United States v. Arnold (Richard Sr.)
701 F. App'x 702
| 10th Cir. | 2017Background
- Arnold and family ran a scheme promising vehicle purchasers that if purchasers surrendered their manufacturer financing-incentive rebates to the Arnolds, a charitable trust would pay off the purchasers’ car loans; the Arnolds instead diverted funds and stopped making payments.
- Victims either resumed payments or surrendered vehicles to lenders; lenders resold repossessed vehicles at prices below outstanding loan balances, creating deficiencies.
- Arnold pleaded guilty to wire fraud and conspiracy; the district court ordered $280,075.15 in restitution to, among others, captive lenders (manufacturers’ financing arms) and successor lenders who assumed the original lenders’ interests.
- The district court’s restitution calculation appears to have been the unpaid principal remaining after repossession and resale proceeds were applied; it did not clearly add accumulated interest to those deficiencies.
- On appeal Arnold challenged (1) that captive and successor lenders were victims under the MVRA and (2) the restitution calculation, arguing he should receive credit for interest he paid prior to repossession.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether captive and successor lenders are "victims" under the MVRA (proximate-cause requirement) | Arnold: Government failed to prove he proximately caused lenders’ losses and did not disprove possible lender/employee complicity (intervening cause). | Government/District Court: No evidence suggested lender complicity; proximate causation satisfied. | Court: Affirmed — lenders are victims; Speakman requires addressing intervening causes only when evidence suggests them, which is absent here. |
| Proper measure of restitution (whether interest already paid by borrowers should reduce principal deficiency) | Arnold: District court should have subtracted interest paid before repossession so lenders do not "collect interest twice." | Government/District Court: Restitution may include accrued interest; subtracting prior interest payments would effectively eliminate lenders’ ability to recover interest owed. | Court: Affirmed — district court’s calculation (outstanding principal after sale proceeds) was permissible and lenders are entitled to interest as a component of restitution; Arnold’s subtraction argument rejected. |
| Whether district court improperly included repossession/processing costs in restitution | Arnold: Some claims included repossession/processing costs. | Government: Record does not support the asserted challenge. | Court: Arnold waived this argument by failing to cite record support; not considered. |
| Whether government had to prove industry practice of successor lenders | Arnold: Government failed to prove successor-lender practice in auto sales system. | Government: Argument inadequately briefed by Arnold; record sufficed. | Court: Argument inadequately briefed; not considered. |
Key Cases Cited
- United States v. Speakman, 594 F.3d 1165 (10th Cir. 2010) (intervening causes can break proximate-cause chain and must be addressed when evidence suggests them)
- United States v. Williams, 292 F.3d 681 (10th Cir. 2002) (accrued interest and repossession fees may properly be included in restitution)
- United States v. Patty, 992 F.2d 1045 (10th Cir. 1993) (prejudgment interest as restitution component to make financial institutions whole)
- United States v. Shengyang Zhou, 717 F.3d 1139 (10th Cir. 2013) (standard of review: MVRA application de novo, factual findings for clear error)
- Bronson v. Swensen, 500 F.3d 1099 (10th Cir. 2007) (failure to adequately brief an argument results in waiver)
- United States v. Washington, 634 F.3d 1180 (10th Cir. 2011) (cited by appellant but argument inadequately briefed and not considered)