United States v. Josephine L. Broughton-Jones, A/K/A Josie Broughton, 71 F.3d 1143, 4th Cir. (1995)

71 F.
3d 1143
UNITED STATES of America, Plaintiff-Appellee,

v.
Josephine L. BROUGHTON-JONES, a/k/a Josie Broughton,
Defendant-Appellant.
No. 94-5539.
United States Court of Appeals,

Fourth Circuit.
Argued: Nov. 3, 1995.
Decided: Dec. 22, 1995.
ARGUED: Benjamin Cecil Duster, Chicago, IL, for Appellant. Terry L.

Wooten, Assistant United States Attorney, Columbia, SC, for Appellee.
ON BRIEF: Thomas D. Broadwater, Sr., Columbia, SC, for Appellant. J.
Preston Strom, Jr., United States Attorney, Columbia, SC, for Appellee.
Before MICHAEL and MOTZ, Circuit Judges, and PHILLIPS, Senior
Circuit Judge.
Vacated and remanded by published opinion. Senior Judge PHILLIPS
wrote the opinion, in which Judge MICHAEL and Judge DIANA
GRIBBON MOTZ joined.
OPINION
PHILLIPS, Senior Circuit Judge:
In this case we must first determine whether a defendant's valid waiver of her
right to appeal her sentence bars her from contesting the district court's
restitution order on the grounds that it is not authorized by the Victim and
Witness Protection Act (VWPA). Because we conclude that an appeal waiver
does not bar such a challenge, we must further decide whether a defendant who
pleads guilty only to perjury may be required under the VWPA to make
restitution to a victim of a financing scheme for which she was indicted but not
convicted. We conclude that the VWPA does not authorize such an order in this
case; therefore, we vacate the order and remand for resentencing.
I.
2
Defendant Josephine L. Broughton-Jones operated Telesys Limited

International--a financial service company in Columbia, South Carolina--the
stated purpose of which was to help individuals obtain business financing
through non-standard channels. As payment for her efforts to secure financing,
Broughton-Jones would receive a hefty brokerage fee from her clients.
The transaction giving rise to this case began in 1992, when Ralph Erana, a
businessman from Vancouver, contacted Broughton-Jones in an attempt to
obtain $10 million in financing. Broughton-Jones agreed to help Erana, and she
received $25,000 from him as advance payment for her services. In connection
with the Erana transaction, Broughton-Jones contacted Thomas Gallman who,
unbeknownst to her, was then cooperating with the FBI. With Gallman's help,
the FBI set up an undercover operation in the course of which Broughton-Jones
was videotaped while she assisted in the preparation of bogus sight drafts. The
sight drafts were signed in the fictitious name of "Otto Solheim." BroughtonJones faxed these documents to Erana, apparently to make him believe that
approval of his promised financing was imminent. Later, Broughton-Jones told
Erana that Solheim's organization had refused to go through with the deal; she
never returned the $25,000 to Erana.
In March of 1993, Broughton-Jones testified before a federal grand jury that

was investigating her business dealings. While she was under oath, the
following exchange relevant to this appeal took place:
Q. Have you ever seen anybody sign the name Otto Solheim?
A. Never have.
Q. Who created the sight draft, that is Exhibit # 2, do you know?
A. I have no idea.
(JA 20) The grand jury indicted Broughton-Jones on four counts of perjury
based on her grand jury testimony and one count of wire fraud in connection
with the Erana transaction.
10
After lengthy negotiations between her lawyer and the Government,

Broughton-Jones pleaded guilty to one count of perjury, that based upon the
testimony just quoted. The Government dismissed all other charges in exchange
for her plea. After a Rule 11 hearing, the district court accepted BroughtonJones's plea to the single perjury charge and sentenced her to six months in jail,
two years supervised release, and 150 hours of community service. The court
further ordered her to make restitution of $25,000 to Erana. Broughton-Jones
then filed a motion to reduce her sentence, which the district court dismissed
without a hearing. She now appeals her sentence, challenging both the length of
her incarceration and the propriety of the restitution order.
II.
11
Broughton-Jones first contends that, although her sentence was within the
range specified by the Sentencing Guidelines, the district court should have
departed downward rather than sentencing her to six months imprisonment. We
do not have jurisdiction to consider that contention. Under United States v.
Bayerle, 898 F.2d 28, 30-31 (4th Cir.1990), a district court's decision not to
depart downward is not appealable, unless that decision was based on the trial
judge's mistaken belief that he was legally forbidden to depart downward.
Nothing in the record suggests that the district court believed it was forbidden
to depart downward in this case; therefore, its decision not to depart downward
is not appealable. Id. at 31.III.
12
Broughton-Jones's principal contention is that the district court's restitution

order was not authorized by the Victim and Witness Protection Act (VWPA),
18 U.S.C. Secs. 3663-64 (1995 Supp). As an initial matter we must determine
whether, as the Government contends, Broughton-Jones waived her right to
contest the validity of the restitution order by signing a plea agreement that
contained an appeal-waiver provision. The plea agreement includes the
following clause:
13 Defendant, JOSEPHINE L. BROUGHTON-JONES, realizing the uncertainty

The
of estimating the sentence she will ultimately receive, and fully understanding that
she has a right of direct appeal of the sentence pursuant to 18 U.S.C. Sec. 3742(a)
and the grounds listed therein, knowingly, voluntarily and expressly waives the right
to appeal her sentence on those grounds.
14
(JA 11) To determine whether this waiver clause bars Broughton-Jones from
appealing the district court's restitution order, we must decide whether the
appeal waiver was valid, and if so, whether her challenge to the restitution
order is within the scope of that waiver. See United States v. Attar, 38 F.3d
727, 731-33 (4th Cir.1994). We conclude that, although the waiver was valid,
the grounds on which Broughton-Jones contests the restitution order are
outside the scope of that waiver.

A.
15
First, the waiver was valid. A defendant may waive her right to appeal, if that
waiver is "the result of a knowing and intelligent decision to forgo the right to
appeal." Id. at 731 (quoting United States v. Wessells, 936 F.2d 165, 167 (4th
Cir.1991)); see also, e.g., United States v. Marin, 961 F.2d 493, 496 (4th
Cir.1992); United States v. Davis, 954 F.2d 182, 186 (4th Cir.1992); United
States v. Wiggins, 905 F.2d 51, 53 (4th Cir.1990). In determining whether a
defendant's waiver is "knowing and intelligent," we must examine "the
particular facts and circumstances surrounding [the] case, including the
background, experience and conduct of the accused." Davis, 954 F.2d at 186
(quoting Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461
(1938)).
16
The record indicates that Broughton-Jones's waiver was knowing and

intelligent. At the Rule 11 hearing, the trial judge established that the defendant
was educated, was represented by counsel, and had discussed with her lawyer
the nature of the charge to which she was pleading. (JA 22, 24, 27) BroughtonJones indicated during the Rule 11 colloquy that she and her lawyer had
discussed the Sentencing Guidelines and that she understood the maximum
penalties to which she could be subject. (JA 28-29) When the court specifically
questioned her regarding the voluntariness of her plea, she indicated that no one
had forced her to enter the agreement. (JA 32)
17
Also at the hearing the court asked the Government to summarize the plea
agreement. In so doing, the Government specifically outlined the appeal waiver
paragraph, further noting that the waiver had been included as a result of
extensive plea negotiations with the defense. (JA 34-35) At the end of the
Government's summary, the court asked Broughton-Jones and her counsel
separately if the Government had correctly described the agreement; both
stated, without qualification, "That is the agreement." (JA 35) Although the
district court did not question Broughton-Jones specifically about the waiver
provision itself, its failure to do so, standing alone, does not invalidate the
waiver. Davis, 954 F.2d at 186. Viewing all the circumstances under which
Broughton-Jones entered her plea, we conclude that her plea waiver was
knowing and intelligent, and was therefore valid.
B.
18
Having concluded that the defendant's waiver of her right to appeal her
sentence was valid, we now must decide whether her challenge to the district
court's sentence--that it was not authorized by the VWPA--falls within the
scope of her appeal waiver. We conclude that it does not.
19
In United States v. Marin, we recognized that even valid appeal waivers will
not bar appellate review of every sentence:[A] defendant who waives his right
to appeal does not subject himself to being sentenced entirely at the whim of
the district court. For example, a defendant could not be said to have waived his
right to appellate review of a sentence imposed in excess of the maximum
penalty provided by statute or based on a constitutionally impermissible factor
such as race.
20
961 F.2d 493, 496 (4th Cir.1992) (emphasis added); see also Attar, 38 F.3d at
732-33 (valid appeal waiver does not bar review of 6th Amendment challenge
to plea proceedings).
21
Here, Broughton-Jones contends that the district court's restitution order

exceeded its authority under the VWPA. More specifically, she points out that
18 U.S.C. Sec. 3663(a)(1) authorizes a district court to order restitution only for
losses traceable to a defendant's offense of conviction. See also Hughey v.
United States, 495 U.S. 411, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990)
(interpreting predecessor to Sec. 3663(a)(1)). Because Broughton-Jones
pleaded guilty only to perjury--a crime that caused no direct pecuniary harm to
Erana--she contends that the district court exceeded its statutory authority by
ordering her to pay restitution to Erana, an apparent victim only of the financing
scheme for which Broughton-Jones was indicted but not convicted.1
22
In considering this contention, Marin 's language making waivers inapplicable

to appeals that challenge sentences as "imposed in excess of the maximum
penalty provided by statute" is instructive. Appeals challenging sentences of
imprisonment that exceed the statutory maximum surely are such. Because a
restitution order imposed when it is not authorized by the VWPA is no less
"illegal" than a sentence of imprisonment that exceeds the statutory maximum,
appeals challenging the legality of restitution orders are similarly outside the
scope of a defendant's otherwise valid appeal waiver.
23
We therefore turn to the question whether the restitution order properly

challenged by this appeal was an illegal one that must be vacated.
IV.
24
Before 1990, the VWPA authorized restitution only "to any victim of the
24
Before 1990, the VWPA authorized restitution only "to any victim of the
offense" for which a defendant was convicted. See 18 U.S.C. Sec. 3579(a)(1)
(1985) (codified as amended at 18 U.S.C. Sec. 3663(a)(1) (1995 Supp.)). In
Hughey, the Supreme Court interpreted this requirement narrowly; it held that
where a defendant is charged with multiple crimes, but is convicted of only one
of those offenses, the sentencing court may order restitution to any victim "only
for the loss caused by the specific conduct that is the basis of the offense of
conviction." 495 U.S. at 413, 110 S.Ct. at 1981.
25
In 1990, Congress responded to Hughey by amending the VWPA. See Crime

Control Act of 1990, Pub.L. No. 101-647, Sec. 2509, 104 Stat. 4789, 4863
[hereinafter 1990 Amendments]. The 1990 Amendments made two significant
changes: 1) With respect to offenses involving a scheme, conspiracy, or pattern
of criminal activity, they broadened the class of "victims" to include any person
directly harmed by the defendant's criminal conduct, 18 U.S.C. Sec. 3663(a)(2);
and 2) They allowed courts to order restitution "to the extent agreed to by the
parties in a plea agreement," 18 U.S.C. Sec. 3663(a)(3). After Hughey and the
1990 Amendments, therefore, we analyze a district court's authority to order
restitution in two stages. First, we determine whether the parties agreed to an
amount of restitution in a plea agreement; such agreements may authorize
restitution in an amount greater than the loss attributable to the offense of
conviction. E.g., United States v. Schrimsher, 58 F.3d 608, 610 (11th
Cir.1995); United States v. Silkowski, 32 F.3d 682 (2d Cir.1994); United States
v. Arnold, 947 F.2d 1236, 1238 (5th Cir.1991); cf. United States v. Patty, 992
F.2d 1045, 105051 (10th Cir.1993) (although defendant may be ordered to pay
up to sum specified in plea agreement, Government still must prove that loss to
be repaid resulted from defendant's criminal conduct). If the plea agreement
does not provide for a larger amount, the court still may order restitution to any
"victim" to the extent of the loss caused by an offense of conviction. E.g.,
Silkowski, 32 F.3d at 689.
26
Accordingly, we first turn to Broughton-Jones's plea agreement to determine

whether she agreed to make restitution in an amount greater than the loss
caused by her offense of conviction--perjury. We conclude that she did not.
Although it does discuss sentencing matters generally, the plea agreement never
specifically mentions restitution.2 Neither did the Government address
restitution when it summarized the plea agreement at the Rule 11 hearing.
Finally, the plea agreement itself contains an integration clause, which indicates
that it sets forth the entire agreement between the Government and BroughtonJones. Thus, it appears the parties never reached an agreement regarding
restitution in the course of their plea negotiations. As a result, Sec. 3663(a)(3),
which authorizes restitution orders to the extent agreed to by the parties in a
plea agreement, provides no basis for the district court's restitution order. See
United States v. Stout, 32 F.3d 901, 904-05 (5th Cir.1994) (where defendant
never promises in plea agreement to pay particular amount of restitution, Sec.
3663(a)(3) does not authorize restitution); Gall v. United States, 21 F.3d 107,
111 (6th Cir.1994) (same).
27
This result is not changed by Broughton-Jones's acknowledgement during the

Rule 11 colloquy that, if the court accepted her guilty plea, she realized that she
could be required to make restitution to her victims. (JA 26) The bounds of a
court's power to order restitution under Sec. 3663(a)(3) are set by the plea
agreement itself. We recognize that, in cases where the plea agreement
provides for restitution in an uncertain amount, some courts have thought it
proper to examine the transcripts of the Rule 11 and sentencing hearings to
determine whether the parties actually did in that later stage agree to a specific
sum. See Schrimsher, 58 F.3d 608, 610; Silkowski, 32 F.3d at 689; United
States v. Lavin, 27 F.3d 40, 42 (2d Cir.1994). But those cases are not applicable
here, where the plea agreement makes no provision for restitution at all.
Accordingly, Broughton-Jones's acknowledgment at the Rule 11 colloquy that
she might be ordered to pay restitution does not independently invoke the
district court's power to order restitution under 18 U.S.C. Sec. 3663(a)(3).
28
Therefore, the district court's restitution order was proper only if it

compensated a victim of Broughton-Jones's perjury for some loss caused by
that offense. See 18 U.S.C. Sec. 3663(a)(1); Hughey, 495 U.S. at 413, 110 S.Ct.
at 1981. Hughey makes clear that in determining what loss flowed from the
offense of conviction, we must examine the "specific conduct" supporting
Broughton-Jones's conviction. Id. Under 18 U.S.C. Sec. 1623(a), BroughtonJones's perjury was complete when she knowingly made a "false material
declaration" before the grand jury. The Government has identified no loss that
flowed to anyone--much less specifically to Erana--as a result of this perjury
before the grand jury.3 Accordingly, we conclude that the district court's
restitution order is not authorized by 18 U.S.C. Sec. 3663(a)(1).
29
The Government attempts to avoid this conclusion by arguing that because the
transaction about which Broughton-Jones lied was the very one in which she
allegedly defrauded Erana, her fraud was "inextricably intertwined" with her
offense of conviction. Although there is a factual connection between
Broughton-Jones's perjury and her alleged financing scheme, that connection is
legally irrelevant. We conclude that Hughey and the text of the VWPA do not
allow us to stretch the "offense" involved in a perjury conviction to include any
other conduct, whether or not the subject of separate conviction, to which the
defendant's perjurious statement may have borne some relationship.
30
Nor does the broader definition of "victim" added by the 1990 Amendments
change this result. Section 3663(a)(2) expands the definition of "victim" in
certain cases:
31 the purposes of restitution, a victim of an offense that involves as an element a

For
scheme, a conspiracy, or a pattern of criminal activity means any person directly
harmed by the defendant's criminal conduct in the course of the scheme, conspiracy,
or pattern.
32
18 U.S.C. Sec. 3663(a)(2) (emphasis added). Because the elements of perjury

do not include a scheme, conspiracy, or pattern of criminal conduct, this new
definition does not expand the class of victims of Broughton-Jones's perjury
beyond those originally included under Sec. 3663(a)(1). In summary, because
Broughton-Jones's perjury did not cause the $25,000 loss to Erana compensated
by the district court's restitution order, Sec. 3663(a)(1) does not authorize that
order.
33
One final point requires consideration, however. As the Government points out,
the defendant's counsel did informally agree to the restitution order at the
sentencing hearing. When the trial judge questioned him regarding the
propriety of the restitution order, the defendant's attorney responded: "[I]f you
would order restitution, if she wins the Georgia Lottery, that will be fine." (JA
59) This informal consent is something different from a mere failure to object,
which would neither authorize restitution nor interfere with our ability to review
the defendant's appeal. See United States v. Mortimer, 52 F.3d 429, 436 (2d
Cir.1995) (failure to object did not bar appellate review of restitution order);
United States v. Baker, 25 F.3d 1452, 1456 (9th Cir.1994) (same). But it is
something less than a formal concession in a plea agreement, which 18 U.S.C.
Sec. 3663(a)(3) does make a proper basis for restitution orders.
34
What this statement amounts to, then, is an informal agreement by a defendant

that a certain--otherwise unauthorized--order would be proper in his case.
Because a court's power to order restitution is statutory in origin, a defendant's
consent to a particular restitution order cannot, without more, authorize a
restitution order not authorized by the statutory source. Cf. United States v.
DeSalvo, 41 F.3d 505 (9th Cir.1994) ("Federal courts do not have inherent
power to order restitution. The power to order restitution must therefore stem
from some statutory source ....") (citations omitted). The 1990 Amendments to
the VWPA provide the only formal way for the statutory limits to be varied: by
specific agreements of the parties formally embodied in plea agreements. See
18 U.S.C. Sec. 3663(a)(3). To allow parties to vary the statutory limits by
consenting outside a plea agreement would be to read into the VWPA a further
amendment that Congress did not make. Accordingly, we conclude that the
defendant's informal agreement to the restitution order at sentencing does not
authorize the district court's otherwise unauthorized order.
V.
35
Because the restitution order was an illegal one, we must vacate the entire
sentence of which it was a part and remand for resentencing in light of this
opinion.4
SO ORDERED
Congress partially superseded the holding in Hughey when it amended the

VWPA in 1990. See Crime Control Act of 1990, Pub.L. No. 101-647, Sec.
2509, 104 Stat. 4789, 4863. We earlier recognized that, although the 1990
Amendments narrowed Hughey 's holding, Hughey still applies where, as here,
a restitution award "clearly encompasses an offense for which the defendant
was not convicted." United States v. Bailey, 975 F.2d 1028, 1033 n. 1 (4th
Cir.1992). Accordingly, we continue to apply Hughey as limited by the 1990
Amendments
Paragraph 7 of the plea agreement provides as follows:

The Defendant, JOSEPHINE L. BROUGHTON-JONES, understands that the
matter of sentencing is within the sole discretion of the Court, and that the
sentence applicable to her case will be imposed in conformity with the United
States Sentencing Commission Guidelines, Application Notes and Policy
Statements. The Defendant also understands that her sentence has not yet been
determined by the Court, and that any estimate of a probable sentencing range
she may have received from her attorney, the Attorneys for the Government, or
the United States Probation Office is only a prediction, not a promise, and is
not binding on the Attorneys for the Government, the Probation Office or the
Court.
(JA 11)
Though we have been advised of no decision imposing or affirming restitution

for loss to a victim of perjury, we may assume that such a loss is conceivable
(e.g., by delaying Government efforts to recover stolen or defrauded money),
but no factual basis for any such claim is present here
Our mandate for resentencing is without any further limitation than that the
sentence imposed may not, on the present record, include any order of
restitution. Otherwise, resentencing may proceed de novo, constrained only by
the constitutional bar against vindictiveness, North Carolina v. Pearce, 395 U.S.
711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969), the controlling statutes, and the
Sentencing Guidelines. See United States v. Bell, 5 F.3d 64, 67 (4th Cir.1993)
(unless specifically limited by court of appeals' mandate, resentencing on
remand is de novo)

United States v. Josephine L. Broughton-Jones, A/K/A Josie Broughton, 71 F.3d 1143, 4th Cir. (1995)

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71 F.

UNITED STATES of America, Plaintiff-Appellee,

United States Court of Appeals,

ARGUED: Benjamin Cecil Duster, Chicago, IL, for Appellant. Terry L.

Defendant Josephine L. Broughton-Jones operated Telesys Limited

In March of 1993, Broughton-Jones testified before a federal grand jury that

Q. Who created the sight draft, that is Exhibit # 2, do you know?

After lengthy negotiations between her lawyer and the Government,

Broughton-Jones's principal contention is that the district court's restitution

13 Defendant, JOSEPHINE L. BROUGHTON-JONES, realizing the uncertainty

outside the scope of that waiver.

The record indicates that Broughton-Jones's waiver was knowing and

Here, Broughton-Jones contends that the district court's restitution order

In considering this contention, Marin 's language making waivers inapplicable

We therefore turn to the question whether the restitution order properly

In 1990, Congress responded to Hughey by amending the VWPA. See Crime

Accordingly, we first turn to Broughton-Jones's plea agreement to determine

This result is not changed by Broughton-Jones's acknowledgement during the

Therefore, the district court's restitution order was proper only if it

31 the purposes of restitution, a victim of an offense that involves as an element a

18 U.S.C. Sec. 3663(a)(2) (emphasis added). Because the elements of perjury

What this statement amounts to, then, is an informal agreement by a defendant

Congress partially superseded the holding in Hughey when it amended the

Paragraph 7 of the plea agreement provides as follows:

Though we have been advised of no decision imposing or affirming restitution

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