BERYL A. HOWELL, Chief District Judge.
The defendant, Iesha Armstrong, is incarcerated at Federal Medical Center Carswell ("FMC Carswell"), a Bureau of Prisons ("BOP") facility in Fort Worth, Texas. Pending is a motion by the government for an order authorizing the BOP to turn over "to the Clerk of this Court a reasonable portion of the funds" in the defendant's Inmate Trust Account, which contains over $4,000, "toward satisfaction of the remaining criminal restitution obligation in this case," which is about $6,000. United States' Motion for Order Authorizing Restitution Payment from Inmate Trust Account ("Gov't's Mot.") at 1, ECF No. 84.
In 2018, the defendant's restitution payments were limited to $50 per quarter during her term of incarceration. See United States v. Armstrong, No. 09-cr-135 (BAH), 2018 WL 5923913, at *7 (D.D.C. Nov. 13, 2018). This adjustment was made to the defendant's restitution order under 18 U.S.C. § 3664(k) after the defendant submitted a handwritten letter seeking a reduction in her restitution payments because BOP had gradually increased the amount withdrawn from her Inmate Trust Account from $25 quarterly in March 2018 to $271 per month by November of that year. See Def.'s Letter, received Oct. 4, 2018 ("Def.'s Letter I"), ECF No. 74.; see also Def.'s Letter, received Nov. 8, 2018 ("Def.'s Letter II") at 1, ECF No. 80.
On August 13, 2019, ten months after her restitution payments were capped at $50 per quarter, the defendant submitted another letter stating that "[t]he BOP . . . has frozen my account" and requesting access to "my entire $4,300" along with an order "that my $50 quarterly . . . payment schedule" should "remain the same." Def.'s Letter, received Aug. 13, 2019 ("Def.'s Letter III"), ECF No. 82. The government subsequently filed the pending motion.
For the reasons that follow, the defendant's restitution payment schedule shall be adjusted to require a payment of $4,000 to satisfy part of her outstanding restitution obligation. BOP is authorized to turn over to the Clerk of this Court that $4,000 sum from the defendant's Inmate Trust Account. The defendant's restitution payments shall otherwise continue to be limited to $50 per quarter during her term of incarceration.
On a guilty plea to armed bank robbery and unlawful possession of a firearm in violation of 18 U.S.C. § 922(g)(1), § 924(a)(22), and § 2113(a), (d), the defendant was sentenced by Judge Richard W. Roberts in 2010 to serve 84 months' imprisonment and 48 months' supervised release and to pay $8,350.00 in restitution. See Judgment ("2010 Judgment") at 2, 6, ECF No. 46.
On her guilty plea in the District of Maryland to armed bank robbery, see 18 U.S.C. § 2113(a), (d), and to using a firearm during a crime of violence, see 18 U.S.C. § 924(c), the defendant was sentenced on February 9, 2018 to a total of 168 months', or 14 years', imprisonment; no restitution was ordered. See Judgment on Revocation at 3, ECF No. 72; Probation Petition at 2, ECF No. 65; Judgment, United States v. Armstrong, No. 16-cr-00601-TDC, at 5 (D. Md. Feb. 9, 2018), ECF No. 48. For twenty-three violations of supervision, which the defendant conceded at a hearing on those violations, see Minute Entry (Sept. 7, 2018), she was sentenced in this Court to 18 months' incarceration, to be served concurrently with her sentence on the guilty plea in the District of Maryland, see Judgment on Revocation at 4.
As already described, the defendant submitted a handwritten letter in October 2018 explaining that BOP had gradually increased the amount withdrawn from her Inmate Trust Account through the Inmate Financial Responsibility Program ("IFRP") and requesting that her quarterly restitution payments be limited to $50. See Def.'s Letter I.
Defendant's August 2019 letter stated that "[t]he BOP . . . ha[d] frozen" her "account," prompting her to request access to the "entire $4,300" in the account as well as an order that BOP adhere to the previous restitution order. Def.'s Letter III. In the letter, the defendant also stated that her "independent financial situation ha[d] not changed" since the entry of the November 2018 order. Id. "I am still dependent on my family for any substantial money that is placed on my account," and "[m]y mother, who is the primary person sending me money[,] is 70 years old and lives on retirement income," the letter explained. Id.
In response to an order to show cause "how such BOP action complies with the restitution order in effect in this case," Minute Order (Aug. 13, 2019), the government confirmed that BOP had frozen defendant's account "pursuant to regulations related to the inmate trust account and a request of the U.S. Attorney's Office," Response to Court's Aug. 13, 2019 Minute Order ("Gov't's Resp. II") at 1, ECF No. 85.
Simultaneous with this response, the government filed the pending motion seeking authorization for BOP to transfer a lump sum, up to $6,048, from the defendant's Inmate Trust Account to the Clerk of this Court toward satisfaction of the remaining restitution obligation on the 2010 judgment. See Gov't's Mot. at 1. Defendant, represented by counsel appointed by the Court, opposed the motion, see Def.'s Opp'n to United States' Mot. for Order Authorizing Restitution Payment from Inmate Trust Account ("Def.'s Opp'n"), ECF No. 90, and the government submitted a reply and supplemental memorandum in support of its motion, see Gov't's Reply and Supplemental Mem. Supp. Mot. for Order Authorizing Restitution Payment from Inmate Trust Account at 2 ("Gov't's Reply"), ECF No. 92.
The government raises four legal theories in support of its motion. The first two theories — that the government can secure the defendant's total outstanding restitution obligation by enforcing a statutory judgment lien on the defendant's Inmate Trust Account or by using a common law right of offset, see Gov't's Mot. at 7-8, 11-12 — conflict with the restitution order in this case and misunderstand the respective powers of the courts and the executive branch in ordering and administering restitution. The government's third and fourth legal theories derive from the Mandatory Victims Restitution Act of 1996 ("MVRA"), 18 U.S.C. § 3663A, which was codified "in scattered sections of 18 U.S.C.," United States v. Hunter, 786 F.3d 1006, 1008 (D.C. Cir. 2015), and, pursuant to § 3663A(d), MVRA restitution orders "are issued and enforced in accordance with section 3664," of the earlier enacted Victim and Witness Protection Act ("VWPA"). Under § 3664(n), the government claims, the deposits into the defendant's account qualify as "substantial resources" received "during a period of incarceration" that the defendant "shall be required to apply the value of . . . to any restitution . . . still owed." 18 U.S.C. § 3664(n); see also Gov't's Mot. at 8-9. Finally, the government invokes § 3664(k) to ask for an adjustment in the payment schedule based on a "material change in the defendant's economic circumstances." 18 U.S.C. § 3664(k); see Gov't's Mot. at 10-11. Section 3664(n)'s mandate does not apply here and, aside from authorizing the $4,000 payment, the Court declines to adjust the payment schedule already set.
The MVRA "govern[s] federal court orders requiring defendants convicted of certain crimes to pay their victims restitution." Lagos v. United States, 138 S.Ct. 1684, 1687 (2018); see also 18 U.S.C. § 3663(a)(1) (providing that a "court shall order" restitution in certain cases). Section 3664 of the MVRA lays out the "[p]rocedure for issuance and enforcement of [an] order of restitution." 18 U.S.C. § 3664. Under that provision, "[u]pon determination of the amount of restitution owed to each victim, the court shall . . . specify in the restitution order the manner in which, and the schedule according to which, the restitution is to be paid, in consideration of" multiple factors, including the defendant's "financial resources" and "projected earnings." Id. § 3664(f)(2). A court has considerable discretion to structure the restitution order's schedule into "payments at specified intervals" or a "single, lump sum payment." Id. § 3664(f)(3)(A).
"A sentence that imposes an order of restitution is a final judgment notwithstanding the fact that . . . such sentence can subsequently be . . . corrected . . . appealed and modified . . . amended . . . [or] adjusted . . . ." Id. § 3664(o). Each of these processes contemplates court action. See id. (referencing FED. R. CRIM. P. 35, 18 U.S.C. § 3664(d)(5), among other provisions requiring judicial action). As is relevant here, § 3664(k) sets out a process for notification "of any material change in the defendant's economic circumstances that might affect the defendant's ability to pay restitution." Id. § 3664(k). "Upon receipt of the notification, the court may, on its own motion, or the motion of any party . . . adjust the payment schedule, or require immediate payment in full, as the interests of justice require." Id. Section 3664(n) further mandates that "[i]f a person obligated to provide restitution, or pay a fine, receives substantial resources from any source, including inheritance, settlement, or other judgment, during a period of incarceration, such person shall be required to apply the value of such resources to any restitution or fine still owed." Id. § 3664(n).
"Sections 3663 and 3664 of Title 18 clearly impose on the court the duty to fix the terms of restitution." United States v. Johnson, 48 F.3d 806, 808 (4th Cir. 1995); see also United States v. Martinez, 812 F.3d 1200, 1202 (10th Cir. 2015) ("By statute, it is the district court — not the government — that determines how a defendant is to pay restitution."); United States v. Merric, 166 F.3d 406, 409 (1st Cir. 1999) ("[I]t is the inherent responsibility of the judge to determine matters of punishment and this includes final authority over all payment matters."). "The government," on the other hand, "has statutory authority to enforce . . . the terms of a restitution order" set by the court. Martinez, 812 F.3d at 1207; see also 18 U.S.C. § 3664(m)(1)(A) ("An order of restitution may be enforced by the United States . . . .").
The government's motion first invokes the statutory lien created for the United States on imposition of a sentence ordering restitution. See Gov't's Mot. at 7; see also 18 U.S.C. § 3613(c) ("[A]n order of restitution . . . is a lien in favor of the United States on all property and rights to property of the person fined."). The government claims that the notice lien it filed in the defendant's name for the enforcement of the restitution obligation in the 2010 Judgment "impacts the Defendant's Inmate Trust Account," Gov't's Reply at 2, such that the MVRA allows the government to garnish that property as part of its authority to "enforce this judgment lien `by all available and reasonable means,'" id. at 3 (quoting 18 U.S.C. § 3664(m)(1)(A)).
Section 3664(m), the provision the government relies on, actually states that "[a]n order of restitution may be enforced by the United States . . . by all . . . available and reasonable means." Id. § 3664(m)(1)(A) (emphasis added). As the fuller text makes clear, § 3664(m) defines mechanisms for enforcement of a court's "order of restitution," circumscribing the government's authority to enforce its judgment lien to the terms of the restitution order. See Martinez, 812 F.3d at 1207 (stating, in rejecting the argument that the government may garnish more of the defendant's wages than the restitution order's payment schedule allowed, that "[t]he government has statutory authority to enforce only the terms of a restitution order, not to take an enforcement action that would exceed a restitution order's payment terms."); see also id. at 1202 ("The government can enforce a restitution order only in a manner that does not exceed the payment obligations set out in the restitution order."); United States v. Hughes, 914 F.3d 947, 949 (5th Cir. 2019) ("When a restitution order specifies an installment plan, unless there is language directing that the funds are also immediately due, the government cannot attempt to enforce the judgment beyond its plain terms absent a modification of the restitution order or default on the payment plan."); cf. United States v. Bikundi, No. 14-CR-00030 (BAH), 2017 WL 10439588, at *7 n.8 (D.D.C. June 28, 2017) ("BOP is bound by the court-ordered restitution payment schedule and may not seek an amount greater than ordered."). Indeed, the government's reply brief seems to concede that § 3664(m) merely addresses "collection mechanisms." Gov't's Reply at 3 (quoting United States v. Gallion, 504 F. App'x 373, 376 (6th Cir. 2012)). That the government may not enforce a restitution obligation beyond the terms of payment set in the restitution order follows not just from the text of § 3664(m) but also from the principle that a court may not delegate its authority to set the terms of restitution to executive branch agencies. See supra note 4.
The judgment lien and § 3664(m), then, cannot support the government's request for a lump sum payment beyond the $50 owed per quarter under the governing restitution order.
The government's next theory — that common law offset "permit[s] BOP to seize monies from the Defendant's Inmate Trust Account to pay her restitution obligation," Gov't's Mot. at 12 — is similarly flawed. The common law right of offset "allows entities that owe each other money to apply their mutual debts against each other, thereby avoiding the absurdity of making A pay B when B owes A." Citizens Bank of Md. v. Strumpf, 516 U.S. 16, 18 (1995) (internal quotation marks omitted). Here, the government says, "[t]he Defendant owes the United States restitution, and the United States owes Defendant money from her Inmate Trust Account. The most expedient approach would allow the United States to credit the Defendant for her restitution payment, which the United States could remove from her inmate account." Gov't's Mot. at 12.
Setting aside the serious question whether common law right of offset would apply to restitution debts or to funds held in an Inmate Trust Account, common law offset, like enforcement of the statutory lien, is a mechanism of collection.
Next, the government argues that under 18 U.S.C. § 3664(n), "the Defendant's resources received from any source during her term of incarceration must be applied to her outstanding restitution obligation." Gov't's Mot. at 8.
The defendant and the government agree that the government's ability to use § 3664(n) to garnish or otherwise seize funds depends on the terms of the restitution order. See Def.'s Opp'n at 5; Gov't's Reply at 7. Where a restitution order requires immediate payment of the full sum owed or sets out a flexible payment plan, § 3664(n) may apply to allow the government to garnish the defendant's "substantial resources." See United States v. Williams, 898 F.3d 1052, 1055 (10th Cir. 2018) (stating this in a discussion of garnishment generally and not § 3664(n) in particular); United States v. Poff, 781 F. App'x 593, 594 (9th Cir. 2019) (upholding a district court's order allowing the government to seize funds under § 3664(n) to the extent those funds were disability benefits where the restitution order provided for immediate payment, see United States v. Poff, No. CR09-0160JLR, 2016 WL 3079001, at *1 (W.D. Wash. June 1, 2016)); United States v. Lemberger, 673 F. App'x 579, 580 (7th Cir. 2017) (relying on § 3664(n) to compel payments where payment of restitution was ordered immediately); United States v. Cunningham, 866 F.Supp.2d 1050 (S.D. Iowa 2012) (allowing full amount of defendant's disability payments to be garnished where lump sum payment of restitution was required); United States v. Brewer, No. 96-CR-294-K (02), 2016 WL 6652996, at *4, 1 (N.D. Tex. Oct. 21, 2016), report and recommendation adopted, No. 3:96-CR-294-K (02), 2016 WL 6650948 (N.D. Tex. Nov. 10, 2016) (granting a motion under § 3664(n) to allow seizure of inheritance placed in Inmate Trust Account where restitution order required payments of "at least $150" monthly); United States v. Smalls, No. 196CR00075MRDLH1, 2016 WL 6582473, at *1 (W.D.N.C. Nov. 4, 2016) (authorizing garnishment of inmate trust account under § 3664(n) of "current balance owed for criminal restitution"). Garnishment is "improper," however, "where the government is seeking payment of an amount that is not currently due" under the restitution order. Williams, 898 F.3d at 1055 (discussing Martinez, 812 F.3d at 1201). Applying that distinction here, § 3664(n) does not require authorization of a lump payment, as the restitution order limits payments to $50 per quarter during the defendant's term of incarceration.
The government's contrary arguments misconstrue the restitution order and the record in this case. First, the government argues in its reply brief that the relevant restitution order is the 2010 Judgment, interpreting that judgment to make "the full amount of restitution . . . due" now. Gov't's Reply at 7. The restitution ordered in that 2010 Judgment was "adjusted under section 3664(k)" by the November 2018 order, 18 U.S.C. § 3664(o) (allowing a "final judgment" ordering restitution to be "adjusted under section 3664(k)"), so the latter order governs.
Second, the government argues that "Defendant Armstrong's history of default . . . should nullify even the schedule of payments ordered by this Court." Gov't's Reply at 7. By statute, "[a] . . . payment of restitution is in default if a payment is delinquent for more than 90 days. Notwithstanding any installment schedule, when a fine or payment of restitution is in default, the entire amount of the fine or restitution is due within 30 days after notification of the default . . . ." 18 U.S.C. § 3572(i). The government claims that the defendant defaulted when she "fail[ed] to pay any part of the original restitution between September 2016 and August 2018" and because she has made "no payment since June 6, 2019." Gov't's Mot. at 9. The defendant represents that, for almost the entire period between September 2016 and August 2018, she was in county jail and was unable to make restitution payments. Further, once the defendant arrived at a BOP facility in March 2018, she began making restitution payments through the IFRP — those payments were the subject of her 2018 letters and of the November 2018 order. In any event, any failure to make restitution payments in the period prior to entry of the November 2018 restitution order is now irrelevant. Finally, the government's claim that the defendant has made no payment since June 6, 2019 is disingenuous: the government acknowledged on August 19, 2019 that "BOP encumbered or froze the funds in the Defendant's trust account" in anticipation of this litigation. Gov't's Resp. II at 1. "Because of the encumbrance on the trust account, the Defendant's IFRP payments are being stayed pending resolution of the litigation by the Court," the government continued. Id.
In sum, § 3664(n)'s mandate does not apply here because of the terms of the restitution order.
Finally, the government invokes § 3664(k), which provides a process for notification "of any material change in the defendant's economic circumstances that might affect the defendant's ability to pay restitution." 18 U.S.C. § 3664(k).
Although the defendant acknowledged in her October 2018 letter that she was receiving money from her family, she stated her "family ha[d] increased the amount that they send to my account . . . to cover my [restitution] and still be able to purchase hygiene, food and other necessary items from [the] commissary." Id. at 1. The defendant's representations were not contested by the government, see Gov't's Reply at 10; Gov't's Resp. I at 2, and the November 2018 order relied on these representations that the defendant's Inmate Trust Account contained subsistence-level funds.
Now, in her August 2019 letter, the defendant states that there is "a little over $4,100.00 in my pre-release savings account and about $175 in my commissary account," for a total of about "$4,300." Def.'s Letter III. This substantial accumulation of deposits constitutes a "material change in the defendant's economic circumstances" since November 2018. 18 U.S.C. § 3664(k); see also Armstrong, 2018 WL 5923913, at *6 (reviewing circuit courts' definitions of this phrase as "an objective comparison of a defendant's financial condition before and after a sentence is imposed," United States v. Grant, 235 F.3d 95, 100 (2d Cir. 2000), and "a bona fide change in the defendant's financial condition, either positive or negative," Cani v. United States, 331 F.3d 1210, 1215 (11th Cir. 2003)); United States v. Roush, 452 F.Supp.2d 676, 681 (N.D. Tex. 2006) ("Discovery of previously unknown or hidden assets would also constitute a change in the defendant's economic circumstances that could justify modification under section 3664(k), as it would be a change in the economic circumstances presented to the court.")). Given this "material change," § 3664(k) allows the Court to "adjust the payment schedule, or require immediate payment in full, as the interests of justice require." 18 U.S.C. § 3664(k).
The defendant says that she is saving the money in her account "to give [her]self the best possible advantage upon [her] release," Def.'s Letter III, and "to afford restitution payments and necessities in the later part of her sentence," Def.'s Opp'n at 3, "in the event that anything occurs where my family is not able to send me money," Def.'s Letter III. The defendant's mother, the "primary person sending [her] money," is "70 years old and lives on retirement income." Id. By this logic, the defendant would be excused from satisfying her restitution obligation more promptly than required by a court-ordered schedule, no matter how substantial her accumulated funds grew, due to the risk that her family contributions might end and she might not achieve her goal of saving sufficient funds to ease her reentry to the community following incarceration. The problem with this logic is that it would subvert the purpose of mandatory restitution "to `make victims of crime whole' by `fully compensat[ing]' them for their losses." In re Sealed Case, 702 F.3d 59, 67 (D.C. Cir. 2012) (alteration in original) (quoting United States v. Frazier, 651 F.3d 899, 904 (8th Cir. 2011)). Meanwhile, the defendant's letter does not acknowledge the importance of her obligation to pay restitution, mentioning that obligation only in passing. Def.'s Letter III.
A sum of a few hundred dollars, plus any income the defendant may receive from employment while incarcerated and any deposits the defendant may receive from her family, is sufficient for daily maintenance and to satisfy the defendant's quarterly restitution obligations while incarcerated. The defendant's desire to save money for her release does not outweigh the interests of the victim, and the public, in prompt satisfaction of the defendant's outstanding restitution obligation. Cf. United States v. Surber, 94 Fed. App'x. 355, 356 (10th Cir. 2004) (holding that defendant's wish to save for his release was not a material change in economic circumstances justifying adjustment of his restitution order under 18 U.S.C. § 3664(k)).
The defendant is thus ordered to make a payment of $4,000 from her IFRP account toward her outstanding approximately $6,000 restitution obligation. Otherwise, the defendant's restitution payments shall continue to be capped at $50 per quarter during the term of her incarceration.
For the reasons stated, the United States' Motion for Order Authorizing Restitution Payment from Inmate Trust Account is granted. BOP is authorized to turn over $4,000 from the defendant's Inmate Trust Account to the Clerk of this Court toward satisfaction of the defendant's outstanding restitution obligation in this case. The defendant's restitution payments shall otherwise continue to be capped at $50 per quarter during her term of incarceration.
An Order accompanies this Memorandum Opinion.
Id. The judgment further directed the defendant, during her period of supervision, to "pay the balance of any restitution owed at a rate of no less than $100 each month and [to] provide verification of payment to the Probation Office." Id. at 4.
