United States v. LewisUnited States v. Lewis
Appellants Connie S. Lewis, Patsy E. Lewis, and Marion Francis Richey pled guilty to charges arising from a long-standing food stamp fraud scheme. The Lewises’ two sons, Jason and Carson, also pled guilty; they do not appeal. Fоllowing a sentencing hearing, the district court sentenced the five defendants to make restitution to the Department of Agriculture, among other penalties. Connie Lewis and his wife, Patsy Lewis, were each required tо make restitution in the amount of $4,005,399, jointly and severally hable with the other co-defendants. Richey was ordered to make restitution in the
I
The Lewis family conducted its illegal operations at two family-run meat markets, Lewis Meat Market in Alexandria, Louisiana, and Lewis Meat and Slaughter in Pollock, Louisiana. The Alexandria store began accepting food stamps in 1988; the Pollock store accepted stamps beginning in 1992. In the spring of 1995, Richey, Connie Lewis’ cousin, became involved with the Alexandria store with the intent of taking over the business when Lewis “retirеd.” In June 1995, Richey applied for authorization to accept food stamps in the name of CENLA Meats. The application was denied, but Richey continued to work at the Alexandria store and to participate in the food stamp fraud conspiracy-
The scheme was simple. Rather than supplying food to food stamp recipients, the Lewises would illegally purchase food stamp coupons in exchange for cash at a substantial discount to the face value of the coupons. The defendants would then redeem the coupons for their full face value, falsely certifying that they properly aсcepted the coupons in exchange for equivalent amounts of eligible food items.
During the relevant period, the two stores redeemed a total of $4,216,209 in food stamp coupons. Of this total, $436,786 was redeemed between June 1995 and October 1995, the period during which Richey was an active participant in the conspiracy. The coupons redeemed during this period were redeemed by the Pollock store, because the Alexandria store was no longer authorized to accept food stamps. The evidence indicated that the defendants had purchased many of these coupons in Alexandria, and then illegally transferred them to the Pollock store.
In order to calculate the amount of restitution required by the Victim and Witness Protection Act (the ‘VWPA”), 18 U.S.C. §§ 3663 and 3664, the district court deducted five percent from the full face value of coupons redeemed during the period over which each defendant participated in the conspiracy. The five percent represented the most generous estimate suggеsted of the portion of redemptions that represented legitimate exchanges for food.
II
The Lewises argue that the district court should have calculated the required restitution from the face value less the amount they actually paid in cash to food stamp recipients. The Lewises insist that the VWPA “requires that [they] be given credit for the value of the part of the property that was returned to the owner at the time of the illegal transaction.” Connie S. Lewis Br. at 9-10. The Lewises cite various cases in which defendants’ restitution was reduced by the amount of property or value that was returned to the victim of the crime.
The Lеwises paid , approximately 78% of the coupons’ face value in cash to food stamp recipients. On this basis, they argue that more than $3 million was “returned.” The Lewises cite 18 U.S.C. § 3663(b)(1), arguing that this limits the amount of restitution thе court may permissibly order to approximately $800,000.
Under 18 U.S.C. § 3663(b)(1)(A), the court may order the defendant to “return the property to the owner or someone designated by the owner.” If the property cannot feаsibly be returned, the defendant shall make restitution in an amount equivalent to the value of the property, “less the value (as of the date the property is returned) of any part of the property that is returnеd.” 18 U.S.C. § S663(b)(l)(B)(ii).
This provision does not help .the Lewises, because they mistake the nature of the “property” at issue. The VWPA permits the court to order a defendant to make restitution to “any victim.” The Lewises illegally obtained “property” in two steps of their criminal scheme: they illegally obtained food
The amount of “profit” the Lewises made from their illegal scheme is irrelevant to the amount of restitution that is owed. The Lewises illegally obtained in excess of $4 million from the Department of Agriculture, and the Department has suffered a real loss in that amount. The purpose of the food stamp program is to provide nutritional food, not cash, to needy families. The defendants have thwarted that purpose'. While thе defendants’ expenses in conducting their illegal operation undoubtedly reduced the profit they gained, those expenses did not alleviate the loss to the Department of Agriculture. The Lewises’ argument is without merit, and we conclude that the district court properly ordered restitution in the full face amount of the coupons illegally redeemed.
Ill
Marion Richey argues that the district court improperly “extrapolated” information for the Alexandria store between 1988 and August 1993 to determine the amount illegally redeemed during the months in 1995 when he was . a member of the conspiracy, Richey further argues that the 5% credit for legitimаte sales was too small because the evidence “would indicate that more than five percent of the food stamp transactions would be for legitimate sales of meat.” Richey Br. at 7-8.
Under 18 U.S.C. § 3664(d), the govеrnment bears the burden of proving the amount of restitution owed by a preponderance of the evidence, and the district court is to resolve disputes as to the proper amount of restitution. Without deсiding that such an “extrapolation” would be improper in the absence of more definite evidence, we observe that Richey mistakes the method of calculation employed by the district court.
At the sеntencing hearing, Special Agent Gerald Burkhalter testified concerning the facts revealed by the Department of Agriculture’s investigation of the illegal scheme. Burkhalter testified to the dollar amount of foоd stamp coupons that the Lewis family redeemed in each month of the conspiracy. Burkhalter stated that between June 1995 and October 1995 the Lewis operation, through the Pollock store, 1 redeemed a total of $436,786. Rec. 4, 24-25. No extrapolation of data from earlier periods was performed. As an active and knowing member of the conspiracy, Richey is responsible for this, entire amount,- without regard to whether the stamps in question were illegally purchased at the Pollock store or at the Alexandria store where he worked.
Richey’s second challenge to the $415,947 restitution award is an assertion that the gоvernment failed to prove that only five percent of the sales were legitimate. This argument is without merit. The government’s financial analysis indicated that between two and three percent of food stamр coupon redemptions represented legitimate sales. Jason Lewis agreed that this figure was correct to the best of his knowledge. Carson Lewis testified that he believed the figure was three to four pеrcent. Rec. 4, 32. The presentence report accepted a figure of 2.5 percent, and then generously doubled it to five percent to account for possible error. The district court adopted this figure.
The court was required to resolve the factual dispute by a preponderance of the evidence. The defendants presented no evidence that a figure higher than five percent was appropriate. When asked whether two
Richey’s final argument is that the district court abused its discretion in ordering restitution in аn amount he is unable to pay. We find this argument unpersuasive. In determining an amount of restitution to be paid, the district court considers not only a defendant’s present financial resources, but also his future ability to pаy.
United States v. Schinnell,
IV
We conclude that the distriсt court properly determined the amount of restitution to be made by the defendants to the victim of their crime, the United States Department of Agriculture. The sentences imposed by the district court upon Connie S. Lewis, Patsy E. Lewis, and Marion Francis Richey are therefore
AFFIRMED.
Notes
. At this point in the conspiracy, the Alexandria store was no longer authorized to accept food stamps. Despite this, Richey and others continued to purchase food stamps coupons in Alexandria. The defendants would then illegally transfer the coupons to the Pollock store to be redeemed.