                                                                                                                           Opinions of the United
1999 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-28-1999

United States v. Akande
Precedential or Non-Precedential:

Docket 98-5526




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Filed December 28, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

NO. 98-5526

UNITED STATES OF AMERICA

v.

TAIWO ADESHOLA AKANDE,
       Appellant

APPEAL FROM THE
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
(D.C. Crim. No. 98-cr-00519)
District Judge: Honorable Joseph H. Rodriguez

Argued September 9, 1999

Before: ROTH and WEIS, Circuit Judges, and
SHADUR,* District Judge.

(Filed December 28, 1999)

       Mitchell Ignatoff, Esquire
        (ARGUED)
       147 Union Avenue, Suite 2E
       Middlesex, New Jersey 08846

       Attorney for Appellant



_________________________________________________________________

* Honorable Milton I. Shadur, Senior United States District Judge for the
Northern District of Illinois, sitting by designation.
       Michael F. Buchanan, Esquire
        (ARGUED)
       Office of the United States Attorney
       970 Broad Street, Room 700
       Newark, New Jersey 07102

       Attorney for Appellee

OPINION OF THE COURT

WEIS, Circuit Judge.

In the absence of a specific agreement to the contrary, an
order of restitution in a criminal case may not include
losses caused by conduct that falls outside the temporal
limits established by a guilty plea. Because the District
Court added restitution for fraudulent conduct that
occurred before the date of the offense as established in the
plea agreement and colloquy, we will remand for a
reduction of the amount assessed.

After pleading guilty to an Information charging her with
a conspiracy to commit credit card fraud, defendant Taiwo
Adeshola Akande was sentenced to 15 months
imprisonment and directed to pay restitution of $83,137.
Acting in concert with two others, she had used stolen or
altered credit cards to obtain cash advances and
merchandise, in violation of 18 U.S.C. S 1029(a)(2) and 18
U.S.C. S 1029(b)(2).1 The alleged conspiracy, according to
the Information, took place from "on or about December 31,
1997 to on or about July 8, 1998."

Defendant reached a plea agreement in a letter from the
United States Attorney on August 25, 1998. On that same
day, she filed an Application for Permission to Enter Plea of
_________________________________________________________________

1. The statute reaches anyone who "knowingly and with intent to defraud
traffics in or uses one or more unauthorized access devices during any
one-year period, and by such conduct obtains anything of value
aggregating $1,000 or more during that period; . . . if the offense
affects
interstate or foreign commerce . . . ." 18 U.S.C.S 1029(a)(2). Defendant
was liable as a co-conspirator under a separate provision in the statute.
Id. S 1029(b)(2).

                                2
Guilty, which also contained a Waiver of Indictment. In that
document, she stated that "[t]he substance of the plea
agreement is: Guilty Plea to 1 count information charging a
conspiracy . . . from 12/31/97 to 7/8/98."

In the Presentence Report, the probation officer
calculated the victims' losses at $83,137. This sum
included two instances of fraud predating December 31,
1997: a cash advance of $2,900 on November 27, 1997,
and another transaction for $11,200 negotiated on
November 20, 1997. At sentencing, defendant objected to
the inclusion of those two events and pointed out that she
pleaded guilty only to conduct occurring on or after
December 31, 1997. The government countered that she or
her cohorts had been involved in both incidents. The
District Court included both items in its restitution order,
stating that the disputed transactions "were part of the
conspiracy charged in these cases."

On appeal, defendant contends that restitution is due
only for conduct occurring on or after December 31, 1997.
The government asserts that the District Court was correct
because the activity was part of the charged conspiracy,
and the relevant statutes permit courts to order restitution
for conduct not included in the Information.

We exercise plenary review over the determination that
restitution was lawful, and review the amount awarded for
clear error. United States v. Jacobs, 167 F.3d 792, 795 (3d
Cir. 1999).

We begin with the firmly established principle that federal
courts may not order restitution in the absence of statutory
authorization. United States v. Hensley, 91 F.3d 274, 276
(1st Cir. 1996); United States v. DeSalvo, 41 F.3d 505, 511
(9th Cir. 1994); United States v. Casamento, 887 F.2d 1141,
1177 (2d Cir. 1989). The history of the pertinent statutes,
past and present, reveals that this authorization is limited
to the "offense of conviction." The Federal Probation Act of
1948 permitted a sentencing judge to order restitution for
"loss caused by the offense for which conviction was had."
Act of June 25, 1948, ch. 645, S 3651, 62 Stat. 683, 842
(1948) (codified at 18 U.S.C. S 3651 and repealed 1984).
Similarly, the Victim and Witness Protection Act of 1982

                               3
also tied restitution to the offense of conviction, stating that
a court, "when sentencing a defendant convicted of an
offense under this title . . . , may order . . . restitution to
any victim of the offense." Pub. L. No. 97-291, S 5(a), 96
Stat. 1248, 1253 (1982) (codified at 18 U.S.C. S 3579(a)(1)
and recodified and amended as 18 U.S.C. S 3663).

In Hughey v. United States, 495 U.S. 411 (1990) (Hughey
I), the defendant pleaded guilty to one count in exchange
for dismissal of all other charges. He did not admit to any
conduct beyond the count of conviction. The sentencing
court nevertheless ordered him to pay restitution for the
additional losses attributable to the dismissed counts.

The Supreme Court, focusing on the language of 18
U.S.C. S 3579, held that the statute "link[ed] restitution to
the offense of conviction." Id. at 416. Had Congress
intended otherwise, it "would likely have chosen language
other than `the offense,' which refers without question to
the offense of conviction." Id. at 418. Accordingly,
restitution was allowable "only for the loss caused by the
specific conduct that is the basis of the offense of
conviction." Id. at 413.

The Court acknowledged that a plea agreement may
operate to limit the acts for which restitution might be
ordered, but pointed out that "[t]he essence of a plea
agreement is that [both sides] make concessions to avoid
potential losses." Id. at 421. The government's argument for
greater breadth of the restitution order was thus rejected in
favor of a narrow construction of the statute. Further, even
were the text ambiguous, "longstanding principles of lenity"
dictated that the statute be read in the defendant's favor.
Id. at 422. The Court therefore concluded that restitution to
victims other than those of the count of conviction was
invalid. Id.

In United States v. Seligsohn, 981 F.2d 1418, 1421 (3d
Cir. 1992), we followed Hughey I's admonition "that the
count of conviction controls the amount of restitution."
Accordingly, we instructed the District Court on remand to
"focus on the counts to which pleas are entered" in order to
determine the restitutionary amount. Id. at 1423.

                               4
Soon after the Hughey I decision, Congress acted to
enlarge the set of "victims" to whom restitution could be
granted. The Victim and Witness Protection Act was
amended to provide that "a victim of an offense that
involves as an element a scheme, a conspiracy, or a pattern
of criminal activity means any person directly harmed by
the defendant's criminal conduct in the course of the
scheme, conspiracy, or pattern." Crime Control Act of 1990,
Pub. L. No. 101-647, tit. XXV, S 2509, 104 Stat. 4789, 4863
(1990) (amending 18 U.S.C. S 3663).

As we noted in United States v. Kones, 77 F.3d 66, 70 (3d
Cir. 1996), the amendment augmented the authority of the
District Courts beyond that permitted by Hughey I. This
expansion, however, "is not so broad that it permits a
district court to order restitution to anyone harmed by any
activity of the defendant related to the scheme, conspiracy
or pattern." Id. The victim's harm must be closely
connected to the conspiracy or scheme rather than merely
tangentially. Id.

As Kones pointed out, Congress intended that restitution
was to be "readily determined by the sentencing judge
based upon the evidence" produced during trial or in the
course of plea proceedings. Id. at 69. In short, Kones
followed Hughey I's approach in applying a narrow reading
of the restitution statute.

Mr. Hughey's contribution to the law of restitution did
not end with the Supreme Court's opinion. He again
engaged in criminal activities that ultimately came to the
attention of the Court of Appeals for the Fifth Circuit in
United States v. Hughey, 147 F.3d 423 (5th Cir. 1998)
(Hughey II). Following his conviction -- this time for bank
fraud -- his order of restitution included losses from
offenses committed before the date set out in the
indictment.

The Court of Appeals held that the district judge could
award restitution only for "the conduct made the basis of
[the defendant's] conviction." Id. at 438. Acknowledging the
enactment of the 1990 amendments, the Court nevertheless
reaffirmed that Hughey I's limitation of the award to losses
within the scope of the offense "still stands." Id. at 437. The

                               5
reliance upon the temporal limits of the indictment in
Hughey II is thus consistent with the admonition in Hughey
I that restitution must be linked directly to the offense of
conviction.

The statute in effect at the time of sentencing, 18 U.S.C.
S 3663A,2 was enacted as part of the Antiterrorism and
_________________________________________________________________

2. Section 3663A, entitled "Mandatory restitution to victims of certain
crimes," states in relevant part:

       (a)(1) Notwithstanding any other provision of law, when sentencing
       a defendant convicted of an offense described in subsection (c),
the
       court shall order, in addition to, or in the case of a misdemeanor,
       in addition to or in lieu of, any other penalty authorized by law,
that
       the defendant make restitution to the victim of the offense or, if
the
       victim is deceased, to the victim's estate.

       (2) For the purposes of this section, the term"victim" means a
       person directly and proximately harmed as a result of the
       commission of an offense for which restitution may be ordered
       including, in the case of an offense that involves as an element a
       scheme, conspiracy, or pattern of criminal activity, any person
       directly harmed by the defendant's criminal conduct in the course
of
       the scheme, conspiracy, or pattern.

       . . . .

       (c)(1) This section shall apply in all sentencing proceedings for
       convictions of, or plea agreements relating to charges for, any
       offense--

       (A) that is--

        (i) a crime of violence, as defined in secti on 16;

        (ii) an offense against property under this ti tle, including any
       offense committed by fraud or deceit; or

        (iii) an offense described in section 1365 (re lating to tampering
       with consumer products); and

       (B) in which an identifiable victim or victims h as suffered a
       physical injury or pecuniary loss.

       (2) In the case of a plea agreement that does not result in a
       conviction for an offense described in paragraph (1), this section
         shall apply only if the plea specifically states that an offense
listed
         under such paragraph gave rise to the plea agreement.

                                 6
Effective Death Penalty Act of 1996. See Mandatory Victims
Restitution Act of 1996, Pub. L. No. 104-132, tit. II, subtit.
A, S 204(a), 110 Stat. 1214, 1227-29 (1996). Unlike its
companion provision at 18 U.S.C. S 3663, this section
mandates restitution for certain crimes, such as property
offenses committed by fraud or deceit. 18 U.S.C.
S 3663A(c)(1).

The statute provides that a court "shall order . . . that the
defendant make restitution to the victim of the offense." Id.
S 3663A(a)(1). The term "victim" means"a person directly
and proximately harmed . . . including, in the case of an
offense that involves as an element a scheme, conspiracy,
or pattern of criminal activity, any person directly harmed
by the defendant's criminal conduct in the course of the
scheme, conspiracy, or pattern." Id.S 3663A(a)(2). The court
shall also order restitution as provided in a plea agreement,
even to "persons other than the victim of the offense." Id.
S 3663A(a)(3).3

The critical references in the statutory text are to"victim
of the offense" and to "an offense that involves as an
element a . . . conspiracy, . . . any person directly harmed
_________________________________________________________________

       (3) This section shall not apply in the case of an offense
described
       in paragraph (1)(A)(ii) if the court finds, from facts on the
record,
       that--

       (A) the number of identifiable victims is so lar ge as to make
       restitution impracticable; or

       (B) determining complex issues of fact related to the cause or
       amount of the victim's losses would complicate or prolong the
       sentencing process to a degree that the need to provide restitution
       to any victim is outweighed by the burden on the sentencing
       process.

3. Restitution is limited to amounts "directly caused by the conduct
composing the offense of conviction," or those amounts that defendant
"expressly agree[s] to" pursuant to the plea agreement. United States v.
Silkowski, 32 F.3d 682, 689 (2d Cir. 1994). Here, the plea agreement
merely indicates that the sentencing judge "will order [defendant] to pay
restitution." It does not specify any victims or amounts. Thus, the scope
of restitution must be found by looking to the authority granted by the
statute.

                               7
by the defendant's criminal conduct in the course of the
. . . conspiracy." The issue here is how this language,
virtually identical to the corresponding portions of section
3663, is to be construed. Accordingly, we look to the case
law that construes either section 3663 or 3663A.

In addition to Hughey II, other opinions have also
discussed temporal concerns. In DeSalvo, the Court of
Appeals for the Ninth Circuit read an indictment's temporal
limits narrowly, to prevent "vague allegations" from
supporting restitution "based upon broad, unsubstantiated
conduct." 41 F.3d at 515 (internal quotes omitted). In
United States v. Pepper, 51 F.3d 469, 473 (5th Cir. 1995),
the Court of Appeals for the Fifth Circuit held that the
dates specified in the indictment, together with a
description of the unlawful conduct, was "specific enough
to satisfy" Hughey I. Other courts have held to the same
effect. See, e.g., Hensley, 91 F.3d at 277-78 (looking to
"duration" and "timing" of the offense of conviction); United
States v. Silkowski, 32 F.3d 682, 689 (2d Cir. 1994) (losses
"directly caused by conduct within the temporal limits of
the offense of conviction"); United States v. Hayes, 32 F.3d
171, 173 (5th Cir. 1994) (no restitution for losses incurred
in period before date of offense of conviction); United States
v. Langer, 962 F.2d 592, 601 (7th Cir. 1992) (indictment
described "specific dates").

Even in cases where temporal matters were not at issue,
courts have held that a defendant may not be ordered to
pay restitution for losses unrelated to the acts for which he
was convicted. United States v. Upton, 91 F.3d 677, 686
(5th Cir. 1996); United States v. Henoud, 81 F.3d 484, 488
(4th Cir. 1996). The conduct underlying the offense of
conviction thus stakes out the boundaries of the
restitutionary authority.

In sum, the "offense of conviction," as defined by Hughey
I, remains the reference point for classifying conduct that
determines liability for restitution. Although the
amendment expanded the breadth of the definition of
victims, the text did not extend the length of the period
attributable to the offense of conviction. We therefore find
ourselves in agreement with the Hughey II Court that the

                               8
offense of conviction is temporally defined by the period
specified in the indictment or information.

The government suggests that even if the defendant's
conduct is not within the scope of the offense as described
by Hughey I, the conduct challenged here is within the
ambit of the 1990 amendments. That argument misses the
mark. The amendment enlarged the group of victims who
would be entitled to restitution, but the triggering event --
the offense of conviction -- remains the same. United States
v. Welsand, 23 F.3d 205, 207 (8th Cir. 1994) (the
amendment "does not explicitly extend the contours of the
word `offense' ").

Although victims need not be specifically named in the
indictment or at trial, their harm must still be directly and
proximately caused by the criminal conduct that is
established by the prosecution. As the 1990 House Report
made clear, restitution was authorized only for"a victim of
the offense for which the defendant has been convicted."
H.R. Rep. No. 101-681(I), at 177, reprinted in 1990
U.S.C.C.A.N. 6472, 6583. As stated in a later Senate Report
accompanying the enactment of section 3663A, restitution
is to be ordered where the loss was "directly and
proximately caused by the course of conduct under the
count or counts for which the offender is convicted." Sen.
Rep. No. 104-179, at 19, reprinted in 1996 U.S.C.C.A.N.
924, 932. Congress did not want sentencing to become a
forum for determination of issues better suited to civil
proceedings. Id. at 18, reprinted in 1996 U.S.C.C.A.N. 924,
931.

Trying another tack, the government notes that the
Information used the phrase "on or about" in setting out
the time when the conspiracy commenced. According to
this theory, inserting the qualification stretches the edges of
the Information timeline so that it encompasses the two
transactions in question. We recognize that in other
settings, some variance in proof at trial from the date stated
in an indictment has been permitted where qualified by a
phrase such as "on or about." United States v. Somers, 496
F.2d 723, 743-46 (3d Cir. 1974). But even in those
situations, such variances may not be allowed to the
defendant's actual prejudice. Id. at 744 (citing Berger v.

                               9
United States, 295 U.S. 78 (1935), and Kotteakos v. United
States, 328 U.S. 750 (1946)). Cf. United States v. Critchley,
353 F.2d 358, 362 (3d Cir. 1965).

Further, although the government cites opinions giving
an expansive scope to the amorphous qualifier"on or
about," these cases generally involve attacks on the
sufficiency of the evidence or indictment, and not
challenges to restitution. See, e.g., United States v. Charley,
189 F.3d 1251, 1272-73 (10th Cir. 1999).

Because the government "has control over the drafting" of
the Information, it bears the burden of "includ[ing]
language sufficient to cover all acts for which it will seek
restitution." DeSalvo, 41 F.3d at 514. Here, the prosecution
offers "no justification for its failure to specifically allege"
the November incidents in the Information, nor
demonstrates that the phrase "on or about" evinces an
intent to cover such conduct. Id. Whatever might be the
result in cases where the events were closer in time than a
month, under the circumstances now before us, we are not
persuaded by the "on or about" argument.

We are therefore left with the question of what was the
"offense of conviction." Because the conviction here was the
result of a plea bargain rather than the product of a jury
verdict, we look to the plea agreement and colloquy. United
States v. Broughton-Jones, 71 F.3d 1143, 1148 (4th Cir.
1995); Silkowski, 32 F.3d at 689.

The plea agreement contains a merger clause, but
nothing there indicates that the "on or about" language in
the Information extends so far back as to embrace the
November incidents. In the document filed with the District
Court on the same day as the plea agreement, defendant
stated that "the substance" of the charge and plea
agreement was for a conspiracy "from 12/31/97 to
7/8/98." Nowhere in this document, a supplement to the
plea colloquy, did she admit to any criminal conduct
occurring before December 31, 1997.

In addressing defendant at the plea colloquy, the district
judge asked the following questions, in order "for the court
to trace the facts to see that they meet the essential

                               10
elements of the offense charged in the Information."
Defendant answered all queries in the affirmative.

       - "In late 1997, did you agree with [co-defendants]
       that the three of you would use stolen credit card
       account numbers . . . to obtain cash advances and
       merchandise to which none of you were entitled?"

       - "On or about December 31, 1997, did you obtain
       the stolen . . . credit card in the name of Mary
       Breusch?"

       - "On or before December 31, 1997, did you also
       obtain a fraudulent New Jersey driver's license in
       the name of Mary Breusch . . . ?"

       - "On or about December 31, 1997, did you use the
       stolen Mary Breusch credit card along with the . . .
       license to obtain two cash advances . . . one at . ..
       Fleet Bank . . . the other at Corestates Bank . . . ?"

       - "On or about January 7, 1998, did you go to Bailey,
       Banks and Biddle . . . ?"

       - "Did you [and co-defendants] use various stolen
       credit cards and matching identification documents
       to obtain other cash advances and merchandise?"

The earliest specific date mentioned during these
exchanges was more than a month after the November
incidents. The district judge's only other temporal
references, to "on or about," "on or before," and "late 1997,"
are too vague in the context of restitution. "[A] defendant
cannot enter a voluntary and knowing plea to a specific
offense of conviction at the time of the plea allocution and
then wait to have the offense of conviction determined
afterwards at sentencing." Silkowski, 32 F.3d at 690 n.2.

These exchanges, in short, do not meet the test of
specificity necessary to stretch the offense of conviction
from December 31, 1997, as stated in the Information, as
far back as November 20 and 27, 1997. The government
framed the Information to charge conduct that began on
December 31, 1997, and it is bound by its choice to do so.

Trying to broaden the conspiracy, the government points
toward facts that show ties between the November incidents

                                11
and the December activity. The prosecution suggests that
these facts show that the conspiracy embraced these earlier
events. Although those incidents might be relevant for other
sentencing purposes under the Guidelines, restitution is
determined only by statutory provisions, such as 18 U.S.C.
SS 3663 and 3663A. U.S.S.G. S 5E1.1(a)(1).

Although judges normally may use any information they
possess to enhance a sentence, "restitution is a special
case," because the statutes limit restitution to the losses
caused by the offense of conviction. United States v. Kane,
944 F.2d 1406, 1415 n.7 (7th Cir. 1991); see also
Silkowski, 32 F.3d at 688 ("different considerations" govern
the scope of conduct relevant to restitution, in contrast to
the scope of the relevant conduct provision in the
Guidelines). Accordingly, because we look only to the
"specific conduct" supporting the offense of conviction, the
mere fact that the November events may be "factua[lly]
connect[ed]" to the later conspiracy does not make them
legally relevant. Broughton-Jones, 71 F.3d at 1148-49; see
also United States v. Jewett, 978 F.2d 248, 252 (6th Cir.
1992) ("Acts other than [those] described in a count of
conviction, even when committed during the course of or in
furtherance of the same fraudulent scheme, do not state
independent `offenses of conviction.' ").

The government had the opportunity to amend the
Information to include the November 1997 incidents. See
Fed. R. Crim. P. 7(e). Because those events were not
mentioned in the Information or during the plea colloquy,
they may not be considered after the fact to be part of the
defendant's offense of conviction. Kones, 77 F.3d at 69. In
light of all these circumstances, the restitution order
should not have included the sum of $14,100 for the two
November 1997 incidents.

Accordingly, this case will be remanded for appropriate
modification of the order of restitution. In all other respects,
the judgment of the District Court will remain undisturbed.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               12
