United States v. Lee
659 F.3d 619
7th Cir.2011Background
- Lee pleaded guilty in 1997 to fraud, money laundering, and perjury and was sentenced to 78 months’ imprisonment, five years of supervised release, and substantial restitution and forfeiture obligations.
- After release from supervision, most restitution remained unpaid and the government sought a turnover order targeting Lee’s retirement-plan distributions.
- The turnover order was issued under the MVRA, enforcing restitution as a civil-like judgment; the order was entered long after judgment and after Lee’s term of supervised release.
- Lee challenged the turnover order, arguing the CCPA’s 25% cap on garnishments applies to retirement-plan distributions and that the order should be limited accordingly.
- The district court treated retirement-plan distributions as not governed by the CCPA’s 25% cap, leading to appellate review on whether such funds are subject to the cap.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal is timely | Lee argues timeliness under Rule 4(a)(1) likely. | Government contends Rule 4(a)(1) applies to collateral civil actions; timeliness is satisfied. | Timely under Rule 4(a)(1) as a postjudgment collateral matter. |
| Whether MVRA-enforced turnover limits apply to retirement distributions | MVRA allows enforcement against all property to satisfy restitution. | Distributions from plans are not earnings or subject to 25% cap. | Distributions are earnings under CCPA and capped at 25%. |
| Whether CCPA 25% cap applies to periodic retirement payments | Periodic payments from pension/retirement programs are within CCPA earnings. | CCPA cap does not apply to non-wage retirement funds. | CCPA 25% cap applies to periodic retirement payments. |
| Remand posture | District court’s interpretation should be revisited in light of CCPA interpretation. | No error in applying MVRA procedures. | Vacated turnover order and remanded for further consistent proceedings. |
Key Cases Cited
- Kokoszka v. Belford, 417 U.S. 642 (1974) (earnings not all assets traceable to compensation; tax refund analyzed for garnishment limits)
- United States v. DeCay, 620 F.3d 534 (5th Cir. 2010) (CCPA earnings include periodic payments under a pension/retirement program)
- United States v. Kollintzas, 501 F.3d 796 (7th Cir. 2007) (collection proceedings within criminal docket permitted; ancillary to criminal case)
- United States v. Apampa, 179 F.3d 555 (7th Cir. 1999) (appeals from criminal orders may be treated as civil where collateral to punishment)
- United States v. Taylor, 975 F.2d 402 (7th Cir. 1992) (distinguishing civil/ criminal appeal lines in postjudgment orders)