13   this requirement, the amended Judgment appended the PSR Loss Chart

14   that identified 80 chop shop victims in whose losses Pescatore was

15   involved;         those pages showed the precise amount of each victim's

16   loss.        Although the Loss Chart did not state an overall total of

17   those items,           the total is $2,559,611.79.                      Pescatore contends that

18   the actual total amount of his victims' losses is less.

19                Pescatore had received the February 21,                              2008 PSR well in

20   advance of his sentencing hearing on October 24, 2008.                                       The record

21   does not indicate that in connection with sentencing he made any

22   objection         whatever          to   the    PSR's       specification             of    victims     or

23   losses,       or to      the    total     loss figure--$2,559,611.79--that was in

24   fact stated elsewhere in the PSR.                           Further,     in January 2009, when

25   the government asked the court to amend the original judgment by

26   appending specific pages of the PSR,                          Pescatore made no objection:

                                                     - 27 -
 1   He did not       suggest           that    any individual              or entity identified in

 2   those pages was not a victim in whose loss he was involved; he did

 3   not    suggest         that     any       loss     amount        shown        on     those          pages       was

 4   incorrect;       he      did       not     suggest        that     the        loss        amounts          listed

 5   totaled less than $2,559,611.79.                           And when the amended Judgment

 6   was entered, Pescatore did not appeal.

 7              Pescatore's             contention           that     his     victims'              losses        total

 8   less     than    $2,559,611.79              was     not        advanced        until           he     made      his

 9   restoration/restitution                    motion,         some        nine        months           after       the

10   amended       Judgment         was       filed.         Given      the        lack        of        any    timely

11   objection to the correctness of                          the PSR Loss Chart's listing of

12   Pescatore's            individual           victims,           showing         losses           that         total

13   $2,559,611. 79,              Pescatore's          contention            that        the        Judgment          is

14   inaccurate because              the appended PSR Loss Chart                          is    inaccurate is

15   reviewable      only         for   plain error.                See Fed.        R.    Crim.           P.    52 (b) ;

16   United    States        v.     Catoggio,          326    F.3d     323,     326       (2d        Cir.       2003);

17   United States v. Coriaty, 300 F.3d 244, 252                               (2d Cir. 2002); United

18   States v. Kinlock,             174 F.3d 297, 299 (2d Cir. 1999)

19              Under        the    standard           set    by     the     Supreme           Court           for   the

20   application of Rule 52(b), before an appellate court is allowed to

21   correct an error that was not timely raised in the district court

22   four conditions must be met.                        "[T]here must be                 (1)       'error,'         (2)

23   that is 'plain,' and (3)                  that 'affect[s] substantial rights'''; and

24   "[i]f all three" of those "conditions are met,                                     an appellate court

25   may then exercise its discretion to notice a forfeited error, but

26   only     if     (4 )     the       error         'seriously        affect[s]              the        fairness,


                                                       - 28 ­
 1   integrity,           or    public       reputation              of     judicial           proceedings.'"

 2   Johnson      v.      United     States,       520        U.S.        461,    467         (1997)    {quoting

 3   United States v.           Olano,      507 U.S.       725,       732       (1993))       (other internal

 4   quotation marks omitted)

 5                Pescatore's contention that the actual                               losses suffered by

 6   his chop shop victims are less than the $2,559,611.79 detailed in

 7   the    PSR Loss        Chart    that    was       made    part        of    the Judgment           does       not

 8   meet even the           first    threshold condition of the plain-error test.

 9   His    restoration/restitution                motion       asserted           that        "the    aggregate

10   amount of loss or restitution to the victims identified in the PSR

11   is more      than      $1 million       lower       than Mr.          Pescatore was ordered by

12   the    Court      to    pay"    {Memorandum          of    Law        ln     Support        of    Defendant

13   Michael        Pescatore's            Santobello           Motions           at      7     (emphasis           in

14   original)),       but     it proffered no facts                      to support that assertion.

15   The    motion      did    not    challenge          the     PSR' s          identification          of        any

16   part icular       vict im;      and    it    did    not     challenge             the     amount        of    any

17   specific      PSR-itemized loss.                  Rather,        it    claimed          that     that    lower

18   amount was revealed by "[s] imple ari thmet ic"                               (id.       at 7 n. 5).          Yet

19   the    motion     did     not   proffer       a    precise           amount       by which Pescatore

20   contended the PSR was in error.                       Nor was a precise figure--or any

21   evidence--proffered             at    oral    argument           of    the motion,             despite        the

22   court's request           for   "proof"       (Motion Tr.             12).        Although Froccaro,

23   Pescatore's          attorney,        stated        that     he       used        his     calculator           to

24   determine that "the loss amount in the PSR.                                       . added up to 1.8"

25   (id.    at    22),      Froccaro       also       said,    "I        never    agreed        to    the        $1.8




                                                   - 29 ­
 1   million,"           (id.    at    21),   and said he       could not           give    the court a

 2   "definite figure"                (id. at 6) .

 3                 The district court thus ruled--properly--that it could not

 4   uphold Pescatore's challenge to the accuracy of the PSR based on

 5   his        vague    and    conclusory      assertions       (see,        ~,       Motion Tr.         22

 6   ("not on the representations you made here today"))

 7                 Our own        mathematical        review    conf irms       that       the    relevant

 8   victims'       losses listed in the Loss Chart appended to the Judgment

 9   total        $2,559,611.79.              Although        Pescatore's           brief    on     appeal

10   provides           somewhat      more    enlightenment      than was           proffered      to    the

11   district court as to the nature of his claim of arithmetic error,

12   that claim improperly disregards the fact that in many instances

13   his offense with respect to a particular vehicle caused losses to

14   more than one vict im.                   Given Pescatore's failure to proffer any

15   evidence to show that the PSR Loss Chart is inaccurate, we cannot

16   conclude that              the   amended Judgment's         incorporation of the PSR' s

17   listing        of     losses       totaling      $2,559,611.79       is    error,       much       less

18   "plain" error.



19         3.     Pescatore's Challenge to the $3 Million Requirement

20                 Pescatore's contention that                 the Judgment           is in error to

21   the extent           that it orders him to pay more than $2,559,611.79 is

22   also subj ect             to plain-error review and is far more problematic.

23   In the original judgment entered in November 2008,                                the order that

24   Pescatore           pay    restitution      in    the    amount     of    $3    million did not

25   include or incorporate any identification of Pescatore's victims

                                                     - 30 -
 1   or determination of               each victim's          loss.        Hence       that       judgment's

 2   order that Pescatore pay restitution did not comply with the MVRA.

 3   Pescatore did not appeal to complain of that defect.

 4                More   importantly,        when the government asked the district

 5   court    to amend the            original       judgment by appending                  the     PSR Loss

 6   Chart        itemizing       Pescatore's        victims       and      their       losses,        which

 7   would apparently                bring     the        Judgment        into        compl iance       with

 8   §   3664 (f) (1) (A),     Pescatore did not ask the district court to also

 9   amend    the     original        $3 million          figure     so    that       the     restitution

10   ordered would not exceed the $2,559,611.79 in losses listed in the

11   Loss Chart.         Nor, after the amended Judgment was filed in January

12   2009,    did Pescatore appeal to complain that the Judgment required

13   him     to    pay     more      in   restitution         than        the    $2,559,611.79           the

14   government had proven in losses.                       Rather, he waited until October

15   2009    to    complain of         the Judgment,         ~,           six months after being

16   notified that         the DOJ would not                relieve him of his restitution

17   obligation,         and      nine    months          after    the     Judgment           was     filed.

18   Accordingly, Pescatore's present challenge to the Judgment's order

19   that he pay $3 million in restitution cannot be sustained unless

20   he meets the plain-error test,                       described in Part II. B. 2.                 above.

21   We conclude that he meets the first three elements of that test,

22   but not the fourth.

23                Given the government's concession on this appeal that it

24   proved losses totaling only $2,559,611.79,                           the amended Judgment's

25   retention        of       the     order       that      Pescatore          pay     $3 million        in

26   resti tution was          error.        And     in    light   of      the    authorities          cited


                                                   - 31 ­
 1   above, that error is plain.                   Further,       there can be no doubt that,

 2   at    least at the time the Judgment was amended and itemized only

 3   $2,559,611.79           in     losses,         the     error        affected         Pescatore's

 4   substantial rights,            for it required him to pay some $440,000 more

 5   than     the   MVRA    authori zed.            But     these       are     just    the     threshold

 6   conditions that,            if met,    permit us to "exercise                    [our] discretion

 7   to notice a forfeited error .                        . only if       []    the error seriously

 8   affect [s]      the     fairness,           integrity,        or     publ ic       reputation     of

 9   judicial       proceedings."            Johnson,           520     U.S.     at     467     (internal

10   quotation marks omitted)               (emphasis added).                  In the present case,

11   if     Pescatore        had      proceeded            to     make         timely     payment      of

12   $2,559,611.79,         we    would,     in    the     interest       of     justice,       recognize

13   that his restitution obligation was satisfiedi or if he had timely

14   paid     the   ordered        $3 million,        we        would    conclude        that     justice

15   entitled him to a refund.

16              In fact,         however,    Pescatore,          without obtaining a stay of

17   the Judgment,         simply flouted it.              He moved on December 22, 2009-­

18   and renewed his motion on December 31,                             2009--for a       stay of the

19   Judgment's requirement that he pay on or before December 31, 2009i

20   but    the court did not grant a stay.                        Pescatore nonetheless made

21   no payment at or before that first deadline.

22              At the January 29, 2010 argument on Pescatore's request to

23   reduce the restitution obligation,                         the court- -despite repeatedly
24   noting that Pescatore                "ha[d]n't complied with the order of this

25   court"    (Motion Tr.         24), was nearly "30 days overdue"                          (id. at 20,

26   23i    see,    ~,       id.     at    24,     25),    and     "ha[d]n't          even produced a


                                                   - 32 ­
 1   dollar in good faith"           (id. at 28) --granted Pescatore a new 30-day

 2   period in which to make a restitutionary payment                            (see id. at 20).

 3   That   30-day period ended on March 1,                       2010,       and nothing in the

 4   record suggests that Pescatore made any payment by that date.

 5            After his          March     1,    2010     deadline       had passed,        Pescatore

 6   asked this Court to grant him a stay.                         That motion was promptly

 7   denied on March        5.      No party has informed us that Pescatore has

 8   made any payment yet.

 9            We note also that following this Court's denial of a stay,

10   Pescatore made no effort whatever to expedite this appeal; instead

11   he   missed     several      filing        deadlines,       two     of    which      resulted    in

12   dismissals      (followed eventually by reinstatements)                         of the appeal.

13   As a consequence of the lack of any urgency on Pescatore's part,

14   this   appeal    was    not    submitted for decision until                       January 2011,

15   nearly   a    year     after    the        denial    of    his    request       to    modify    the

16   restitution order, and more than 10 months after the expiration of

17   the new 30 -day period granted him at the January 2010 hearing-­

18   when he was already in noncompliance--to make payment in full.

19            Al though      the    fact        that     the government         had     shown losses

20   totaling only $2,559,611.79 means                     that the Judgment's order for

21   restitution      In    the     amount       of    $3 million        was    In     error,   it    is

22   fundamental law that that error did not give Pescatore the right

23   simply to ignore the court's order.                       It is a

24            basic proposition that all orders and judgments of
25            courts must be complied with promptly.   If a person
26            to whom a court directs an order believes that order
27            is incorrect the remedy is to appeal, but, absent a
28            stay, he must comply promptly with the order pending
29            appeal.
                                                  - 33 -
 1   Maness v. Meyers,             419 U.S. 449,           458    (1975)           (emphasis added).

 2                 [Aln order issued by a court with jurisdiction over
 3                 the subject matter and person must be obeyed by the
 4                 parties until it is reversed by orderly and proper
 5                 proceedings.   This is true without regard even for
 6                 the constitutionality of the Act under which the
 7                 order is issued.

 8   United States v. United Mine Workers of America,                                        330 U.S.       258,    293

 9   (1947)        (footnote omitted));                 see,   ~,     Howat v.                Kansas,       258 U.S.

10   181,190            (1922)     ("until        [thel    decision"       of       a    court of competent

11   jurisdiction "is reversed for error by orderly review,                                                either by

12   itself or by a higher court,                        its orders based on its decision are

13   to be respected");                  SEC v.        Charles Plohn & Co.,                  433 F.2d 376,          379

14   (2d    Cir.        1970)      (" It    is     axiomatic       that        a    court          order    must     be

15   obeyed,        even    assuming         its       invalidity,        until         it    is       properly     set

16   aside.   11   (internal quotation marks omitted)) .

17                 In     light      of     Pescatore's           election              to    disregard           these

18   principles           and    disobey         the    Judgment,    al though               we    agree    that     he

19   cannot        be     compelled         to     pay     more     than           $2,559,611.79            as     pure

20   restitution, we cannot conclude that he has met the final prong of

21   the plain-error test so as to require that he be given immediate

22   relief        from    the     $3 million           figure,     for    a        defendant's            unexcused

23   failure       to comply with a               restitution order has monetary                            (as well

24   as    other        potential)         consequences.           See,     ~,               18 U.S.C.       §§    3572

25   (penalties) ,               3612      (penalties          and    interest);                    3613      (civil

26   enforcement) ,              3613A      (inter        alia,     modification                   of    supervised

27   release terms; contempt of court), 3614                              (resentencing).

28                 The     consequences            most    relevant        to       this          appeal    are     the

29   accrual        of    interest         and     penalties       with        respect            to    restitution

                                                         - 34 -
 1   payments not made when due.                    If a restitution payment of more than

 2   $2,500 is not made as ordered by the court,                                   "[i] n general [, t] he

 3   defendant       shall         pay     interest,"            18 U.S.C.             §    3612 (f) (1) .              In

 4   addition,      a "payment of restitution is delinquent if a payment is

 5   more    than    30    days         late,"     and      is   "in       default          if      a     payment       is

 6   delinquent for more than 90 days."                           18 U. S . C .        §§       3572 (h)       and (i) .

 7   The penalties for delinquency and default are substantial:

 8             If a fine or restitution becomes delinquent, the
 9             defendant shall pay, as a penalty, an amount equal to
10             10 percent    of  the principal      amount  that  is
11             delinquent.    If a fine or restitution becomes in
12             defaul t, the defendant shall pay, as a penal ty, an
13             additional   amount equal to 15 percent of the
14             principal amount that is in default.

15   18 U.S.C.       §    3612(g)         (emphases         added)     i   see     also             id.    §    3612(i)

16   ("Payments relating to fines and restitution shall be applied In

17   the    following       order:          (1)     to      principali           (2)       to       costsi       (3)    to

18   interest i     and     (4)    to penal ties. ,,) .            These penal ties for default

19   and    delinquency           are    not     paid       to   the       defendant s          I    victims,          but
20   rather    become        assets         of     the       United         States              Treasury.              See

21   Administrative          Office        of      the      United States                  Courts,         Guide        to

22   Judiciary           Policy         vol. 13,        §   810.50.10(a) (2)                    (Aug.      3,     2010 )

23   (" Interest assessed on restitution is paid to the victim.                                                        Any

24   penalty assessed on restitution is deposited into Miscellaneous

25   Fines, Penalties, and Forfeitures Fund .                                     . ") .
26             Assuming            that        Pescatore         has        made           no       restitutionary

27   payments during the pendency of this appeal,                                      he has accumulated

28   obligations of interest on the $2,559,611.79, as well as penalties

29   that   are     sizeable.            Thus,     it is not           clear that $3 million will

                                                    - 35 -
 1   exceed the sum of his victims's losses, the statutory interest to

 2   which     the       victims       are    entitled because             of    his    delay      in making

 3   payment,        and       the    statutory penal ties               that    may be appl icable on

 4   account        of    that       delay.       In    all       the   circumstances,         although we

 5   agree     that        Pescatore          cannot         be    compelled       to    pay       more     than

 6   $2,559,611.79 as pure restitution, we cannot conclude that he has

 7   met     the     final       prong       of   the    plain-error            test    in   any    way     that

 8   requires that he be given immediate relief from the requirement

 9   that he pay $3 million.

10                 We note that Pescatore acknowledged in his plea allocution

11   that his chop shop operation began in 1987 and ended in mid-2004.

12   Thus,    his victims have been without compensation for their losses

13   for the better part of a decade, or longer.                                  We conclude that, in

14   light     of        the    choices       made      by    Pescatore         throughout      this       case,

15   including:

16                 • his   initial  agreement                       to     pay     no    less       than
17                 $3 million in restitution,

18                 • his failure to timely object to or appeal from the
19                 amended Judgment to challenge its retention of the
20                 $3 million   restitution obligation despite      the
21                 amendment identifying victims whose losses totaled
22                 only $2,559,611.79,

23                 • his failure to challenge the accuracy of the PSR
24                 Loss Chart before sentencing, at sentencing, or upon
25                 the government's request that the Loss Chart be made
26                 part of the Judgment,

27                 • his unsubstantiated challenges to the accuracy of
28                 the Loss Chart, made in conclusory fashion, more
29                 than a year late, and without even an offer of proof,

30                 • his tortoise-like pace in pursuing relief, both in
31                 the district court and on this appeal, to achieve
32                 delays that he had requested and been denied,

                                                        - 36 ­
 1              • his decision, having repeatedly been denied a stay,
 2              simply to disobey the Judgment, and

 3              • the fact that his failure to make any payments by
 4              the court-imposed deadlines will require him to pay
 5              interest on, and expose him to the possibility of
 6              restitution-related penalties of 10 and 15 percent
 7              of, any unpaid portion of $2,559,611.79,

 8   we   conclude      that     the    interests        of    justice,       fairness,       and      the

 9   public     reputation       of     judicial    proceedings           are    best       served      if

10   Pescatore remains required to make the ordered $3 million payment,

11   subject to his right to a refund of any moneys remaining after his

12   victims     have     been      paid   restitution,          with     interest,         and      after

13   whatever         applicable        restitution-related             penalties           have      been

14   satisfied.




15                                          CONCLUSION



16              We    have considered all           of Pescatore's arguments on this

17   appeal and have found in them no basis for reversal.                                   On remand,

18   the district court will determine,                       inter alia,       (a)   the dates on

19   which payments toward Pescatore's $3 million obligation are made

20   or   are        otherwise        satisfied         by    government        seizure        of      his

21   properties,        (b)   the     amounts of        interest    accruing on any unpaid

22   portion of the principal sum of $2,559,611.79 during Pescatore's

23   periods     of    noncompl iance      wi th   court - ordered         deadl ines,         (c)     the

24   extent     to    which    the     statutory    restitution-related penalties                       on

25   such unpaid principal              are applicable,          and    (d)     if    the    total     of



                                              -    37    ­
 1   restitution,      interest,      and restitution-related penalties does not

 2   exhaust the $3 million, the amount to be refunded to Pescatore.

 3             The    order    of    the     district       court      (a)    denying    an    order

 4   compelling restoration,           and    (b)    denying immediate relief from the

 5   $3 mill ion rest i tut ion order is af firmed.                    Pescatore is to make

 6   payment   of     $3 million       within       60     days   of    the    issuance       of   the

 7   mandate   herein;       interest      on any unpaid portion of $2,559,61l.79

 8   shall   not     cease    to    accrue    during       that   period.        The    mat ter     is

 9   remanded to      the district         court     for proceedings not           inconsistent

10   with this opinion.

11             The mandate shall issue forthwith.




                                               -    38 ­
