Argued: January 26, 2017
from the United States District Court for the District of
Maryland, at Baltimore. Richard D. Bennett, District Judge.
Jonathan Biran, BIRAN KELLY LLC, Baltimore, Maryland, for
Kathleen O'Connell Gavin, OFFICE OF THE UNITED STATES
ATTORNEY, Baltimore, Maryland, for Appellee.
Rosenstein, United States Attorney, OFFICE OF THE UNITED
STATES ATTORNEY, Baltimore, Maryland, for Appellee.
TRAXLER, DIAZ, and THACKER, Circuit Judges.
by published opinion. Judge Diaz wrote the opinion for the
court, in which Judge Traxler and Judge Thacker joined except
as to Part III.D. Judge Traxler wrote the opinion for the
court as to Parts III.D and IV, in which Judge Thacker
joined. Judge Diaz wrote a separate dissenting opinion as to
Parts III.D and IV.
Ritchie was convicted of making a false statement in a matter
within the jurisdiction of the executive branch of the
federal government, in violation of 18 U.S.C. §
1001(a)(2). The district court sentenced Ritchie to twelve
months and one day in prison and ordered him to pay $1, 385,
444.83 in restitution to Bank of America. Ritchie does not
contest his conviction or prison sentence but appeals the
district court's order of restitution.
no error, a majority of the court affirms the district
court's decision in its entirety.
facts relevant to this appeal are these. Ritchie owned
Richland Homes, Inc., through which he built, purchased, and
sold homes in Maryland and elsewhere. In July 2005, Ritchie
agreed to buy three lots of a parcel of real property in
Maryland (the "Property"). John Davis, a real
estate settlement agent employed by Allshore Title Services,
LLC conducted the closing and prepared a settlement sheet
known as the Housing and Urban Development Form 1
HUD-1 form, Ritchie was named as "Borrower, " and
the line for "Cash from Borrower" listed a figure
of $1, 153, 937.23. Ritchie, however, did not actually bring
any funds to the closing, and both Ritchie and Davis knew
that the HUD-1 form falsely reflected otherwise. The HUD-1
form was sent to Countrywide Bank which in turn wired $2,
445, 102 to Allshore to fund the settlement.
defaulted on this mortgage in 2007. Bank of America purchased
Countrywide in 2008, and subsequently foreclosed on the
Property. In the foreclosure proceedings, Bank of America
filed an Affidavit of Compliance asserting that the
outstanding principal balance on Ritchie's loan was $2,
491, 444.83. In May 2015, Bank of America sold the Property
at a public sale for $1, 106, 000.
pleaded guilty to making a false statement in a matter within
the jurisdiction of the U.S. Department of Housing and Urban
Development ("HUD"). As set out in the plea
agreement, the district court was free to order restitution
for the full amount of the actual, total loss caused by
Ritchie's offense. The plea agreement identified the
following as possible bases for restitution: (1) the Victim
and Witness Protection Act of 1982 ("VWPA"), 18
U.S.C. § 3663; (2) the Mandatory Victims Restitution Act
("MVRA"), 18 U.S.C. § 3663A; or, (3) as a
condition of supervised release, pursuant to 18 U.S.C.
§§ 3563(b)(2) and 3583(d). The government contended
that the court could order restitution in the amount of
"at least $454, 000." J.A. 13. Ritchie maintained,
however, that restitution was not appropriate, and he
reserved the right to appeal any order of restitution.
Ritchie's plea, a probation officer prepared a
Presentence Report ("PSR"), which set forth
Ritchie's personal and financial history and calculated
his advisory Guidelines range. The PSR also concluded that
the MVRA applied to Ritchie's offense and that
"restitution could be ordered . . . should the Court
find that there was a loss in the case." J.A. 318.
Ritchie did not object to the PSR.
parties thereafter filed sentencing memoranda. As relevant
here, Ritchie claimed that the MVRA did not apply because his
offense of conviction was not "an offense against
property" within the meaning of the MVRA, 18 U.S.C.
§ 3663A(c). Ritchie also objected to making restitution
because the government could not show that Bank of America,
as successor to Countrywide, was "directly and
proximately harmed as a result" of Ritchie's
offense. In Ritchie's view: (1) HUD was the sole
"victim" of his offense; (2) Countrywide knew that
Ritchie did not bring funds to the closing and did not rely
on Ritchie's false statement on the HUD-1 when it
disbursed the loan; and (3) Bank of America's eight-year
delay in foreclosing and its neglect of the Property were
superseding causes of the Bank's alleged loss.
sentencing memorandum, the government urged that Bank of
America, as Countrywide's successor, was a
"victim" under the MVRA and VWPA. The government
also advised the court that "Bank of America [was] still
in the process of compiling the final loss figure, " for
purposes of restitution. J.A. 45 n.2. One day before the
sentencing hearing, the government filed Bank of
America's final loss figure, calculated as more than $1.5
million, along with its reply to Ritchie's sentencing
memorandum. The district court deemed the submissions
untimely, however, and declined to consider them.
sentencing hearing, the government offered the affidavit
filed by Bank of America in the foreclosure proceeding
affirming that the principal balance on Ritchie's
outstanding loan was $2, 491, 444.83, and the recorded Deed
of Substitute Trustee showing that the Property sold for $1,
106, 000. Based on these documents, the government contended
that the loss caused by Ritchie's offense for purposes of
calculating the Guidelines range was the difference between
these figures, or $1, 385, 444.
response, Ritchie argued that Countrywide had approved the
loan before it received the false HUD-1 form and was also
complicit in Ritchie's offense, and therefore suffered no
loss. The district court rejected this argument, stating that
"there is not a scintilla of evidence before me . . .
that says there's any evidence that Countrywide knew full
well there was not going to be any exchange of funds."
J.A. 147. Ultimately, the court denied Ritchie's
objection to the PSR, concluding that the actual loss to Bank
of America for purposes of Ritchie's Guidelines
calculation was $1, 385, 443.83.
district court then turned to the issue of restitution.
Ritchie reiterated his view that Bank of America
"inherit[ed]" Countrywide's "[un]clean
hands" and knowledge of the falsified HUD-1 form, and
was therefore not entitled to restitution. J.A. 174-75.
Ritchie also contended that as "a matter of public
record, " Bank of America purchased
"Countrywide's paper . . . at a steep discount,
" and that any restitution ordered would constitute a
"windfall" because Bank of America paid
"nowhere near $2, 491, 000" for Ritchie's loan.
the district court stated that "[e]veryone knows"
that Bank of America bought Countrywide's assets at a
discount, it rejected Ritchie's arguments. J.A. 176. The
court reasoned that "the precise loss resulting from
this loan, resulting from [Ritchie's] clear lying on a
document . . . [is] a very easy . . . arithmetic
calculation." J.A. 177-78. The court applied the same
calculation it arrived at for purposes of the Guidelines, and
therefore ordered restitution in the amount of $1, 385,
timely noted this appeal.
review a district court's restitution order for abuse of
discretion." United States v. Freeman, 741 F.3d
426, 431 (4th Cir. 2014). "Federal courts do not have
the inherent authority to order restitution, but must rely on
a statutory source to do so." United States v.
Davis, 714 F.3d 809, 812 (4th Cir. 2013) (quotations
marks omitted). As such, "[d]iscretion in ordering
restitution 'is circumscribed by the procedural and
substantive protections' of the statute authorizing
restitution." United States v. Leftwich, 628
F.3d 665, 667 (4th Cir. 2010) (quoting United States v.
Henoud, 81 F.3d 484, 487 (4th Cir. 1996)).
begin with a brief overview of the relevant statutory
provisions. Outside of the probation context, restitution to
victims of federal crimes is governed predominately by either
the VWPA or the MVRA. See United States v.
Abdelbary, 746 F.3d 570, 574 (4th Cir. 2014). The
structure and language of the VWPA and MVRA are substantively
the same, and the procedures for imposing and enforcing
restitution pursuant to both statutes are set out in 18
U.S.C. § 3664. See 18 U.S.C. §§
critical difference between the statutes rests in the
sentencing court's discretion: The VWPA authorizes a
sentencing court to impose restitution, but requires the
court to "consider the financial resources of the
defendant" in determining whether, and in what amount,
to award restitution to victims of certain federal offenses.
See id. § 3663(a)(1)(B)(i). By contrast,
"the MVRA mandates restitution in the full amount of the
victim's loss" caused by certain federal offenses,
irrespective of a defendant's financial condition or
ability to pay. United States v. Dawkins, 202 F.3d
711, 715-16 (4th Cir. 2000) (citing 18 U.S.C. § 3663A).
lodges several challenges against the restitution order.
First, he says that the district court abused its discretion
by failing to identify the basis for ordering restitution. On
the merits, Ritchie contends that a violation of 18 U.S.C.
§ 1001 is not an "offense against property"
and that Bank of America is not a "victim" of
Ritchie's offense within the meaning of the MVRA.
Finally, he contends that the district court incorrectly
calculated the amount of restitution due. We address each
contention in turn.
district court did not state the basis for ordering
restitution. Ritchie argues that this silence constitutes an
abuse of discretion that requires remand. The government
responds that the record is clear that the district court
ordered restitution pursuant to the MVRA. We agree with the government.
district court fails to state the basis for ordering
restitution, our precedent permits us to review the record to
ascertain the ground relied on for the order. See
Freeman, 741 F.3d at 431-32 (conducting a "close
review of sentencing transcript[, ] . . . judgment documents,
" and plea agreement to determine basis for restitution
order after district court failed to identify statutory
authority for its order at sentencing). In Ritchie's
case, we have little trouble concluding that the district
court imposed restitution under the MVRA.
begin with, Ritchie stipulated in the plea agreement that the
district court could order restitution under the MVRA, the
VWPA, or as a condition of supervised release. And the PSR
set forth explicitly that "[t]he provisions of the
Mandatory Victim Restitution Act of 1996 apply to
[Ritchie's] Title 18 offense, " J.A. 311, and
further that, "[p]ursuant to [the MVRA], restitution
could be ordered in this case." J.A. 318. Equally
illuminating, the PSR said nothing about the VWPA or the
statutes governing conditions of supervised release under its
discussion of restitution.
sentencing hearing, the district court confirmed that Ritchie
and his lawyer had read the PSR and had no objections to it
beyond the issue of actual loss for purposes of the
Guidelines calculation. Thus, on this record evidence,
specifically the PSR-duly adopted by the court and reviewed
by Ritchie and his counsel-the district court clearly
accepted the PSR's explicit finding that restitution
could be ordered pursuant to the MVRA.
reliance on Leftwich to urge a different conclusion
is unavailing. In Leftwich, we vacated a restitution
order after the district court failed to identify the
statutory authority under which it had acted and neglected to
conform to the statutory requisites of either the VWPA or the
MVRA before ordering restitution. 628 F.3d at 668-69. As was
the case with Ritchie, Leftwich knew from the plea agreement
that the court could order restitution pursuant to the VWPA
or the MVRA. Id. at 666. However, neither the
Presentence Report nor the district court's statements
from the bench in Leftwich identified the statutory
authority for the award. Id. at 667. Thus, with no
record evidence available to clarify the district court's
basis for ordering restitution, we reasoned that "[t]he
failure of the district court in this case to specify the
statute under which it ordered restitution prevents us from
effectively determining whether the court properly exercised
its discretion in fashioning that restitution order."
Id. at 667.
concerns in Leftwich about appellate review of
"the district court's exercise of discretion over
the unknown" are not present here. Id. at 669.
Rather, it's evident in this case that the district court
ordered restitution pursuant to the MVRA.
next contends that, if the district court imposed restitution
under the MVRA, it erred because his offense of conviction is
not an "offense against property" within the
meaning of the restitution statute. To get there, Ritchie
applies the "categorical approach, " under which
courts "focus[ ] solely on the elements of the offense
of conviction, comparing those to the commonly understood
elements of the generic offense ...