United States v. Harvey Franklin, Sr.
595 F. App'x 267
5th Cir.2014Background
- Franklin, superintendent of Greenville Public School District (GPSD), arranged a contract with Teach Them to Read, owned by Edna Goble, funded by DOE grants totaling $1,433,247 for a reading program and consulting services.
- Franklin pled guilty to conspiracy to receive a bribe, bribery concerning programs receiving federal funds, and embezzlement, admitting he accepted about $272,294 in kickbacks and that the products/services were substantially overcharged.
- The probation office’s PSR recommended restitution equal to the full grant amount ($1,433,247). Franklin disputed the restitution amount, arguing GPSD received some value.
- At sentencing the district court examined evidence (including a representative bin) and testimony showing market prices far below amounts paid; it estimated the value retained by GPSD at $232,000 (based on $250 per bin × 928 bins).
- The court ordered restitution of $1,201,247 (grant total minus $232,000) and required an immediate $75,000 lump-sum payment, relying on the PSR’s finding that Franklin had approximately $92,000 in liquid assets.
- Franklin moved to reconsider the lump-sum payment after judgment, claiming assets had been depleted; the district court denied relief because Franklin had not objected to the PSR or shown a material change in circumstances after sentencing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Amount of restitution | Franklin: award overstated because GPSD received some value from the reading program and restitution should be reduced | Government: DOE loss equals grant paid; defendant bears burden to prove any credit for value retained | Court: affirmed $1,201,247 restitution; defendant failed to carry burden to prove greater offset |
| Burden to prove value offset | Franklin: government should bear burden to prove actual loss less than grant | Government/Court: MVRA requires government prove loss but prior Fifth Circuit law shifts burden to defendant to show value credit | Held: burden-shifting applies; Franklin failed to present credible valuation evidence |
| Immediate lump-sum payment ($75,000) | Franklin: lump-sum order improper given changed/insufficient finances | Government: court properly considered PSR financials; Franklin failed to object and thus failed to show changed circumstances | Held: affirmed lump-sum; court reasonably relied on PSR and no material change after sentencing shown |
| Motion to reconsider lump-sum | Franklin: financial change justifies adjustment under 18 U.S.C. § 3664(k) | Government: financial depletion predated sentencing and was not shown to be a post-sentencing material change | Held: motion denied; § 3664(k) inapplicable because no material change after sentence and defendant bore burden to show resources |
Key Cases Cited
- United States v. De Leon, 728 F.3d 500 (5th Cir. 2013) (burden and standard for restitution amount; review for abuse of discretion)
- United States v. Sheinbaum, 136 F.3d 443 (5th Cir. 1998) (placing burden on defendant to prove credit for value bestowed on victim)
- United States v. Calbat, 266 F.3d 358 (5th Cir. 2001) (requirement that court consider defendant’s financial resources when setting restitution schedule)
- United States v. Ollison, 555 F.3d 152 (5th Cir. 2009) (PSR presumed reliable absent competent rebuttal evidence)
- United States v. Carbajal, 290 F.3d 277 (5th Cir. 2002) (same—district court may rely on PSR if defendant fails to rebut)
- United States v. Jones, 664 F.3d 966 (5th Cir. 2011) (victim-of-fraud principle: payments by a program may be unrecoverable even if recipients obtained some benefit)