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Date: 04-16-2017

Case Style:

UNITED STATES OF AMERICA v. AYFER YALINCAK, HAKAN YALINCAK

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Case Number: 11-5446(L), 11-5453(Con) 15-2018(Con), 15-3125(Con), 15-3170

Judge: GERARD E. LYNCH

Court: UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Plaintiff's Attorney: n

CHRISTINE L. SCIARRINO, Assistant United States Attorney (Lauren M. Nash and Marc H. Silverman, Assistant United States Attorneys, on the brief), for Deirdre M. Daly, United States Attorney for the District of Connecticut

Defendant's Attorney: n

JEFFREY C. KESTENBAND

Description: In June 2006, Yalincak pled guilty to bank and wire fraud charges
stemming from a scheme to defraud investors in a sham hedge fund that
Yalincak purported to manage. On April 11, 2007, the district court sentenced
Yalincak to concurrent terms of 42 months’ imprisonment followed by
concurrent terms of supervised release and ordered him to pay $4,182,000 in
restitution to his victims.
On April 24, 2007, Yalincak moved the district court “to order that any and
all funds” recovered in the ongoing bankruptcy proceedings of Daedalus Capital
Relative Value Fund I, LLC (the “Daedalus Bankruptcy”) “be credited to the
restitution order,” and, “[i]n particular, . . . the amount of $1,050,907.38 recovered
in the said proceedings.” A. 25. In response, the government filed a written
4
submission stating that it did “not object to the defendant’s motion,” but that
Yalincak “should take whatever action is necessary to make certain that the
[government] . . . is notified timely of any distribution from the $1,050,907.38 as
well as any future distributions to victims of the defendants’ fraudulent scheme
by the bankruptcy trustee.” A. 34-35.
On November 2, 2007, Yalincak filed a second motion seeking credit for
$90,000 collected in the bankruptcy proceedings of HMMH Holdings, LLC (the
“HMMH Bankruptcy”). Yalincak also reiterated his request to be credited any
and all funds, including the $1,050,907.38, recovered in the Daedalus Bankruptcy.
In that motion, Yalincak noted that he “desire[d] clarification of his and his co
defendants’ restitution status” given that the “Bankruptcy Trustee has
commenced approximately fourteen (14) adversary proceedings,” which
Yalincak “anticipate[d] . . . w[ould] constitute the principal avenue for
restitution” to his victims. A. 37.
On December 26, 2007, the district court granted both of Yalincak’s
motions “absent objection” in a text-only order on the case docket. A. 14. The
order stated in full:
ORDER granting 147 Motion as to Hakan Yalincak (1); granting 159 Motion as to Hakan Yalincak (1), absent objection. Signed by Judge
5
Janet Bond Arterton on 12/26/2007. (Tooker, A.) (Entered: 12/26/2007)
Id. The district court did not provide any other explanation for the ruling.
Yalincak filed additional motions for credit in January 2011 and July 2013.
On May 11, 2015, in the course of ruling on those motions, the district court
vacated its December 2007 order sua sponte. In doing so, the district court
explained that it had previously granted Yalincak’s first two motions for credit
“absent objection . . . without a determination on the merits” and that “the
Clerk’s records indicate that Mr. Yalincak has not been credited with these
sums.” A. 258. Having now conducted a “careful review of the motions,” the
district court concluded that its previous grant of the motions was “premature”
and vacated the December 2007 order, citing its authority under Federal Rule of
Civil Procedure 60(a) to correct a clerical mistake or a mistake arising from
oversight or omission. Id. The district court then denied Yalincak credit for the
$1,050,907.38 collected in the Daedalus Bankruptcy and the $90,000 collected in
the HMMH Bankruptcy on the basis that Yalincak had failed to make the
required showings under the MVRA, which states, in relevant part, that “[a]ny
amount paid to a victim under an order of restitution shall be reduced by any
6
amount later recovered as compensatory damages for the same loss by the victim
in . . . any Federal civil proceeding.” 18 U.S.C. § 3664(j)(2).
Yalincak moved for reconsideration. In September 2015, after holding a
status conference and accepting further briefing, the district court adhered to its
decision to vacate the December 2007 order. Acknowledging, however, that its
reliance on Rule 60(a) was misplaced, the district court instead located its
authority to vacate the December 2007 order in its “inherent power to ‘correct
mistakes made in its handling of a case’” and “‘power to grant relief from
erroneous interlocutory orders.’” A. 268, quoting LoRusso, 695 F.2d at 53. The
district court then proceeded to reconsider whether Yalincak was entitled to
credit under § 3664(j)(2) for the amounts collected in the Daedalus and HMMH
Bankruptcies, having now received evidence of the sums actually distributed to
Yalincak’s victims through those proceedings. As to the Daedalus Bankruptcy,
the district court granted Yalincak credit for $307,767.53 actually distributed to
victims, but excluded the $1,262,077.17 spent on administrative expenses (which
consisted largely of attorneys’ fees) in connection with the Daedalus Bankruptcy
and the $10,166.62 distributed to creditors to whom Yalincak did not owe
restitution. As to the HMMH Bankruptcy, the district court likewise granted
7
Yalincak credit for $175,104.24 actually distributed to victims, but excluded
administrative expenses of $52,435.78. After accounting for those credits (and
other credits not at issue on appeal), the district court determined that Yalincak’s
outstanding restitution obligations totaled $1,858,038.38.
Thereafter, Yalincak sought a stay of the distribution of certain funds held
by the district court pending the outcome of this appeal. While the district court
granted the stay on the grounds that Yalincak had shown that irreparable harm
would occur in the absence of a stay, it rejected Yalincak’s contention that he was
likely to succeed on the merits of his appeal. In so ruling, the district court
disagreed with Yalincak’s characterization of the December 2007 order as final
rather than interlocutory. Specifically, the district court reasoned that it was
“clear” at the time that Yalincak filed his first two motions for credit that “they
would not be the last such motions” and that “[t]he issues underlying Mr. 1
Yalincak’s several motions for credit were not finally resolved” until the district
court’s September 2015 ruling. A. 283.
The district court based this conclusion on Yalincak’s “specifically not[ing] that he1 anticipated filing a number of additional motions for credit in the future” when filing his initial two motions for credit. A. 283. In its ruling, the district court indicated that it was referring to the statement in Yalincak’s November 2007 motion for credit that “[t]he Bankruptcy Trustee has commenced approximately fourteen (14) adversary proceedings and the defendant anticipates that this procedure will constitute the principal avenue for restitution to the investors.” A. 37.
8
Yalincak filed timely notices of appeal of both the district court’s May 2015
and September 2015 rulings.
DISCUSSION
On appeal, Yalincak argues principally that the December 2007 order was a
final order that the district court lacked the authority to later vacate. Yalincak
contends that he is therefore entitled to the credits that he was granted in the
district court’s December 2007 order: the $1,050,907.38 collected in the Daedalus
Bankruptcy and $90,000 collected in the HMMH Bankruptcy. We review a 2
district court’s decision to reconsider or modify a previous interlocutory order
for abuse of discretion, see United States v. Uccio, 940 F.2d 753, 758-59 (2d Cir.
1991), but conduct de novo review of the district court’s legal conclusions,
including whether an order is interlocutory or final, see Somoza v. N.Y.C. Dep’t of
Educ., 538 F.3d 106, 112 (2d Cir. 2008).
As a threshold matter, Yalincak conceded at oral argument that the credits
at issue in the December 2007 order were erroneously granted. Section 3664(j)(2)
Yalincak also contends that the district court’s vacatur of the December 2007 order2 violated his rights to due process and against double jeopardy. Because we hold that the district court lacked the authority to vacate its December 2007 order and thus reinstate the credits that Yalincak was granted in that order, we need not address those arguments with respect to those credits. But see infra note 11 (discussing those arguments as applied to certain prospective aspects of the December 2007 order).
9
provides, in relevant part, that “[a]ny amount paid to a victim under an order of
restitution shall be reduced by any amount later recovered as compensatory
damages for the same loss by the victim in . . . any Federal civil proceeding.” 18
U.S.C. § 3664(j)(2). As we recently held in United States v. McGinn, 787 F.3d 116
(2d Cir. 2015), amounts “collected” by a court-appointed receiver but not
“actually distribute[d]” to victims cannot be credited towards a defendant’s
restitution total under § 3664(j)(2), “which only permits offsets for money
‘recovered’ as opposed to ‘collected’ but not necessarily distributed.” Id. at 130
131. Amounts recovered by a bankruptcy trustee for the benefit of the
bankruptcy estate, and consumed in the administration of the estate or
distributed to non-victim creditors, plainly are not “recovered . . . by the
victim[s]” of a crime; only amounts actually distributed to the victim creditors fit
that description. Accordingly, because the amounts at issue here were collected
by the bankruptcy trustee but had not been distributed to Yalincak’s victims at
the time of the December 2007 order, Yalincak was not entitled to credit under
§ 3664(j)(2) for those amounts.3
McGinn also disposes of Yalincak’s argument that the district court erred in its3 September 2015 ruling when it denied him credit for the funds collected in the Daedalus and HMMH Bankruptcies that were expended on administrative costs. Because those
10
Yalincak argues, nevertheless, that even if the December 2007 order was
erroneous, it was a final erroneous order that the district court lacked the
authority to later vacate. As we explained in LoRusso, “the power to grant relief
from erroneous interlocutory orders, exercised in justice and good conscience,
has long been recognized as within the plenary power of courts.” 695 F.2d at 53,
quoting United States v. Jerry, 487 F.2d 600, 604 (3d Cir. 1973); accord Uccio, 940
F.2d at 758. A district court’s power to modify its prior orders under LoRusso 4
thus turns on the same distinction that generally governs whether an order is
appealable – that is, whether the order is interlocutory or final. If the December 5
2007 order was interlocutory, the district court had the authority to vacate that
funds were not distributed to Yalincak’s victims, he cannot receive credit for them under § 3664(j)(2). See McGinn, 787 F.3d at 131. Yalincak seeks to distinguish LoRusso on the basis that it does not concern post-4 judgment proceedings, but we see no reason why the “plenary power” that gives rise to a court’s ability to grant relief from erroneous interlocutory orders would not extend to post-judgment proceedings. 695 F.2d at 53. As LoRusso recognized, a court retains the power to correct errors until entry of final judgment. Id. Likewise, in the post-judgment context, a court may similarly exercise its “power to grant relief” from any mistakes in interlocutory orders so long as it retains jurisdiction over the post-judgment proceedings. See id. Some post-judgment orders, however, are final appealable orders. See In re Am. Preferred Prescription, Inc., 255 F.3d 87, 92-93 (2d Cir. 2001). The question here, therefore, is whether the order in question was interlocutory or final. The parties agreed at oral argument that finality for the purposes of appealability is5 coextensive with finality for the purposes of a court’s authority to modify its previous orders under LoRusso. We see no reason to conclude otherwise.
11
order in 2015, and no immediate appeal of the order would have been available
in December 2007. However, if the order was final, as Yalincak contends, the
district court lacked the authority to vacate that order in 2015, and the only
recourse available for correcting the district court’s errors would have been for
the parties to seek clarification, or for the government or other aggrieved party to
appeal the order immediately in December 2007. No such action was taken.
The dispositive question on appeal is thus whether the December 2007
order was final or interlocutory. Generally, a final decision is one that “ends the
litigation on the merits and leaves nothing for the court to do but execute the
judgment.” Catlin v. United States, 324 U.S. 229, 233 (1945). In post-judgment
proceedings, an order is not final simply because it follows the entry of
judgment. EM Ltd. v. Republic of Argentina, 695 F.3d 201, 205 (2d Cir. 2012).
Rather, we have stated that a “practical rather than a technical construction” of
finality is “especially” appropriate in the post-judgment context because the
traditional concerns regarding piecemeal review carry less force during such
proceedings. In re Am. Preferred Prescription, Inc., 255 F.3d 87, 93 (2d Cir. 2001)
(internal quotation marks omitted). Nonetheless, not all post-judgment orders are
appealable. As we have noted, while post-judgment orders in “ordinary civil
12
litigation” are “generally appealable,” “ministerial” or “administrative” orders,
such as post-judgment discovery orders, are not. Id. at 92-93 (internal quotation
marks omitted). Accordingly, we have held that orders granting subpoenas in aid
of post-judgment collection proceedings are not final; instead, the “relevant final
decision” in such proceedings is the “subsequent judgment that concludes the
collection proceedings.” Vera v. Republic of Cuba, 802 F.3d 242, 247 (2d Cir. 2015)
(internal quotation marks omitted); accord EM Ltd., 695 F.3d at 205-06.
We have yet to rule on whether an order resolving a motion for credit
under § 3664(j)(2) constitutes an appealable final order. In doing so, we begin 6
with an examination of the relevant provisions of the MVRA, which is one of
several federal statutes empowering courts to impose restitution obligations on
criminal defendants. United States v. Thompson, 792 F.3d 273, 277 (2d Cir. 2015).
The substantive provisions of the MVRA, codified at 18 U.S.C. § 3663A, require
that courts impose restitution obligations on defendants who are convicted of
certain categories of crimes that inflict physical injury or property loss on their
victims. Id. § 3663A(b); Thompson, 792 F.3d at 277. Such restitution obligations are
Courts variously refer to § 3664(j)(2) motions as motions for credit, offset, or reduction.6 For the sake of consistency, we adopt the district court’s terminology in referring to Yalincak’s motions as motions for credit.
13
imposed “when sentencing [the] defendant” in an order of restitution, which
must be issued and enforced pursuant to the MVRA’s procedural provisions,
codified at 18 U.S.C. § 3664. Id. §§ 3663A(a)(1), (d); accord Thompson, 792 F.3d at
277.
A district court’s resolution of a motion for credit under § 3664(j)(2) comes
after an order of restitution has already been issued – when a victim “later
recover[s]” compensatory damages in a state or federal civil proceeding for the
“same loss” covered by the order of restitution. 18 U.S.C. § 3664(j)(2). In such
circumstances, § 3664(j)(2) entitles a defendant to a reduction in the amount to be
paid to that victim in order to “limit restitution that would result in an
overpayment to the victim.” United States v. Nucci, 364 F.3d 419, 423 (2d Cir.
2004). Although the MVRA does not prescribe a particular procedure for
resolving such claims, see 18 U.S.C. § 3664(e) (providing generally that “[a]ny
dispute as to the proper amount or type of restitution” is to be resolved by the
preponderance of the evidence and specifying the allocation of the burden of
proof in a variety of circumstances), our sister Circuits have recognized that
defendants are entitled to move the district court for a credit or offset to their
restitution obligations pursuant to § 3664(j)(2) once a victim has recovered such
14
damages, see, e.g., United States v. Malone, 747 F.3d 481, 486, 489 n.4 (7th Cir. 2014);
United States v. Louper-Morris, 672 F.3d 539, 567 (8th Cir. 2012); see also United
States v. Goldberg, 661 F. App’x 33, 37 (2d Cir. 2016) (summary order). A
defendant may seek such credit regardless of whether that credit is sufficient,
standing alone, to discharge the defendant’s restitution obligations entirely.
A district court’s resolution of a § 3664(j)(2) motion thus generally comes at
some intermediate point in post-judgment restitution proceedings: after an order
of restitution has been issued, but before a defendant entirely discharges his or
her restitution obligations. Accordingly, an order granting a § 3664(j)(2) motion
generally cannot be said to “conclude[] the . . . proceedings” in the same way that
a “subsequent judgment” concludes post-judgment collection proceedings, Vera,
802 F.3d at 247 (internal quotation marks omitted); accord EM Ltd., 695 F.3d at 206,
except in the circumstance where the credit granted entirely discharges a
defendant’s restitution obligations, thereby ending post-judgment restitution
proceedings for all practical purposes.
The Seventh Circuit has, nonetheless, found an analogous category of post
judgment orders – those granting a writ of garnishment – to be final and
appealable. Such writs, issued by a district court under the Federal Debt
15
Collection Procedures Act, are often sought by the government to seize a
defendant’s property in order to satisfy his or her restitution obligations. See
United States v. Cohan, 798 F.3d 84, 89 (2d Cir. 2015). In many cases, the seized
assets are not enough to discharge the defendant’s restitution obligations
entirely. See, e.g., United States v. Sloan, 505 F.3d 685, 698 n.20 (7th Cir. 2007)
(garnishing a defendant’s wages at the rate of $148 per week to satisfy
outstanding restitution obligations of more than $600,000). Thus, like orders
granting a motion for credit under § 3664(j)(2), a garnishment order often fails to
terminate restitution proceedings. Yet the Seventh Circuit has held that such
orders are final and appealable because they constitute “a final decision as to [a
defendant’s claim] to [particular] [a]ssets.” United States v. Kollintzas, 501 F.3d
796, 802 (7th Cir. 2007); see also Sloan, 505 F.3d at 687 (holding that a garnishment
order is a “final appealable order”); Harold v. Steel, 773 F.3d 884, 886 (7th Cir.
2014) (approving the rule articulated in Kollintzas and Sloan). That rule turns in
part on a “practical rather than a technical construction” of finality. In re Am.
Preferred Prescription, Inc., 255 F.3d at 93. As the Seventh Circuit has suggested, if
garnishment orders were not appealable, a defendant may never have an
opportunity to “timely appeal” such a determination since there may not be
16
“another, more conclusive, order” from which to appeal. Kollintzas, 501 F.3d at
802 (internal quotation marks omitted).7
Similar logic applies here. When the district court granted Yalincak’s 8
motion for credit, it made a conclusive determination as to Yalincak’s entitlement
to credit for the $1,050,907.38 collected in the Daedalus Bankruptcy and the
$90,000 collected in the HMMH Bankruptcy. The order did not dispose of the
issue of restitution entirely, given that the credits were not enough to discharge
Yalincak’s restitution obligations in full and thereby end the restitution
proceedings. Nonetheless, the district court’s resolution of the § 3664(j)(2) motion
was a final decision as to Yalincak’s claim regarding the proper accounting for
particular funds. If such a decision were not considered final and appeal had to
We have implicitly treated garnishment orders as final and appealable. In United States7 v. Cohan, 798 F.3d 84, 89 (2d Cir. 2015), we reviewed two district court orders granting writs of garnishment that seized a defendant’s retirement account in order to satisfy the defendant’s restitution obligations. Id. at 85. In affirming the district court, we noted that the defendant could “no longer appeal from the restitution order itself, which became final long ago” and instead took the appeal “from an alleged error in how the writ of garnishment hearing was conducted.” Id. at 89. The Seventh Circuit has not expressly ruled on the appealability of an order resolving8 a motion for credit under § 3664(j)(2). While it has stated in dicta that “[a]n appeal may be available . . . when a defendant has a fair argument that he has satisfied his restitution obligation,” United States v. Shah, 665 F.3d 827, 836-37 (7th Cir. 2011) (citation omitted), that language does not exclude the possibility that appeal of such orders may be available prior to full satisfaction of a defendant’s restitution obligations.
17
wait until Yalincak had discharged his restitution obligations entirely, it is
unclear as a practical matter whether the district court’s grant of the § 3664(j)(2)
motion could ever be challenged. As of December 2007, Yalincak still owed over
$3 million in restitution to his victims; as of September 2015, that figure remained
close to $2 million according to the district court’s calculations. It is entirely 9
possible that Yalincak will never fully satisfy his restitution obligations within the
restitution order’s lifetime.10
The analogy to garnishment orders is concededly imperfect. In the
garnishment context, the defendant is deprived of property immediately and
may suffer an irreparable loss if immediate appeal is not available, since there
may never be a later opportunity to appeal the order. In the present context, in
contrast, the district court’s December 2007 order does not affect ownership of
any property. Regardless of the question of credit, the distribution of the
Indeed, if appeals of orders entered during post-judgment restitution proceedings9 were not available until a defendant’s restitution obligations were discharged entirely, it follows that we would not have jurisdiction over this appeal. A defendant’s restitution obligations eventually expire. Under 18 U.S.C. § 3613, “[t]he10 liability to pay restitution shall terminate on the date that is the later of 20 years from the entry of judgment or 20 years after the release from imprisonment of the person ordered to pay restitution.” Id. § 3613(b); see also United States v. Berardini, 112 F.3d 606, 611-12 (2d Cir. 1997).
18
collected funds to the victims, the other creditors, and the trustee’s attorneys will
not change. It can be argued that, unless and until the amounts credited to
Yalincak extinguish his restitution obligations, the credit determinations remain
somewhat academic.
That argument is not, in the abstract, without force. A regime in which a
defendant could not seek resolution of possible credits until he sought a final
determination that his restitution obligations were fully discharged could have
been created. The courts have recognized, however, that Congress did not create
such a regime. Instead, all courts that we know to have considered the question
presented here have permitted persons subject to restitution orders to seek
adjudication of whether certain alleged recoveries by victims should be credited
against their restitution obligations under § 3664(j)(2). The provision of such a
procedure is inconsistent with any argument that its results can be treated as
interlocutory and subject to sua sponte revision at any time. By permitting
defendants to move for a determination of credit, courts have recognized that
persons subject to restitution orders are entitled to know, as they lead their lives
and make economic decisions over the long duration of restitution orders, the
extent of their remaining restitution obligations. That procedure would be
19
pointless if decisions to grant or deny restitution credits were merely tentative
predictions or estimates, subject to revision indefinitely if a district court sua
sponte changed its mind years after the credit was awarded, and incapable of
being finalized by appeal. A “practical . . . construction” of finality thus supports
the adoption of a rule permitting appeal of a § 3664(j)(2) order prior to a
defendant’s complete satisfaction of his or her restitution obligations. In re Am.
Preferred Prescription, Inc., 255 F.3d at 93.
For all the foregoing reasons, we hold that a § 3664(j)(2) order is final and
appealable where the order conclusively determines a defendant’s entitlement to
credit under § 3664(j)(2) for particular funds. It follows that the December 2007
order was a final appealable order as to Yalincak’s entitlement to credit under
§ 3664(j)(2) for the $1,050,907.38 collected in the Daedalus Bankruptcy and the
$90,000 collected in the HMMH Bankruptcy. Because the December 2007 order
was final, the district court lacked the authority under LoRusso to later vacate that
order. Accordingly, the portions of the district court’s May 2015 and September
2015 rulings vacating its prior December 2007 order must be vacated.11
Yalincak also contends that the December 2007 order granted his request that11 “calculation of future restitution credits” be based on the amounts collected in the Daedalus Bankruptcy rather than on the sums actually distributed to his victims
20
The government advances two counterarguments. First, the government
through those proceedings. Appellant’s Br. 2. Yalincak bases that argument on the language in his initial motions seeking credit for “any and all funds” recovered in the Daedalus Bankruptcy. Assuming arguendo that the December 2007 order actually granted such relief, any such grant was an advisory opinion that the district court lacked the power to render because whether Yalincak could receive credits for such hypothetical amounts was an entirely “abstract or theoretical question[]” at that point in time. See, e.g., Abele v. Markle, 452 F.2d 1121, 1124 (2d Cir. 2000). Thus, while the district court’s grant of credit for the $1,050,907.38 collected in the Daedalus Bankruptcy at the time of the December 2007 order must stand, the district court is not bound to credit Yalincak for any additional sums that were later collected in the Daedalus Bankruptcy but not distributed to his victims. Yalincak’s reading of the December 2007 order also serves as the basis for a variant of his due process and double jeopardy claims. As discussed supra in note 2, those claims are moot insofar as they arise from the district court’s vacatur of credits for the specific sums collected as of December 2007 given that this opinion reinstates those credits. Yalincak also contends, however, that he relied on the assumption that the district court would calculate future restitution credits based on the amounts collected as opposed to distributed in the Daedalus Bankruptcy, and that he therefore did not contest the administrative expenses incurred in those proceedings as vigorously as he otherwise would have. Yalincak argues that this led to a violation of his rights to due process and against double jeopardy when the district court later excluded those administrative expenses from the amounts credited towards his restitution obligations. Even assuming arguendo that Yalincak was thereby prejudiced, his due process and double jeopardy claims nonetheless fail. Yalincak’s right against double jeopardy was not violated because the total amount of restitution ordered never changed. Cf. United States v. Kyles, 601 F.3d 78, 83-84 (2d Cir. 2010) (finding no double jeopardy violation where the district court made modifications to a “restitution schedule” that “left untouched the pronounced amount of restitution” and thus worked “no change in sentence” (emphasis in original)). As to Yalincak’s due process claim, the district court permitted additional briefing from the parties and held a status conference after Yalincak moved for reconsideration. That provided sufficient process. See United States v. Gushlak, 728 F.3d 184, 193 (2d Cir. 2013) (holding that decisions as to what types of procedure are necessary in restitution proceedings “lie within the discretion of the sentencing court and are reviewed for abuse of discretion” (internal quotation marks omitted)).
21
contends that the December 2007 order was interlocutory under the particular
circumstances of this case because that order did not conclusively determine
Yalincak’s entitlement to the amounts collected in the Daedalus and HMMH
Bankruptcies, but was instead a conditional grant of credit contingent on
Yalincak’s later production of evidence of the sums actually received by his
victims in those proceedings. This assertion relies on language in the
government’s response to Yalincak’s initial motion for credit – specifically, its
request that Yalincak should provide notice to the government of “any
distribution from the $1,050,907.38 . . . to victims of the defendants’ fraudulent
scheme by the bankruptcy trustee.” A. 34-35. The district court’s December 2007
order does not, however, condition its grant of Yalincak’s motion on proof of any
such distributions; it simply and unconditionally grants Yalincak’s motions for
credit. If the government believed that the district court misconceived its consent
to Yalincak’s motion for credit, it was incumbent on the government to seek
reconsideration or clarification of the court’s order.
Second, the government argues that the interlocutory nature of the
December 2007 order was clear from the fact that Yalincak’s two motions for
credit would not be his last and that the “[district court’s] work in resolving all
22
issues related to Yalincak’s restitution obligations was far from over” in
December 2007. Appellee’s Br. 29. That may be true, but it does not negate the
fact that the district court made a final decision in December 2007 as to Yalincak’s
entitlement to the $1,050,907.38 collected in the Daedalus Bankruptcy and the
$90,000 collected in the HMMH Bankruptcy. To the extent that the government
implicitly seeks a rule that motions for credit may not be appealed until a
defendant has entirely discharged his or her restitution obligations, we reject that
rule for all the reasons already discussed.
We recognize that a district court is afforded some degree of flexibility and
discretion in discharging its duties under the MVRA. Monitoring a defendant’s
restitution obligations is a complicated undertaking, and the MVRA’s procedural
provisions recognize that by affording the district court flexibility in carrying out
those responsibilities. Our decision today does not compromise that flexibility. 12
The problems presented by this appeal were largely avoidable. A court need not
make piecemeal rulings every time a defendant moves for credit under
See, e.g., 18 U.S.C. § 3664(e) (providing that “[t]he burden of demonstrating such other12 matters as the court deems appropriate shall be upon the party designated by the court as justice requires”); id. § 3664(d)(6) (permitting the district court to refer any issue arising in connection with a proposed restitution order to a magistrate judge or special master, subject to the district court’s de novo determination of the issue).
23
§ 3664(j)(2). Where ruling on such a motion would be premature, as it was here,
the district court may delay ruling on the matter until the issue is ripe for
determination or deny the motion without prejudice to renewal. See Louper
Morris, 672 F.3d at 567; Malone, 747 F.3d at 489 & n.4; United States v. Taves, 150 F.
App’x 654, 655 (9th Cir. 2005). But where a district court makes a conclusive
determination as to whether a defendant is entitled to credit under § 3664(j)(2) for
particular funds, it cannot later vacate that final order simply because the order
was prematurely or erroneously decided and the parties failed to pursue a timely
appeal. We note that the district court’s desire to correct an error largely
attributable to the government’s somewhat casual consent is understandable.
Nevertheless, considerations of finality dictate that by the time the error was
noticed, it was beyond the power of the court to correct.

Outcome:

For the foregoing reasons, we VACATE the portions of the district court’s May 1, 2015 and September 28, 2015 rulings that vacated its prior December 2007 order. We also VACATE the portions of those rulings that pertain to Yalincak’s entitlement to credit under § 3664(j)(2) for the sums collected in the Daedalus and HMMH Bankruptcies so that the district court may reassess those credits, taking into account those already granted to Yalincak in the December 2007 order. We REMAND the case for further proceedings consistent with this opinion.

Plaintiff's Experts:

Defendant's Experts:

Comments:



 
 
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