United States v. Faiger Blackwell
695 F. App'x 64
| 4th Cir. | 2017Background
- Faiger Megrea Blackwell pleaded guilty to obstructing the IRS and concealing bankruptcy estate assets after filing for bankruptcy.
- He diverted funds post-petition, some used for legitimate business expenses; creditors and the IRS lost collection opportunities.
- District court calculated loss based on diverted funds and ordered restitution to the IRS.
- Blackwell did not move to withdraw his guilty plea and did not object to the restitution order at sentencing.
- On appeal Blackwell argued actual innocence, challenged the loss calculation (excluding funds used for legitimate expenses and accounting for creditor collateral), and contended tax lien release certificates should reduce restitution.
- The Fourth Circuit affirmed the conviction, loss calculation, and restitution order, rejecting Blackwell’s arguments.
Issues
| Issue | Blackwell's Argument | Government's Argument | Held |
|---|---|---|---|
| Actual innocence of offenses | His diverted funds/use and later tax status mean government couldn’t prove elements | He admitted concealment/diversion in plea; facts support conviction | Rejected; plea and record show concealment and diversion, no withdrawal motion |
| Loss amount: include diverted funds used for legitimate business expenses | Those funds should be excluded from loss because they were used for legitimate business needs | Loss may be measured by intended loss from concealing assets; records support amount | Affirmed; district court’s loss estimate not clearly erroneous and may reflect intended loss |
| Effect of creditor collateral on loss calculation | Collateral held by a creditor should reduce loss amount | Court may reasonably estimate loss; record-supported figures used | Rejected; no clear error in using precise, supported figures for loss |
| Restitution: statutory authority and effect of tax lien release certificates | Restitution should be limited to taxes currently owed; lien release certificates show tax lien extinguished | Restitution may be imposed as condition of supervised release under 18 U.S.C. § 3583(d)/§ 3563(b); lien release does not prove tax paid | Affirmed; wrong statutory citation by district court harmless, Blackwell had notice, and lien releases don’t negate criminal restitution for taxes obstructed |
Key Cases Cited
- United States v. Otuya, 720 F.3d 183 (4th Cir.) (standard of review for loss calculation appeals)
- United States v. Hughes, 401 F.3d 540 (4th Cir.) (loss may be measured by intended loss in bankruptcy fraud)
- United States v. Cloud, 680 F.3d 396 (4th Cir.) (district court need only make a reasonable estimate of loss)
- United States v. Catone, 769 F.3d 866 (4th Cir.) (government bears preponderance burden to prove loss)
- United States v. Olano, 507 U.S. 725 (U.S.) (plain error review framework)
- United States v. Freeman, 741 F.3d 426 (4th Cir.) (identifying applicable restitution statutes and standards)
- United States v. Batson, 608 F.3d 630 (9th Cir.) (§ 3583(d) together with § 3563(b) authorizes restitution as a supervised-release condition)