14‐820‐cr United States v. Stevens

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 25th day of October, two thousand sixteen.

PRESENT: RALPH K. WINTER, DENNY CHIN, CHRISTOPHER R. DRONEY, Circuit Judges. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

UNITED STATES OF AMERICA, Appellee,

v. 14‐820‐cr

TROY D. STEVENS, JR., Defendant‐Appellant.

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FOR APPELLEE: MARTIN E. COFFEY, Assistant United States Attorney (Peter A. Norling, Assistant United States Attorney, on the brief), for Robert L. Capers, United States Attorney, Eastern District of New York, Brooklyn, New York.

FOR DEFENDANT‐APPELLANT: STEVEN Y. YUROWITZ, New York, New York.

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

New York (Irizarry, C.J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment is AFFIRMED in part and the case is

REMANDED for further proceedings consistent with this order.

Defendant‐appellant Troy D. Stevens, Jr., appeals the district courtʹs

judgment entered March 5, 2014 to the extent it sentenced him to 63 monthsʹ

imprisonment for bank fraud under

and ordered him to pay restitution

to his former partnership, Kinpit Associates (ʺKinpitʺ), under the Mandatory Victims

Restitution Act (ʺMVRAʺ), 18 U.S.C. § 3663A.1 We hold that Stevens waived his right to

appeal his prison sentence, and accordingly affirm that portion of his sentence. As to

the district courtʹs restitution order as to Kinpit, we remand the case for the district

court to conduct a hearing to answer certain factual questions. We assume the partiesʹ

familiarity with the facts and the issues on appeal.

Stevens was the general partner of Kinpit, a limited partnership formed to

own and operate apartment buildings in New York City. Between July 7, 2000 and May

1 Stevens was also convicted of aiding and assisting in the preparation of a false income tax return under

(2) and was sentenced to 12 monthsʹ imprisonment and ordered to pay $377,141.00 in restitution to the Internal Revenue Service. Stevens has not appealed this conviction and sentence. ‐ 2 ‐

16, 2003, without knowledge or approval of the limited partners, Stevens fraudulently

obtained loans and mortgages for Kinpit using a forged partnership agreement and

consent form.2 Stevens then consolidated the initial four loans into a single $4.6 million

loan issued by North Fork Bank and later acquired by Capital One Bank NA (the

ʺCapital One loanʺ) and pledged Kinpitʹs buildings as collateral.3 In 2005, Kinpitʹs

limited partners filed suit against Stevens for breach of contract, breach of fiduciary

duties, misuse of partnership assets, and fraud. See Garber v. Stevens, No. 601917/05

(N.Y. Sup. Ct. 2005). In October 2012, the parties settled the civil suit as Stevens

conveyed his 50% interest in Kinpit to the limited partners in exchange for a release of

all claims. On August 22, 2013, Kinpit sold its buildings for $10.35 million. Shortly

thereafter, Kinpit paid off the Capital One loan in full.

Stevens was indicted on October 2, 2012, pled guilty on May 28, 2013, and

sentenced as set forth above on February 28, 2014.

I. Imprisonment

In his plea agreement, Stevens waived his right to appeal a sentence that

was at or below 87 monthsʹ imprisonment. ʺWaivers of the right to appeal a sentence

are presumptively enforceable.ʺ United States v. Riggi,

(2d Cir. 2011)

2 Stevens was also charged with fraudulently obtaining a $600,000 loan on May 9, 2005. While he did not plead guilty to this count, the district court considered the $600,000 loan as relevant conduct when determining Stevensʹs intended loss. 3For convenience, we treat the consolidated loan ‐‐ as do the parties ‐‐ as having been made by Capital One. ‐ 3 ‐

(quoting United States v. Arevalo,

(2d Cir. 2010)) (internal quotation marks

omitted). Exceptions to this rule ʺoccupy a very circumscribed area of our

jurisprudence.ʺ United States v. Gomez‐Perez,

(2d Cir. 2000). Stevens

argues that his plea is invalid because it was not knowing, voluntary, or competent

because his counsel erroneously informed him that he was subject to an 18‐level loss

enhancement under the Sentencing Guidelines when he claims he was not.

On the present record, Stevens has not demonstrated that his plea was not

entered knowingly and voluntarily. Stevens signed the plea agreement, affirming that

he entered into its terms knowingly and voluntarily. Stevens acknowledged at his plea

hearing that he had an adequate opportunity to review the plea agreement with his

attorney, he understood everything in the plea agreement, and he understood that the

estimated guidelines range was 63 to 78 months. Stevens also stated that he was

pleading guilty voluntarily, and the district court was satisfied that Stevens understood

the nature of the charges and the consequences of the plea, and that his plea was

entered voluntarily. At sentencing, which occurred over two days on December 2, 2013

and February 28, 2014, Stevensʹs counsel twice agreed to the sentencing guidelines

range. Stevens is bound by the plea waiver. To the extent that Stevens argues that his

guilty plea was involuntary due to ineffective assistance of counsel, we decline to hear

the claim now. He may raise the issue in a motion for relief pursuant to

. See United States v. Gaskin,

, 467‐68 (2d Cir. 2004).

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II. Restitution

Stevens argued to the district court, and maintains on appeal, that he owes

no restitution to Kinpit because Capital One Bank, the victim of the bank fraud, was

made whole when it received payment for the full amount of the Capital One loan from

Kinpit after the sale of the property. Stevens further argues that, to the extent his bank

fraud caused any harm to Kinpit, Kinpit agreed to release him from any claims related

to the fraudulently obtained mortgage in exchange for Stevensʹs surrender of his 50%

interest in Kinpit.

We review a district courtʹs order of restitution for abuse of discretion.

United States v. Boccagna,

(2d Cir. 2006). ʺTo identify such abuse, we

must conclude that a challenged ruling rests on an error of law, a clearly erroneous

finding of fact, or otherwise cannot be located within the range of permissible

decisions.ʺ United States v. Pearson,

(2d Cir. 2009) (quoting Boccagna,

). We conclude that the district court did not make sufficient factual

findings, which are necessary to our review of the restitution award.

The MVRA makes restitution mandatory for certain categories of crimes,

including those that cause property loss to their victims. 18 U.S.C. § 3663A(a); United

States v. Thompson,

(2d Cir. 2015). ʺ[R]estitution is authorized only for

losses that [were] . . . directly caused by the conduct composing the offense of

conviction and only for the victimʹs actual loss.ʺ United States v. Marino,

,

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319‐20 (2d Cir. 2011) (internal quotation marks and citations omitted). Because

restitution is intended to make the victim whole, it must be based only on the actual

loss caused by the scheme. 18 U.S.C. § 3663A(b)(1); United States v. Lacey,

(2d Cir. 2012). Restitution is not intended to provide a victim with a windfall, that

is, more than it actually lost. Thompson,

.

In cases involving monetary loss, the actual loss calculation must take into

account ʺthe value (as of the date the property is returned) of any part of the property

that is returned.ʺ 18 U.S.C. § 3663A(b)(1)(B); accord Thompson,

(ʺUnder

the plain text of § 3663A(b), [a defendantʹs] total restitution liability under the MVRA is

. . . the value of the stolen property . . . minus the value of what he returned to the

victims . . . .ʺ). In other words, in a mortgage fraud case where banks receive the

pledged collateral upon foreclosure, in calculating restitution, the district court must

credit any value of the collateral. United States v. Lacey,

; see also United

States v. Cavallo,

(11th Cir. 2015) (reversing and remanding

ʺ[b]ecause the restitution amount ordered by the district court does not take into

account the value of the collateral properties to the victims, [and thus] does not

represent the actual loss to the victims, but instead confers a windfall on them.ʺ).

In some cases, as here, a victim may receive reimbursement for its losses

from a third party prior to entry of a restitution order. Any such third‐party

compensation should not affect the amount of the award. Thompson,

.

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Pursuant to § 3664(j)(1), where a third party has assumed the victimʹs losses by

reimbursing the victim, the court is to order payment of restitution to the third party.

Id. But the third‐party provider of compensation is not equivalent to a victim, and ʺany

losses suffered by those parties in the course of compensating a victim cannot increase a

district courtʹs calculation of the defendantʹs restitution obligations under § 3663A(b).

Id. at 279. ʺ[A]ny restitution paid by a defendant to a third party [compensator] cannot

exceed the amount the defendant could lawfully be ordered to pay the original victim.ʺ

Id. (emphasis added).

Here, Capital One was a victim of Stevensʹs fraud, as it made a loan to

Kinpit based on his fraud. But then Kinpit sold the properties in question, using some

of the proceeds to repay Capital One in full for the loan. The district court ordered

Stevens to pay restitution on account of Capital Oneʹs losses to Kinpit.

We are unable, because of a lack of clarity in the record, to determine

whether the district court properly applied the principles set forth above. We are

uncertain, for example, as to the following:

1. Was the district court treating Kinpit as a victim of Stevensʹs bank fraud

for purposes of the MVRA, or as a third‐party compensator?

2. What were Capital Oneʹs ʺactual lossesʺ?

3. Did the restitution award include compensation for Kinpitʹs losses (as

opposed to Capital Oneʹs losses)?

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4. Did the restitution award exceed the amount of Capital Oneʹs actual losses

resulting from Stevensʹs bank fraud?

5. Were any of the loan proceeds diverted by Stevens, and, if so, how much

went to Kinpit?

6. Is Kinpit is receiving a windfall (i.e., is Stevens being ordered to pay

monies to Kinpit he has already paid)?

7. Was the settlement agreement between Stevens and Kinpit intended to

compensate Kinpit for its losses resulting from Stevensʹs bank fraud, and

if so, to what extent?

Accordingly, we seek supplementation of the record by the district court pursuant to

our practice in United States v. Jacobson,

(2d Cir. 1994), regarding the above

questions. We remand to the district court such jurisdiction as is necessary to answer

the questions above. This Court (and this panel) shall retain jurisdiction over this

matter. Upon a decision by the district court, full jurisdiction will be restored to this

Court and this panel by either party informing us by letter of the district courtʹs

decision. The parties will file simultaneous briefs no later than within thirty days of the

receipt of such a letter by the Court. Further oral argument will be at the Courtʹs

discretion.

* * *

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For the foregoing reasons, the district courtʹs sentence is AFFIRMED to

the extent that it imposed imprisonment for Stevensʹs bank fraud, and the case is

REMANDED to the district court for further proceedings consistent with this order.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

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