                                                                           FILED
                           NOT FOR PUBLICATION                              DEC 20 2012

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



UNITED STATES OF AMERICA,                        No. 10-50220

              Plaintiff - Appellee,              D.C. No. 2:05-cr-00316-DSF-4

  v.
                                                 MEMORANDUM *
RICHARD B. LEONARD, aka Seal D.,

              Defendant - Appellant.




                    Appeal from the United States District Court
                       for the Central District of California
                     Dale S. Fischer, District Judge, Presiding

                           Submitted December 5, 2012 **
                               Pasadena, California

Before: PREGERSON, PAEZ, and HURWITZ, Circuit Judges.


       Richard Leonard appeals a $2,915,427.16 restitution order, imposed after he

pleaded guilty to conspiring to defraud the United States of tax revenue in violation


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
of 18 U.S.C. § 371 and to willfully attempting to evade assessment and payment of

individual income taxes in violation of 26 U.S.C. § 7201. “Provided that it is within

the bounds of the statutory framework, a restitution order is reviewed for abuse of

discretion.”   United States v. Brock-Davis, 504 F.3d 991, 996 (9th Cir. 2007)

(citations omitted).




      1.   Leonard argues that the district court improperly relied on the “bank

deposits” method of determining the amount of distributions made to Leonard and his

co-conspirators. “The critical question is whether the government’s investigation has

provided sufficient evidence to support an inference that an unexplained excess in

bank deposits is attributable to taxable income.” United States v. Stone, 770 F.2d 842,

844-45 (9th Cir. 1985). “The adequacy of a bank deposits investigation necessarily

turns on its own circumstances.” Id. at 845 (internal quotation marks and citation

omitted). Here, although some records from the overseas bank in which relevant

deposits were made were not available, the evidence presented was adequate to

establish the amount of taxable income. See United States v. Hall, 650 F.2d 994, 996

n.4 (9th Cir. 1981) (noting that the bank deposits method is “a circumstantial way of

establishing unreported income”). In light of the Government’s burden to prove the

restitution amount by a preponderance of the evidence, the method used here was


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sufficient to provide a “reasonable estimate” of the loss. 18 U.S.C. § 3664(e); see also

United States v. Ali, 620 F.3d 1062, 1073-74 n.10 (9th Cir. 2010).




      2. Leonard was not denied a meaningful opportunity to be heard on the issue

of restitution. See United States v. Weir, 861 F.2d 542, 546 (9th Cir. 1988). Unlike

Weir, Leonard had ample notice and an opportunity to dispute the final restitution

amount. The district court held a lengthy restitution hearing at which Leonard was

allowed to cross-examine the Government’s witnesses and present his own case.

Leonard was also allowed to file several sentencing memoranda.




      3. Leonard’s argument that the district court abused its discretion by failing to

invoke the so-called “complexity exception” of 18 U.S.C. § 3663A(c)(3)(B) was

waived. In his plea agreement, Leonard agreed “to make full restitution for the losses

caused by [his] activities” and not to appeal the imposition of restitution, although he

retained the ability to appeal the terms and amount of restitution.




      4. Both parties agree that a remand is necessary for the court to set a restitution

payment schedule. See Ward v. Chavez, 678 F.3d 1042, 1046-51 (9th Cir. 2012). In

setting that schedule, the district court should consider “the financial resources and


                                           3
other assets of the defendant.” 18 U.S.C. § 3664(f)(2)(A). The district court may also

consider whether “nominal periodic payments” are appropriate.           18 U.S.C. §

3664(f)(3)(B). Finally, because a remand is necessary and the record does not make

clear whether the district court was aware of its discretion to apportion restitution

under 18 U.S.C. § 3664(h), the district court may also reconsider on remand its

decision to impose upon Leonard the full amount of tax losses caused by the

conspiracy.

      AFFIRMED IN PART, VACATED AND REMANDED IN PART.




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