26 F.4th 720
5th Cir.2022Background
- Donald Tarnawa was convicted of multiple counts of wire fraud, bank fraud, and money laundering and sentenced to 480 months imprisonment and $13,491,048 restitution; the judgment recommended participation in the BOP's Inmate Financial Responsibility Program (IFRP).
- The original judgment set restitution payments to begin immediately, required at least 10% of gross income during supervision, and "recommended" IFRP deductions while incarcerated.
- Tarnawa filed a § 2241 habeas petition in California, arguing the warden unlawfully required a $30/month IFRP deduction; the district court (after Ninth Circuit remand) ordered Tarnawa exempt from IFRP unless the sentencing court specified a schedule.
- The government moved under 18 U.S.C. § 3664(k) to modify the sentencing judgment, arguing the IFRP exemption materially changed Tarnawa’s economic circumstances and requesting a requirement that 50% of inmate trust deposits be applied to restitution.
- The Eastern District of Texas amended the judgment to require quarterly payments equal to 50% of funds deposited into Tarnawa’s inmate trust account (after a telephone allowance); Tarnawa appealed, and the Fifth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a court modifying restitution under § 3664(k) must expressly apply or make findings under § 3664(f)(2) | United States: § 3664(f)(2) factors govern only initial payment schedules; not required on modification under § 3664(k) | Tarnawa: Court must articulate consideration of § 3664(f)(2) factors on the record when modifying | Held: § 3664(f)(2) factors are not textually required for § 3664(k) modifications; Fifth Circuit declined to import Grant’s rule and relied on Fifth Circuit precedents allowing broader discretion |
| Whether exemption from the IFRP is a "material change in the defendant’s economic circumstances" under § 3664(k) | United States: Exemption is a one-time, material change because Tarnawa was relieved of mandatory deductions and can now retain inmate wages, justifying a revised payment schedule | Tarnawa: Gradual accumulation of prison wages and exemption do not constitute a material change; modification exceeds court’s authority | Held: Exemption constituted an immediate, bona fide material change—different from mere gradual accumulation—so modification was permissible |
| Whether the district court had authority under § 3664(k) to amend payment terms to require periodic payments from inmate trust funds | United States: Court may adjust schedule or require immediate payment upon notification of material change; requiring payments from inmate funds is permissible relief | Tarnawa: Court lacked jurisdiction to impose a payment regime that effectively compelled IFRP-like deductions | Held: Court has authority under § 3664(k) to adjust payment schedule and require payments from inmate trust; the modification was within the court’s power and was affirmed |
Key Cases Cited
- United States v. Grant, 235 F.3d 95 (2d Cir. 2000) (district court must show on the record it considered § 3664(f)(2) factors when setting payment schedule)
- Cani v. United States, 331 F.3d 1210 (11th Cir. 2003) (material change requires bona fide change in financial condition)
- United States v. Blocker, 104 F.3d 720 (5th Cir. 1997) (district courts need not make specific findings on each § 3664 factor if record supports restitution order)
- United States v. Hughes, 914 F.3d 947 (5th Cir. 2019) (questioning in dicta whether gradual accumulation of prison wages constitutes a material change)
- United States v. Rand, 924 F.3d 140 (5th Cir. 2019) (a defendant cannot avoid restitution obligations when he has means to pay and the law provides remedies)