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United States v. Marzano

United States District Court, S.D. Alabama, Southern Division

November 27, 2017

UNITED STATES OF AMERICA
v.
DAVID MARZANO and LAURA BLAIR, Defendants.

          ORDER

          WILLIAM H. STEELE UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on defendant David Marzano's “Motion to Finalize Sentencing Order with Respect to Restitution” (doc. 220), defendant Laura Blair's “Motion to Adopt and Join in Motion to Finalize Sentencing Order with Respect to Restitution” (doc. 221), and defendant Blair's “Amended Motion to Adopt and Join in Defendant Marzano's Reply” (doc. 226).[1] The Motions have been briefed, and are now ripe for disposition.

         I. Background.

         Defendants David Marzano and Laura Blair (along with co-defendant Janece Burke) were indicted in this District Court on charges arising from their participation in a fraudulent scheme to profit illegally from U.S. Department of State Exchange Visitor Programs. This fraudulent scheme involved more than 200 victims scattered across approximately 30 countries, including places like Moldova, Taiwan, Vietnam and Russia. On April 4, 2016, defendant Blair entered a guilty plea to Count One (conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349) and defendant Marzano entered a guilty plea to Counts One and Four (wire fraud, in violation of 18 U.S.C. § 1343). Both defendants signed written plea agreements acknowledging that restitution was mandatory pursuant to 18 U.S.C. §§ 3556 and 3663(A), and expressly agreeing “to make full restitution in an amount to be determined by the Court at sentencing.” (Doc. 118, ¶ 18; see also doc. 119, ¶ 17.)

         Presentence Investigation Reports filed on March 3, 2017 reflected that the Government and defendants Blair and Marzano were in agreement “that the conspiracy involved 240 victims with a loss amount of $1, 001, 000.” (Doc. 141, ¶ 10; doc. 143, ¶ 10.) Both PSRs indicated that “[p]ursuant to 18 U.S.C. § 3663A, restitution in the total amount of $1, 001, 000 shall be ordered in this case …. The victims in the instant case were all foreign nationals and … the present address of many are unknown at this time.” (Doc. 141, ¶ 63; doc. 143, ¶ 60.) On June 16, 2017, defendant Marzano filed his Position with Respect to Sentencing Factors, in which he objected to Paragraph 10 of his PSR and denied having reached any agreement as to loss amount; however, Marzano did not expressly object to the restitution amount listed in Paragraph 63 of his PSR. (Doc. 170.)[2] The Government responded to Marzano's objection to Paragraph 10 by showing in detail how the loss amount was calculated and explaining its contention that a loss amount of $920, 820.00 was correct. (Doc. 175, at 4.)[3]

         Also on June 16, 2017, the Government sent an email to the undersigned's judicial assistant, setting forth its position as to each of Marzano's objections relating to loss calculations. (Doc. 223, Exh. 1.) Attached to this email was a spreadsheet of loss calculations that the Government represented “was provided to defense counsel months ago.” (Id.) That spreadsheet specifically identified by name each of 261 purported victims of defendants' fraudulent scheme, as well as the sponsoring agency and loss calculation for each victim. The Government's June 16 email reflected its willingness to accommodate a defense objection by removing 55 of those victims who met certain criteria (including 44 who arrived in the United States prior to the beginning of the charged conspiracy, 9 who entered the United States under a different State Department program, and 2 who were not in Marzano's company database). The record establishes that both sides were well aware prior to sentencing of the names of each of the 206 victims of defendants' fraudulent scheme.

         On the morning of June 20, 2017, the Government sent an email to the U.S. Probation Office (with copies to defendants' counsel of record) reflecting that the Government and Marzano's counsel had engaged in further discussions concerning the victims' losses. (Doc. 223, Exh. 2.) The June 20 email stated that, in light of those discussions, the Government had agreed to certain enumerated reductions in the loss calculations, leading to a revised figure of $815, 570.[4]

         The sentencing hearings for Marzano and Blair (as well as their co-defendant, Burke) were conducted before the undersigned on the afternoon of June 20, 2017. At Marzano's hearing, his counsel withdrew all objections to the PSR and indicated that there were no matters that needed to be taken up as to the content of the PSR. (Doc. 219, at 3.) With regard to restitution, the undersigned ruled as follows during that hearing:

“It's ordered that you make restitution in the amount of $815, 570. That restitution is due immediately and payable in full and is to be paid through the clerk of this court. Restitution is to be paid jointly and severally with co-defendant, Laura Blair, and is to be paid on a pro rata basis. If full restitution is not immediately paid, any amount owing during the period of incarceration shall be subject to payment through the Bureau of Prisons' inmate financial responsibility program. … As a special condition of supervised release, the probation office shall pursue collection in installments to begin within 30 days after the date of release. If restitution is to be paid in installments, it's ordered that you make at least minimum monthly payments in the amount of $250.”

(Id. at 17-18.) Neither Marzano nor his counsel expressed any objection on the record to the restitution portion of this sentencing hearing. Indeed, when asked at the conclusion of the hearing whether he had any objections or other matters to put on the record, Marzano's counsel responded, “No objections at all.” (Id. at 21.)

         Similarly, at Blair's sentencing hearing conducted on the same afternoon, Blair's counsel answered, “I don't believe so, ” when asked whether there were any matters that needed to be taken up as to the content of her PSR. (Doc. 219-2, at 5.) The Court's restitution ruling at Blair's sentencing hearing was articulated on the record as follows:

“It's also ordered that you make restitution in the amount of $815, 570 to the individuals at the addresses on file. And that restitution is to be paid jointly and severally with Mr. Marzano and Ms. Burke. That restitution is also due immediately and payable in full and it is to be paid through the clerk of court. … If restitution is to be paid in installments, the Court orders that you make at least minimum monthly payments in the amount of $250.”

         (Doc. 219-2, at 10-11.) Neither Blair nor her counsel expressed any objection on the record to this restitution ruling. When directly asked by the Court at the conclusion of the sentencing hearing whether there were any objections or other matters that needed to be placed on the record, Blair's attorney responded, “I have no objections, ” and then added, “I thought you were very fair today. Thank you.” (Id. at 12-13.)

         On June 23, 2017, the Court entered Judgments (docs. 196, 200) as to both Marzano and Blair. Each Judgment included a special condition addressing the defendant's restitution obligation. The restitution portion of Blair's Judgment reads in relevant part (which is similar to the corresponding section of ...


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