United States of America v. James Smith

*This decision was originally issued as an “unpublished decision”
filed on July 31, 2003. On August 28, 2003, the court designated the
opinion as one recommend ed for full-text publication.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0335P (6th Cir.)
File Name: 03a0335p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JAMES SMITH,
Defendant- Appellant.
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Nos. 01-1124/2427
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 00-80112—John Feikens, District Judge.
Argued: January 31, 2003
Decided and Filed: July 31, 2003*
Before: BATCHELDER, MOORE, and CLAY, Circuit
Judges.
_________________
COUNSEL
ARGUED: Nancy L. McGunn, FEDERAL PUBLIC
DEFENDERS OFFICE, Detroit, Michigan, for Appellant.
2 United States v. Smith Nos. 01-1124/2427
Jennifer J. Peregord, ASSISTANT UNITED STATES
ATTORNEY, Detroit, Michigan, for Appellee. ON BRIEF:
Nancy L. McGunn, Penny R. Beardslee, FEDERAL PUBLIC
DEFENDERS OFFICE, Detroit, Michigan, for Appellant.
Jennifer J. Peregord, ASSISTANT UNITED STATES
ATTORNEY, Detroit, Michigan, for Appellee.
_________________
OPINION
_________________
CLAY, Circuit Judge. This is a consolidated appeal. In
Case No. 01-1124, Defendant, James Smith, appeals from the
district court’s judgment entered on January 5, 2001,
sentencing Defendant to twenty-one months of imprisonment,
three years of supervised release, and a restitution payment of
$61,774.80 following Defendant’s guilty plea conviction for
making false statements to the Social Security Administration
(“the SSA”) in violation of 18 U.S.C. § 1001. In Case No.
01-2427, Defendant appeals from the district court’s order
entered on October 4, 2001, granting the government’s
motion to enter a document into the record. For the reasons
set forth below, we VACATE IN PART Defendant’s
sentence in Case No. 01-1124, we REVERSE the district
court’s order in Case No. 01-2427, and we REMAND both
cases for further proceedings consistent with this opinion.
BACKGROUND
The government filed a criminal complaint on February 14,
2000, alleging that Defendant fraudulently collected disability
benefits, totaling $61,744.80, from the SSA using the name
and social security number of Michael C. Johnson from
November of 1995 to January of 2000 in violation of 18
U.S.C. § 641. On the same day the complaint was filed, the
district court issued a warrant for Defendant’s arrest.
Defendant turned himself into the United States Marshal
Service on February 24, 2000. Thereafter, on March 15,

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Nos. 01-1124/2427 United States v. Smith 3
2000, the district court dismissed the complaint without
prejudice.
The government filed an information on August 16, 2000,
charging Defendant with one count of making false
statements to the SSA in violation of 18 U.S.C. § 1001.
Specifically, the information charged Defendant with
knowingly and wilfully making the following false
statements: (1) that his name was Michael C. Johnson, (2) that
his social security number was identical to Michael C.
Johnson’s social security number, and (3) that he had never
used a different name or social security number. On the same
day the information was filed, Defendant filed a waiver of
indictment.
At his arraignment held on September 11, 2000, Defendant
entered a guilty plea to the information pursuant to a Rule 11
plea agreement. The plea agreement provides in relevant part:
A. . . . The defendant stipulates that all the allegations
set forth in the information are true and constitute a
violation of the statute.
B. The maximum term of imprisonment shall not
exceed twenty-one (21) months.
C. The maximum term of supervised release shall not
exceed three (3) years. Violation of any condition of
supervised release may result in the defendant being
imprisoned for the entire term of supervised release or
being prosecuted for contempt of court under 18 U.S.C.
§ 401(3).
D. The maximum fine shall not exceed the statutory
maximum.
E. The court is required to impose a $100 special
assessment. The defendant will pay the assessment
4 United States v. Smith Nos. 01-1124/2427
before sentence is imposed and will provide a receipt at
sentencing.
F. The court can order the defendant to pay restitution
for all losses resulting from his relevant offense conduct.
G. The defendant, by entering into this plea agreement,
knowingly and voluntarily gives up any right he may
have to appeal any sentence which is within the
parameters of this agreement as delineated above.
. . . .
J. This agreement incorporates the complete
understanding between the parties, and no other promises
have been made by the United States Attorney’s Office
for the Eastern District of Michigan to the defendant or
to the attorney for the defendant.
(J.A. at 14-15.) Before accepting Defendant’s guilty plea, the
district court explained the provisions of the plea agreement
to Defendant. The district court then asked Defendant
whether he understood the plea agreement, and Defendant
replied “Yes, sir.” (J.A. at 98.)
The United States Probation Office issued a Presentence
Investigation Report (“PSR”) on December 18, 2000. The
PSR determined that Defendant caused the SSA loss in the
amount of $61,744.80, and recommended that Defendant pay
restitution in that amount. The PSR also determined that
Defendant had a total offense level of 11 and a criminal
history category of IV. The PSR therefore recommended a
sentencing range of 18 to 24 months of imprisonment.
Defendant filed a sentencing memorandum on
December 27, 2000, objecting to, inter alia, the PSR’s
determination of the amount of loss. Defendant argued that
had he used his own name and social security number, he
could have legally collected $28,064.00 in social security

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Nos. 01-1124/2427 United States v. Smith 5
income benefits from the SSA due to his diagnosed mental
illness. Defendant argued that the $28,064.00 in social
security income benefits he could have legally collected
should be offset against the $61,744.80 in disability benefits
he fraudulently collected. Defendant therefore argued that the
SSA sustained loss in the amount of $33,710.00, and that he
should pay restitution in that amount.
At the sentencing hearing held on January 3, 2001, the
government argued that the amount of loss and restitution
should equal the amount of disability benefits Defendant
fraudulently collected, $61,774.80. The district court agreed
and stated that it will order Defendant to pay restitution in the
amount of “roughly $61,000.” (J.A. at 124.) The district
court further stated that it will order the “matter . . . be
resolved with the Social Security Administration as to
whether or not . . . [the alleged $28,064.00 in social security
income benefits Defendant could have legally collected] is a
legitimate offset.” (J.A. at 125-26.) Defense counsel stated
that Defendant would agree to the district court’s order if the
order specified that the government has the burden of proving
Defendant is not entitled to an offset. The district court stated
that it was “not going to get involved in a quarrel as to who
has the burden of proof.” (J.A. at 126.)
The district court entered judgment against Defendant on
January 5, 2001, sentencing Defendant to twenty-one months
of imprisonment, three years of supervised release, and a
restitution payment of $61,774.80. In the judgment, the
district court noted:
Defendant Smith contends that he was legally entitled to
receive social security benefits in the amount of
$28,064.00 and that this should be off-set against his
illegal receipt of $61,774,80. If the Social Security
Administration on inquiry of the Office of the United
States Attorney for the Eastern District of Michigan
agrees with this contention, then this amount of
restitution will be reduced by that amount.
6 United States v. Smith Nos. 01-1124/2427
(J.A. at 53.) Defendant timely filed a notice of appeal on
January 9, 2001, appealing the district court’s judgment (Case
No. 01-1124).
By letter dated September 5, 2001, the SSA notified the
government that it had a policy of not paying social security
income benefits retroactively to an individual who, like
Defendant, fraudulently collected disability benefits. On
September 13, 2001, the government filed a motion to admit
the SSA’s September 5, 2001 letter into the record pursuant
to Federal Rule of Appellate Procedure 10(e)(2). In its
motion, the government claimed that it was unaware of the
district court’s notation in the judgment directing the SSA to
resolve the offset dispute until Case No. 01-1124 was on
appeal. Defendant filed a response to the government’s
motion on September 28, 2001. In his response, Defendant
objected to the admission of the letter into the record and
requested a hearing on the matter. By order entered on
October 4, 2001, the district court granted the government’s
motion without conducting a hearing on the matter.
Defendant timely filed a notice of appeal on October 11,
2001, appealing the district court’s order (Case No. 01-2427).
DISCUSSION
I. WAIVER OF RIGHT TO APPEAL (Case No. 01-1124)
This Court reviews the question of whether a defendant
waived his right to appeal his sentence in a valid plea
agreement de novo. United States v. Stubbs, 279 F.3d 402,
411 (6th Cir. 2002).
It is well settled that a defendant in a criminal case may
waive his right to appeal his sentence in a valid plea
agreement. See United States v. Fleming, 239 F.3d 761, 763-
64 (6th Cir. 2001); Stubbs, 279 F.3d at 410. For a plea
agreement to be constitutionally valid, a defendant must have
entered into the agreement knowingly and voluntarily. See
Fleming, 239 F.3d at 764. “When a [d]efendant waives his

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Nos. 01-1124/2427 United States v. Smith 7
right to appeal his sentence in a valid plea agreement, this
Court is bound by that agreement and will not review the
sentence except in limited circumstances.” Stubbs, 279 F.3d
at 410.
In the plea agreement, Defendant agreed to “pay restitution
for all losses resulting from his relevant offense conduct,” and
to “knowingly and voluntarily give[ ] up any right he may
have to appeal any sentence which is within the parameters of
this agreement[.]” (J.A. at 15.) The government argues that
the above-quoted language indicates that Defendant
knowingly and voluntarily waived his right to appeal his
sentence in any respect. Defendant, on the other hand, argues
that he did not knowingly and voluntarily waive his right to
appeal the manner in which the district court determined the
amount of restitution.
The plea agreement is ambiguous as to the amount and
manner of determining restitution. The plea agreement merely
provides that the district court can order Defendant to pay
restitution for all losses resulting from his relevant offense
conduct. The plea agreement, however, does not provide the
manner in which the district court can determine the amount
of loss. Because Defendant argues on appeal that the district
court erred in determining that the SSA sustained a loss in the
amount of $61,744.80, the manner in which the district court
determined the amount of loss is the primary issue on appeal,
which falls outside the scope of the plea agreement. We
therefore hold that Defendant’s appeal is not waived. See
United States v. Johnson, 979 F.2d 396, 399 (6th Cir. 1992)
(stating that “ambiguity [in a plea agreement] must be
construed against the government”).
II. RESTITUTION (Case No. 01-1124)
This Court reviews the propriety of ordering restitution de
novo and the amount of restitution ordered for abuse of
discretion. United States v. Bearden, 274 F.3d 1031, 1040
(6th Cir. 2001).
8 United States v. Smith Nos. 01-1124/2427
Section 5E1.1 of the Sentencing Guidelines provides in
relevant part that “[i]n the case of an identifiable victim, the
court shall . . . enter a restitution order for the full amount of
the victim’s loss, if such order is authorized under 18 U.S.C.
§ . . . 3663.” United States Sentencing Commission,
Guidelines Manual, § 5E1.1(a)(1) (Nov. 2002). Section 3663
provides in relevant part that “[t]he court, when sentencing a
defendant convicted of an offense under this title [Title 18],
. . . may order . . . that the defendant make restitution to any
victim of such offense . . . ” 18 U.S.C. § 3663(a)(1)(A).
Section 3663(a)(3) provides that “[t]he court may also order
restitution in any criminal case to the extent agreed to by the
parties in a plea agreement.” 18 U.S.C. § 3663(a)(3).
Section 3664 provides in relevant part that “the court shall
order the probation officer to obtain and include in its
presentence report, or in a separate report, as the court may
direct, information sufficient for the court to exercise its
discretion in fashioning a restitution order. The report shall
include, to the extent practicable, a complete accounting of
the losses to each victim, any restitution owed pursuant to a
plea agreement, and information relating to the economic
circumstances of each defendant.” 18 U.S.C. § 3664(a).
Section 3664(f)(1)(A) provides that “[i]n each order of
restitution, the court shall order restitution to each victim in
the full amount of each victim’s losses as determined by the
court and without consideration of the economic
circumstances of the defendant.” 18 U.S.C. § 3664(f)(1)(A).
Section 3664(e) provides “[a]ny dispute as to the proper
amount or type of restitution shall be resolved by the court by
the preponderance of the evidence. The burden of
demonstrating the amount of the loss sustained by a victim as
a result of the offense shall be on the attorney for the
Government.” 18 U.S.C. § 3664(e).

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Nos. 01-1124/2427 United States v. Smith 9
1The December 1, 2002 amendments to the Federal Rules of
Criminal Procedure replaced R ule 32(c)(1) with Rule 32(i)(3). United
States v. Treadway, 328 F.3d 87 8, 885 n.3 (6th Cir. 2003). Because we
are reviewing the district court’s failure to make specific factual findings
at Defendant’s sentencing hearing held on January 3, 2001, we are
applying the rule in effect at that time–Rule 32(c)(1).
Federal Rule of Criminal Procedure (“Rule”) 32(c)(1)1
provides in relevant part that “[a]t the sentencing hearing . . .
[f]or each matter controverted, the court must make either a
finding on the allegation or a determination that no finding is
necessary because the controverted matter will not be taken
into account in, or will not affect, sentencing.” Fed. R. Crim.
P. 32(c)(1). This Court requires “literal compliance” with
Rule 32(c)(1). United States v. Fry, 831 F.2d 664, 667 (6th
Cir. 1987). This Court has made it clear that Rule 32(c)(1)
“prohibits a court faced with a dispute over sentencing factors
from adopting the factual findings of the presentence report
without making factual determinations of its own.” United
States v. Monus, 128 F.3d 376, 396 (6th Cir. 1997). USSG
§ 6A3.1(b) provides that “[t]he court shall resolve disputed
sentencing factors at a sentencing hearing in accordance with
[Federal] Rule [of Criminal Procedure] 32(c)(1).”
Defendant argues that the district court violated Rule
32(c)(1) by failing to make factual findings regarding the
disputed amount of loss sustained by the SSA at the time of
sentencing. Defendant points out that the dispute was
presented to the district court in the pleadings and at the
sentencing hearing. For instance, in his sentencing
memorandum, Defendant argued that had he used his own
name and social security number, he could have legally
collected $28,064.00 in social security income benefits from
the SSA due to his diagnosed mental illness. Defendant
argued that the $28,064.00 in social security income benefits
he could have legally collected should be offset against the
$61,744.80 in disability benefits he fraudulently collected.
Defendant therefore argued that the SSA sustained a loss in
10 United States v. Smith Nos. 01-1124/2427
the amount of $33,710.00, and that he should pay restitution
in that amount.
At the sentencing hearing, Defendant again presented his
argument to the district court. The government responded by
arguing that the amount of loss and restitution should equal
the amount of disability benefits Defendant fraudulently
collected. The district court acknowledged both parties’
arguments, but failed to make any factual findings regarding
the offset dispute. Rather, the district court stated that it will
order Defendant to pay restitution in the amount of “roughly
$61,000,” and that the “matter . . . be resolved with the Social
Security Administration as to whether or not . . . [the alleged
$28,064.00 in social security income benefits Defendant
could have legally collected] is a legitimate offset.” (J.A. at
124, 125-26.) When defense counsel stated that Defendant
would agree to the district court’s order if the order specified
that the government has the burden of proving Defendant is
not entitled to an offset, the district court stated that it was
“not going to get involved in a quarrel as to who has the
burden of proof.” (J.A. at 126.)
Thereafter, the district court entered judgment against
Defendant sentencing him to pay restitution in the precise
amount of disability benefits he fraudulently collected,
$61,744.80, as the PSR had recommended. In addition, the
district court delegated its duty of resolving the offset dispute
to the SSA by noting in the judgment that “[i]f the Social
Security Administration on inquiry of the Office of the United
States Attorney for the Eastern District of Michigan agrees
with . . . [Defendant’s] contention, then this amount of
restitution will be reduced by . . . [$28,064.00].” (J.A. at 53.)
We hold that the district court violated Rule 32(c)(1) by
failing to make factual findings, at the time of sentencing,
regarding whether the alleged $28,064.00 in social security
income benefits Defendant claims he could have legally
collected had he used his own name and social security
number should have been offset against the $61,744.80 in

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Nos. 01-1124/2427 United States v. Smith 11
2Section 3572(d)(1) provides:
A person sentenced to pay a fine or other monetary penalty,
including restitution, shall make such payment imm ediately,
unless, in the interest of justice, the court provides for payment
on a date certain or in installments.
18 U.S.C. § 35 72(d)(1).
disability benefits Defendant fraudulently collected from the
SSA. The district court erred in delegating its duty to resolve
the offset dispute to the SSA, and in refusing to respond to
Defendant’s objection that the government had the burden of
proof. We therefore vacate Defendant’s sentence as to the
amount of restitution and remand this case for resentencing in
compliance with Rule 32(c)(1). See United States v. Monus,
128 F.3d 376, 396-97 (6th Cir. 1998) (holding that the district
court violated Rule 32(c)(1) by failing to make factual
findings as to the amount of loss attributed to the defendant);
United States v. Parrott, 148 F.3d 629, 633 (6th Cir.1998)
(holding that a district court cannot adopt “the factual
findings of the presentence report without making factual
determinations of its own” when the facts are in dispute).
Defendant also argues that the district court violated 18
U.S.C. § 3572(d)(1)2 by not establishing a restitution payment
schedule. We hold that Defendant’s argument is without
merit. The district court stated in the judgment that Defendant
“shall PAY THE BALANCE OF RESTITUTION OWED IN
MONTHLY PAYMENTS AS RECOMMENDED BY THE
PROBATION DEPARTMENT AND APPROVED BY THE
COURT.” This Court has approved such payment
scheduling. See Weinberger v. United States, 268 F.3d 346,
359-60 (6th Cir. 2001).
12 United States v. Smith Nos. 01-1124/2427
III. EXPANSION OF THE RECORD
Federal Rule of Appellate Procedure (“Appellate Rule”) 10
provides in relevant part:
(a) Composition of the Record on Appeal. The
following items constitute the record on appeal:
(1) the original papers and exhibits filed in the district
court;
(2) the transcript of proceedings, if any; and
(3) a certified copy of the docket entries prepared by the
district clerk.
. . . .
(e) Correction or Modification of the Record.
. . . .
(2) If anything material to either party is omitted from or
misstated in the record by error or accident, the omission
or misstatement may be corrected and a supplemental
record may be certified and forwarded:
(A) on stipulation of the parties;
(B) by the district court before or after the record has
been forwarded; or
(C) by the court of appeals.
(3) All other questions as to the form and content of the
record must be presented to the court of appeals.
Fed. R. App. P. 10(a) & (e). “The purpose of . . . [Appellate
Rule 10(e)(2)] is to allow the [ ] court to correct omissions
from or misstatements in the record for appeal, not to
introduce new evidence in the court of appeals.” S & E
Shipping Corp. v. Chesapeake & O. Ry. Co., 678 F.2d 636,
641 (6th Cir. 1982).
In compliance with the district court’s directive as set forth
in the judgment, the SSA notified the government, by letter
dated September 5, 2001, that it had a policy of not paying
social security income benefits retroactively to an individual
who, like Defendant, fraudulently collected disability
benefits. The government filed a motion to admit the letter

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Nos. 01-1124/2427 United States v. Smith 13
3Section 36 64(d)(5) provides in relevant part:
If the victim’s losses are not ascertainable by the date that is 10
days prior to sentencing, the attorney for the Governme nt or the
into the record pursuant to Appellate Rule 10(e)(2). In its
motion, the government claimed that it was unaware of the
district court’s directive until Case No. 01-1124 was on
appeal. Defendant filed a response to the motion objecting to
the admission of the letter into the record and requesting a
hearing on the matter. The district court issued a one-page
conclusory order admitting the letter into the record, without
conducting a hearing on the matter.
Defendant argues that the district court erred in admitting
the letter into the record because the letter neither qualifies as
a document under Appellate Rule 10(a) nor as an omission
under Appellate Rule 10(e)(2). Defendant points out that the
letter was not in existence until eight months after the
judgment in Case No. 01-1124 was entered on January 5,
2001. Defendant argues that because the letter was not in
existence while Case No. 01-1124 was pending before the
district court, the district court did not have the right to
consider the contents of the letter in finalizing its restitution
order.
The government concedes that the letter neither qualifies as
a document under Appellate Rule 10(a) nor as an omission
under Appellate Rule 10(e)(2). The government, however,
argues that we may consider the contents of the letter because
it was admitted into the record in direct response to the
district court’s directive.
Under these circumstances, the district court’s decision to
admit the letter into the record was plainly unreasonable. The
district court neither afforded Defendant the opportunity to
respond or comment upon the letter, nor made factual
findings regarding the contents of the letter. In addition, the
district court violated 18 U.S.C. § 3664(d)(5)3 by failing to
14 United States v. Smith Nos. 01-1124/2427
probation officer shall so inform the court, and the court shall set
a date for the final determination o f the victim's losses, not to
exceed 90 d ays after sentencing.
18 U.S.C. § 36 64(d)(5).
finalize the restitution order within 90 days after sentencing.
See United States v. Vandeberg, 201 F.3d 805, 814 (6th Cir.
2000) (holding that the district court erred in unilaterally
amending and finalizing the restitution order without
affording the parties an opportunity to object within the 90
days after sentencing, as required by § 3664(d)(5)). We
therefore vacate the district court’s order and remand this case
for further proceedings consistent with Rule 32(c)(1) and
§ 3664(d)(5).
CONCLUSION
For the forgoing reasons, we VACATE IN PART
Defendant’s sentence in Case No. 01-1124, we REVERSE
the district court’s order in Case No. 01-2427, and we
REMAND both cases for further proceedings.

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