UNITED STATES OF AMERICA v. GERALD ALEX BOUTCHER
No. 20-4248
United States Court of Appeals for the Fourth Circuit
May 26, 2021
PUBLISHED. Argued: March 12, 2021.
Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Leonie M. Brinkema, District Judge. (1:19-cr-00176-LMB-2)
Argued: March 12, 2021 Decided: May 26, 2021
Before NIEMEYER, KEENAN, and HARRIS, Circuit Judges.
Dismissed by published opinion. Judge Keenan wrote the opinion, in which Judge Niemeyer and Judge Harris joined.
ARGUED: Erin McCampbell Paris, LIPSITZ GREEN SCIME CAMBRIA LLP, Buffalo, New York, for Appellant. Daniel Taylor Young, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee. ON BRIEF: Barry N. Covert, LIPSITZ GREEN SCIME CAMBRIA LLP, Buffalo, New York; Brian Denton West, THE WEST LAW GROUP, P.C., McLean, Virginia, for Appellant. G. Zachary Terwilliger, United States Attorney, Jamar K. Walker, Assistant United States Attorney, Kimberly R. Pedersen, Assistant United States Attorney, Aidan Taft Grano, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.
In this appeal, the defendant challenges the district court‘s orders of restitution and forfeiture, which were imposed based on his involvement in a scheme of unlawful “short sales”1 of three residential properties in Virginia. Pursuant to a plea agreement, Gerald Boutcher pleaded guilty to conspiracy to commit bank fraud, in violation of
I.
Over the course of a few years, Boutcher and his co-conspirator, Alkesh Tayal, worked together to defraud several banks and financial institutions with respect to “short sales” and refinancing transactions for three residential properties. Generally, the scheme involved the following conduct. Initially, Boutcher posed as a buyer in one fraudulent short sale of a property in which Tayal had a financial interest. Tayal intended to retain ownership of the property and, ultimately, to reduce his mortgage payment on that property. Also, the two men engaged in fraudulent short sales of other properties to sell or “flip” the properties at higher prices to gain a profit. In violation of the financial agreements that both men signed with various institutions, Boutcher and Tayal did not disclose their commercial relationship with each other. They also solicited others to pose as representative realtors on the fraudulent transactions, creating the appearance that the transactions were conducted at “arms-length.”
A federal grand jury returned a multiple-count indictment against Boutcher and Tayal. Boutcher was charged with conspiracy to commit bank fraud, in violation of
In his plea agreement, Boutcher agreed to waive “the right to appeal the conviction and any sentence within the statutory maximum . . . on the grounds set forth in
The plea agreement also provided that “restitution is mandatory pursuant to
Additionally, in the plea agreement, Boutcher agreed “to forfeit all interests in any fraud-related asset that [he] own[ed] or over which he exercise[d] control, directly or indirectly.” Boutcher also agreed that the “conduct described in the charging instrument and Statement of Facts provides a sufficient factual and statutory basis for the forfeiture of the property sought by the government.” And finally, Boutcher agreed “to waive all constitutional and statutory challenges to forfeiture in any manner[,] including direct appeal[,] to any forfeiture carried out in accordance with this [agreement] on any grounds, including that the forfeiture constitutes an
At a hearing conducted under Federal Rule of Criminal Procedure 11, Boutcher stated that he had a college degree and was not presently under the influence of drugs or alcohol. Boutcher also acknowledged that he had read the terms of the plea agreement, discussed those terms with his attorney, and understood them. After the district court discussed with Boutcher the terms of the plea agreement‘s global appeal waiver and forfeiture appeal waiver, Boutcher stated that he understood those terms. He also confirmed his understanding that the court could impose a restitution amount higher than the $7,500 amount referenced in the plea agreement, and that he likewise was subject to the imposition of an order of forfeiture. The district court accepted Boutcher‘s guilty plea under the above-stated terms.
The government later proposed a preliminary order of forfeiture against Boutcher in the amount of $227,512.07. In submitting this proposed figure, the government relied on an analysis prepared and submitted to the court by Rachel Bingham, a forensic accountant. Bingham concluded that $227,512.07 represented the profit that Boutcher and Tayal had derived from their fraudulent scheme. Despite Boutcher‘s claim that he had received only $7,500 of the profits, the government asserted that Boutcher should be subject to forfeiture of the full amount of the scheme‘s profits, including all the funds that had been deposited into a business bank account over which both men had “signatory authority.”4
With respect to restitution, the probation officer proposed in the presentence report that restitution be set at $1,012,000, to compensate the five financial institutions identified as victims of the scheme. The government advocated for this amount of restitution based on Bingham‘s analysis. Depending on the particular transaction at issue, Bingham calculated the losses incurred by the various financial institutions based on either (1) the difference between the fraudulent short sale prices for the residential properties and the later refinancing amount obtained, or (2) the difference between the fraudulent short sale price and the sales price reached with a third party. Boutcher objected to Bingham‘s methodology and to the proposed amount of restitution, contending that only one financial institution suffered a loss totaling $3,182.27 in unpaid interest.
The district court initially stated at the sentencing hearing that it intended to set restitution at $7,500 based on the money Boutcher individually received from the scheme. However, the government maintained that if the court rejected the restitution amount of $1,012,000, the court should set restitution at the same amount as the forfeiture figure, $227,512.07, because this amount reflected the money within Boutcher‘s control.5 In accord with the government‘s argument, the district court ordered both restitution and forfeiture in the amount of $227,512.07. Additionally, the court imposed a three-year term of supervised probation.
In its final judgment, the court assessed $227,512.07 in restitution “pursuant to the
of any statute addressing restitution. However, the restitution order entered the same day stated that “pursuant to
II.
A.
Boutcher argues on appeal that the district court made several errors in imposing the orders of restitution and forfeiture. As explained in more detail below, Boutcher contends that the court‘s errors rendered its orders on restitution and forfeiture “illegal,” an argument that Boutcher contends is outside the scope of both the global appeal waiver and the forfeiture waiver. In response, the government asks us to dismiss Boutcher‘s appeal, contending that his arguments are barred by the terms of both waiver provisions.
We review an appellate waiver de novo to determine whether the waiver is enforceable. United States v. McLeod, 972 F.3d 637, 640 (4th Cir. 2020); United States v. Adams, 814 F.3d 178, 182 (4th Cir. 2016). “When the government seeks to enforce an appeal waiver and has not breached the plea agreement, we will enforce the waiver if it is valid and if the issue being appealed falls within” the scope of the waiver. United States v. Beck, 957 F.3d 440, 445 (4th Cir. 2020).
A “valid” appeal waiver is one entered by the defendant knowingly and intelligently, a determination that we make by considering the totality of the circumstances. United States v. Thornsbury, 670 F.3d 532, 537 (4th Cir. 2012). When a district court questions a defendant during a Rule 11 hearing regarding an appeal waiver and the record shows that the defendant understood the import of his concessions, we generally will hold that the waiver is valid. United States v. McCoy, 895 F.3d 358, 362 (4th Cir. 2018).
In the present case, Boutcher does not dispute the validity of either the global appeal waiver or the forfeiture appeal waiver. Our review of the record, including the language of the waivers, the court‘s colloquy with Boutcher, and Boutcher‘s statements to the court demonstrating his understanding of the rights he agreed to waive, confirms that Boutcher executed the waivers knowingly and intelligently. Thus, we conclude that the waiver provisions in the plea agreement are valid.
We therefore turn to consider whether Boutcher‘s arguments on appeal fall within the scope of those waiver provisions. When we interpret plea agreements, we apply principles of “contract law to ensure that each party receives the benefit of the bargain,” and look to the plain language of the agreement, construing it in the “ordinary sense.” United States v. Davis, 714 F.3d 809, 814 (4th Cir. 2013) (citation omitted).
Because plea agreements necessarily implicate a defendant‘s constitutional rights, we analyze those agreements with a greater degree of scrutiny than we would evaluate a contract in a civil context. Id. In conducting our review, we hold the government, which has a greater negotiating position, to a higher standard for any imprecise language or ambiguity that appears in plea agreements. See id. at 814-15. Nonetheless, courts cannot
rewrite
These general principles inform our analysis in the present case. We also are mindful of the fact that Boutcher obtained the benefit of the government‘s voluntary dismissal of the conspiracy to commit money laundering charge, in exchange for his numerous concessions outlined above. We therefore turn to consider whether the waivers contained in the plea agreement bar Boutcher‘s arguments challenging the restitution and forfeiture orders.
B.
With respect to restitution, Boutcher argues that the district court committed reversible error: (1) in failing to identify the statutory basis for restitution in its judgment order; and (2) in failing to calculate the victims’ losses under the required standard.6 Despite the broad language in the global appeal waiver, in which Boutcher agreed to waive his appeal of his sentence “on any ground,” Boutcher contends that the court‘s errors were acts exceeding the court‘s authority, rendering the restitution order “illegal” and outside the scope of the global appeal waiver. We disagree with Boutcher‘s position.
Initially, we reject Boutcher‘s contention that our decision in United States v. Broughton-Jones, 71 F.3d 1143 (4th Cir. 1995), compels a conclusion that the district court‘s failure to cite the Restitution Act in the judgment order left the court without authority to impose restitution. In Broughton-Jones, we refused to enforce an appeal waiver when the defendant challenged a restitution order imposed under the Victim and Witness Protection Act (VWPA),
Here, however, Boutcher does not dispute that he was subject to mandatory restitution under the Restitution Act. Indeed, his plea agreement makes clear that the Restitution Act provided the statutory basis for restitution in this case. Moreover, during his plea colloquy, Boutcher confirmed that he understood and consented to the terms of his plea agreement, including the requirement of mandatory restitution under the Restitution Act.
Consistent with the plain language of Boutcher‘s plea agreement, the district court‘s restitution order, which was entered on the same day as the final judgment order, stated
that restitution was ordered “pursuant to” the Restitution Act. The restitution order further stated that under “18 U.S.C. § 3663A(a)(1) [the Restitution
Boutcher argues, nevertheless, that the district court exceeded its authority in fixing restitution at $227,512.07 on the basis of Boutcher‘s purported profit, instead of calculating the victims’ losses as required under the Restitution Act.7 Any order of restitution made under the Restitution Act must be issued in accordance with
A defendant‘s economic gain from his criminal activity generally is an inappropriate basis on which to calculate the victims’ losses for purposes of restitution. Harvey, 532
F.3d at 340-41 (citing United States v. Galloway, 509 F.3d 1246 (10th Cir. 2007)). Indeed, in Harvey, we concluded that the district court “abused its discretion” by calculating restitution using this inappropriate standard. Id. at 341. Notably, however, we did not hold that the court exceeded its authority in ordering restitution on this basis, but merely discussed the error in terms of the court‘s exercise of its discretion. Id.
Here, even if we assume that the district court erroneously fixed restitution based on the amount Boutcher profited from the scheme, such error did not impact the court‘s authority to order restitution under the Restitution Act. Cf. Beck, 957 F.3d at 444-45 (holding that a defendant‘s argument challenging the statutory basis for his conviction, on the ground that the statute did not define a criminal offense, called into question the court‘s authority to convict and fell outside the scope of the appeal waiver). Instead, any such mistake was merely a legal error involving the methodology employed by the court. See Cohen, 459 F.3d at 497-500 (holding that because the district court‘s restitution award was within the scope of the court‘s authority under the Restitution Act, the defendant‘s challenge to the amount of restitution ordered fell within the scope of his appeal waiver).
We also observe that the probation officer recommended, and the government urged based on Bingham‘s analysis, that the court impose more than $1 million in restitution based on the total losses incurred by the victims. Although Boutcher disputed that loss amount and method of calculation, the district court, on this record, could have imposed
that much higher amount of restitution.8 Thus, by rejecting
C.
With respect to the forfeiture order, Boutcher asserts that the “district court exceeded its authority” by imposing forfeiture in the amount of $227,512.07, because Tayal received most of those funds placed in their shared business bank account. Boutcher argues that he was subject to forfeiture only for the amount of $7,500 that he personally profited from the conspiracy, not for the proceeds he never received that had been deposited into
the account.9 Thus, Boutcher contends that the district court lacked authority to enter the forfeiture order against him for the entire amount of $227,512.07.
We reject Boutcher‘s attempt to avoid the forfeiture appeal waiver and the other terms of his plea agreement. Under the plain language of the plea agreement, Boutcher agreed to “forfeit all interests in any fraud-related asset that [he] own[ed] or over which he exercise[d] control, directly or indirectly.” Boutcher also agreed that the statement of facts provided a valid basis for the forfeiture of property sought by the government. The statement of facts makes clear that Tayal and Boutcher “both had signatory authority for” and thus, “control” of, all the funds in their shared business bank account. Boutcher therefore consented that all the assets in the bank account could be included in an order of forfeiture entered against him.10
Based on these clear concessions that Boutcher made in the plea agreement, we conclude that Boutcher is precluded by his forfeiture appeal waiver from challenging the amount of forfeiture on appeal. As noted above, under the forfeiture appeal waiver, Boutcher agreed to waive “all constitutional and statutory challenges to forfeiture
III.
For these reasons, we grant the government‘s motion to dismiss Boutcher‘s appeal, because his arguments are barred by the appeal waiver provisions in his plea agreement.
DISMISSED