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United States v. Mahoney

decided: October 7, 1988.


Appeal from the United States District Court for the Central District of Illinois, Peoria Division, No. 87-10019-Michael M. Mihm, Judge.

Wood, Coffey, and Easterbrook, Circuit Judges.

Author: Coffey

COFFEY, Circuit Judge.

Defendant-Appellant Clinton Dennis Mahoney appeals from the trial judge's order requiring him to pay $288,655.00 as restitution to the victims of a mail fraud scheme under the Victim and Witness Protection Act of 1982, 18 U.S.C. §§ 3579-80 ("VWPA"). We vacate the order of restitution and remand for resentencing in light of the guidelines set forth in this opinion.


Clinton Dennis Mahoney, formerly the owner of two automobile dealerships in Peru and Spring Valley, Illinois, pleaded guilty to a criminal information charging him with three counts of mail fraud in violation of 18 U.S.C. § 1341. The information alleged that Mahoney engaged in a scheme to obtain duplicate "Manufacturer's Statement of Origin" on a single automobile from the Ford Motor Company through the United States mails and then to use those statements to obtain financing from two separate lending institutions on the single car. The district judge accepted Mahoney's guilty plea, and sentenced him to a one-year period of incarceration to be followed by two concurrent five-year periods of probation. In addition, and as a condition of his probation,*fn1 the defendant was ordered to pay a total of $288,655.00 to the victims of his mail fraud scheme on a schedule of regular monthly payments over a five-year period as required by 18 U.S.C. § 3579(f)(2) of the VWPA.*fn2

At the sentencing hearing, the court heard testimony about Mahoney's current financial situation and his ability to pay restitution.*fn3 Mahoney testified, that he was employed as a salesman at Torri's Used Cars, which paid him $600 per week, plus bonuses when business was good. This salary was used to support himself and his dependent wife, who suffers from paranoid schizophrenia. Although she has not required extensive hospital treatment, Mahoney testified that his physician informed him that his close presence and support are necessary to prevent a deterioration of her condition. (Mahoney's five grown children are self-supporting.) Ne further testified that he had given up all of his assets in an effort to compensate the banks that had lost money as a result of his fraud scheme.*fn4

Upon concluding the presentation of evidence, the government made these recommendations:

"The government's recommendation is, as to Count I, that the defendant be imprisoned for a period of five years and given a $1,000 fine. As to Count II that he receive two concurrent periods of probation to commence upon termination of any period of incarceration under Count I, and that he be ordered to pay restitution in the amount of $73,850 to the State Bank of Cherry; $124,805 to the First National Bank of Oglesby; and $90,000 to the First Bank of Princeton. For a total of $288,655. Your honor, that is the recommendation of the government."

Defense counsel objected to the government's recommendation, stating that:

"Dennis is at this point without assets. Dennis at this point, if he were placed in jail, could not pay restitution, not to say he can make full and complete restitution now even if he is permitted to be on probation. But the fact of the matter remains that he has shown a willingness and an ability to pay to those banks as much as he possibly could to help make up for the wrong he committed, and he can continue to do this."

Finally, in his personal statement to the court, Mahoney stated that "[i]f you see fit to let me out there, I will do my very best to pay this back."

In imposing the court's sentence, the judge made these comments with respect to the defendant's ability to comply with the $288,655 order of restitution:

"I know that your wife is very dependent upon you. I appreciate that situation, and I understand it. I also think that it is time that some other members of your family start playing a greater role in helping you perform your responsibilities regarding the family. You have two sons that live in Texas. Maybe they should give some thought to maintaining a closer contact with what is going on in Illinois and doing their share to help out with the situation. In terms of restitution, I have no way of ...

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