United States District Court, D. Arizona
REPORT AND RECOMMENDATION
Honorable Bruce G. Macdonald United States Magistrate Judge.
matter was referred to Magistrate Judge Macdonald for a
judgment debtor's examination and consideration of
subsequent issues related to the enforcement of restitution.
See Order 9/5/2017 (Doc. 465); Order 8/30/2018 (Doc.
504); see also LRCiv. 72.2. The Government has filed
its Status Report (Doc. 496) and Defendant has responded
(Doc. 505). On November 14, 2018, the Court held a status
conference in this matter. Minute Entry 11/13/2018 (Doc.
509). In late January 2019, the Court spoke with
Defendant's Probation Officer, and a second status
conference was held on March 1, 2019. See Minute Entry
3/1/2019 (Doc. 519). Having considered the Government's
submissions, the argument of counsel, and the input of
Probation, this matter is ripe for adjudication.
initial matter, there are no currently pending charges
against Defendant. Furthermore, the Probation Officer has
indicated to the Court his disinclination to seek revocation
at this juncture. See Hr'g Tr. 11/14/2018 (Doc.
511) at 10:18-25. Regardless, “[t]he court may after
considering the factors set forth in section 3553(a)(1)[-(7)]
. . . modify, reduce, or enlarge the conditions of supervised
release, at any time prior to the expiration or termination
of the term of supervised release . . . [or] revoke a term of
supervised release[.]” 18 U.S.C. § 3583(c).
Standard of Proof for Revocation of Supervised
purposes of a supervised release revocation hearing, the
district court need only conclude that a preponderance of the
evidence supports revocation.” United States v.
Jeremiah, 493 F.3d 1042, 1045 (9th Cir. 2007) (quoting
United States v. Lomayaoma, 86 F.3d 142, 147 (9th
Cir. 1996); see also 18 U.S.C. § 3583(c)(3).
“Ordinarily ‘[t]here is sufficient evidence to
support a conviction if, viewing the evidence in the light
most favorable to the government, any rational trier of fact
could have found the essential elements' of a
violation.” Jeremiah, 493 F.3d at 1045
(quoting United States v. Weber, 320 F.3d 1047, 1050
(9th Cir. 2013)) (alterations in original).
plead guilty to one count of Conspiracy to Commit Bank Fraud
and one count of Conspiracy to Commit Money Laundering.
See Judgment (Doc. 385). Defendant was sentenced to
two terms of thirty (30) months imprisonment, to run
concurrently, and sixty (60) months of supervised release on
Count One and thirty-six (36) months of supervised release on
Count Twenty. Id. at 1. The restitution was ordered
“to be paid jointly and severally with the
co-defendants in this case and any related cases.”
Id. Defendant was further ordered that he
“shall pay the $2, 596, 464.90 restitution and any
remaining balance of the $200 special assessment at a rate of
not less than $400 or 10% of the household income, whichever
is greater, to commence within 30 days of release from
imprisonment.” Id. at 3.
restitution obligation began on approximately June 6, 2015.
Def.'s Response to Status Rpt. (Doc. 508) at 1. It is
undisputed that from October 2014 through August 2018,
Defendant was not fulfilling his restitution obligations.
See Govt.'s Status Rpt. (Doc. 496), Spaulding
Decl. (Exh. “A”) at ¶ 3 & Fruit
Debtor's Exam 12/20/2017 (Exh. “C”) at
97:1-14; Def.'s Response (Doc. 508) at 5-6.
Government has produced voluminous records related to
Defendants financial dealings dating back to 2009.
Unfortunately, many of the accounts that Defendant had
pre-incarceration have since been closed. At this time,
Defendant appears to have access to three (3) remaining
accounts: 1) a Chase Bank account xxxxxx5710, which is in his
parents' names, but for his benefit; 2) a personal Wells
Fargo account xxxxxx7397, opened in July 2017; and 3) a Wells
Fargo account xxxxxx2524 for Tucson Professional Steam
Cleaners, LLC. See Govt.'s Status Rpt. (Doc.
496), Chase Bank 5710 & Wells Fargo 7397 Acct. Stmts.
(Exh. “B”) (Doc. 502) at 33-36 & Fruit
Debtor's Exam. I 12/20/2017 (Exh. “C”) at
94:18-95:20 & Reges M. Fruit Depo. 3/29/2018 (Exh.
“I”) at 8:15-25.
manages Tucson Professional Steam Cleaners, LLC
(“TPSC”), a business purchased by his parents in
June 2015 for his benefit. Govt.'s Status Rpt. (Doc.
496), Fruit Debtor's Exam. I 12/20/2017 (Exh.
“C”) at 38:8-20, 89:1-15 & Edwin Fruit Depo.
3/29/2018 (Exh. “J”) at 18:2-20:9 & Bill of
Sale 6/15/2015 (Exh. “B”). The sale price was
$25, 000.00 plus a $10, 000.00 promissory note. Govt.'s
Status Rpt. (Doc. 496), Bill of Sale 6/15/2015 (Exh.
“B”) & Edwin Fruit Depo. 3/29/2018 (Exh.
“J”) at 18:2- 20:9 & Reges M. Fruit Depo.
3/29/2018 (Exh. “I”) at 25:2-9 & Fruit
Debtor's Exam. I 12/20/2017 (Exh. “C”) at
89:1-15. Defendant receives $2, 000.00 per month salary from
TPSC. Govt.'s Status Rpt. (Doc. 496), Edwin Fruit Depo.
3/29/2018 (Exh. “J”) at 20:5-6 & Reges M.
Fruit Depo. 3/29/2018 (Exh. “I”) at 25:18-23.
Defendant additionally receives approximately $1, 000.00 per
month salary from A.W. Turf. Govt.'s Status Rpt. (Doc.
496), Fruit Debtor's Exam. II 2/7/2018 (Exh.
“C”) at 129:23-130:23. On October 31, 2016,
Defendant filed for Chapter 7 Bankruptcy. See In re
Fruit, D. Ariz., No. BK-16-12502-BMW. The Government
notes that Fruit did not accurately disclose his assets in
his bankruptcy petition. See In re Fruit, D. Ariz.,
No. BK-16-12502- BMW, Ch. 7 Voluntary Pet. for Individuals
Filing for Bankr. (Doc. 1). The Government did not seek to
have the bankruptcy case reopened or charge Defendant
regarding the alleged omissions. Defendant currently lives in
an apartment with rent of $935.00/month. Govt.'s Status
Rpt. (Doc. 496), Fruit Debtor's Exam. II 2/7/2018 (Exh.
“C”) at 129:1-11.
Government's Asset Investigator acknowledges that
“[i]t is difficult to compute Fruit's available
income and expenditures[.]” Govt.'s Status Rpt.
(Doc. 496), Spaulding Decl. (Exh. “A”) at ¶
69. The Court's review of the submitted documents
confirms this opinion. The Court is concerned with
Defendant's ongoing reckless money management. At the
latest status conference, the Government suggested in lieu of
revocation, a finding that Tucson Professional Steam
Cleaners, LLC belongs to Defendant and he should be ordered
to pay $500.00 per month in restitution. Even if, however,
the Court attributes $8, 000.00 paid from Defendant's now
closed business bank account for Scooters, LLC to TPSC's
prior owner, George Prassas, the total cost of the business
was $25, 000.00 plus a $10, 000.00 promissory note. The
evidence is unclear regarding the source of the $27, 000.00
balance for the business.
and his Probation Officer assert that he is able to pay
$300.00 per month. In light of the evidence, the Court finds
that this is an appropriate adjustment to Defendant's
restitution payments. The Court will also recommend
additional conditions that are meant to allow the Court,
Probation, and the Government to maintain a clearer picture
of Defendant's financial situation. See 18
U.S.C. § 3583(d); see also Jeremiah, 493 F.3d