United States v. David Bagdy, 764 F.3d 287

Bagdy pled guilty to wire fraud and was sentenced to 36 months’ imprisonment and three years of supervised release, with restitution of $566,115.57 and a condition to pay at least 10% of gross monthly income toward restitution plus provide financial access to probation.
Bagdy inherited about $434,799.13 in 2012, paid $41,000 initially, and then spent most of the inheritance, leaving around $52,000.
The government filed a § 3664(k) modification motion for restitution, and a tentative settlement negotiations occurred.
The District Court held a restitution hearing and later deemed Bagdy’s depletion of inheritance a potential bad-faith violation, sentencing him to six months’ incarceration.
On appeal, the Third Circuit vacates and remands, declining to affirm based on a nonexplicit condition and citing need for clearer terms; Bearden is not controlling where no explicit nonpayment violation existed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Bagdy’s depletion of his inheritance violated a condition of supervised release	Bagdy violated the restitution condition by dissipating assets	Bearden allows revocation for nonpayment where cannot pay; there was implied bad faith in payment	No explicit condition violated; remand for further proceedings
Whether Bearden governs revocation for bad-faith restitution despite no explicit condition	Bearden supports revocation for willful nonpayment	Bearden requires express nonpayment violation or inability to pay despite efforts	Bearden not controlling here; no explicit condition was violated
Whether the case should be remanded to consider additional potential violations or add contingency terms	Court should address possible other supervised-release violations	No need to broaden beyond the explicit restitution condition	Remand permitted to address any other violations and consider clarifying terms

Bearden v. Georgia, 461 U.S. 660 (U.S. 1983) (good faith in paying restitution depends on explicit terms; indigence not automatic trigger for imprisonment)
United States v. Loy, 237 F.3d 251 (3d Cir. 2001) (need for explicit, clear supervised-release conditions)
United States v. Maloney, 513 F.3d 350 (3d Cir. 2008) (abuse of discretion review; need for clear standards in conditions)