Free Motion for Modification of Sentence - District Court of Arizona - Arizona

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PAUL K. CHARLTON United States Attorney District of Arizona RICHARD MESH Assistant U.S. Attorney Arizona State Bar No. 002716 Two Renaissance Square 40 N. Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Telephone: (602) 514-7500 [email protected]

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA United States of America CR-04-276-04-PHX-SMM Plaintiff, v. David Roy Honderd, Defendant. MOTION AND STIPULATION FOR MODIFICATION OF RESTITUTION

The United States of America, through it's undersigned attorneys and the defendant, pursuant to Fed. R.Crim. P. 35(b)(i)(B), Correcting or Reducing a Sentence, hereby file this motion and stipulation that the court may enter its amended order modifying the original judgement amount of restitution of $185,771.76 to the lesser amount $92,815.00. (See Attachment 1) This request for modification of the of the restitution order is based upon an updated calculation derived from records provided by the victims, ECMC (Attachment 2) and SunTrust Bank (Attachment 3) incident to the sentencing of co-defendant, Robert C. Hazlett, now set for November 6, 2006. This motion and stipulation are supported by the following Memorandum of Points and Authorities.

Case 2:04-cr-00276-SMM

Document 264

Filed 10/10/2006

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Respectfully submitted this 10 th day of October, 2006. PAUL K. CHARLTON United States Attorney District of Arizona S/Richard I. Mesh RICHARD MESH Assistant U.S. Attorney

MEMORANDUM OF POINTS AND AUTHORITIES A. Law. Fed.R.Crim.P. 35(b), Correcting or Reducing a Sentence, provides that upon the government's motion made within one year of sentencing, the court may reduce a sentence if: (1)(A) - after sentencing, the defendant provided substantial assistance in the prosecution of another person, and (B) - reducing the sentence accords with the Sentencing Commission Guidelines and policy statements. B. Background. The defendant was sentenced on October 31, 2005, pursuant to a cooperation plea agreement which required him to testify and pay restitution in an amount determined appropriate by the court. The defendant did testify at the government's request against codefendant Hazlett. Further the defendant's restitution was to be determined on the basis of only those losses to the victims arising from the defendant's personal participation in the conspiracy rather than vicarious liability for all losses caused by the conspiracy. (Plea Agreement ¶ 3(d)). At the time of the defendant's sentencing on October 31, 2005, the court ordered the defendant to pay restitution of $185,771.76. That amount was urged by the government as the then known losses occasioned by the defendant's preparation of fraudulent student loan applications which subsequently went into default. The original restitution amount represented the total of the principal amount outstanding as of the time of defaults of those loans. 2

Case 2:04-cr-00276-SMM

Document 264

Filed 10/10/2006

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On June 7, 2006, the government recalculated the losses arising from the conspiracy's fraudulent activities as those amounts will be urged as part of the restitution order as to codefendant Robert Hazlett. Based upon information from the victims, ECMC and SunTrust Bank, current as of April 26, 2006, defendant Honderd's restitution amount should be reduced to $92,815.00. (See Attachment 1) This updated amount is a lesser sum than originally set. It is based upon the fact that since the time of the former student-debtors' defaults, many of the debtors have either paid off their fraudulent acquired loans or returned to good standing by resuming monthly payments. The modified restitution amount represents only the unpaid principal currently due on the original fraudulently obtained loans. There is no claim made for accrued interest or other fees. This computation is consistent with the methodology employed when determining the original restitution amount. C. Distribution of Restitution. This case has an unusual aspect as to restitution in that the actual debtors remain responsible for paying off their fraudulently acquired loans. The government guaranteed loans are not subject to discharge in bankruptcy and are subject to government collection via offset of tax refunds, aside from ordinary garnishment. The victim bank only has ordinary collection remedies. The history of five years collection effort as to these defaulted loans has revealed approximately half or the original indebtedness has been satisfied by the student debtors. It is anticipated that some percentage of the remaining defaulted loans will be satisfied by the actual debtors in the future. From this stand point, it is obvious that the government requested modification of restitution is for an amount that potentially may be paid by other persons. Additionally, it should be obvious that some of the defaulted loans will never be satisfied by the debtors because of death, incapacitation, or conscientious avoidance of their obligation. Therefore, it is submitted by the government that the defendant should be entitled to a restitution hearing at a latter date for the purposes of obtaining an accounting as to what balance, if any, of restitution still remains enforceable against him. 3

Case 2:04-cr-00276-SMM

Document 264

Filed 10/10/2006

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The defendant is currently on five years probation. During that period of time, given best efforts at payment of restitution, the defendant's restitution payments will to some extent make the victims whole for their actual losses. It is submitted to the court that permitting the defendant an opportunity for a further hearing as to the amount of residual restitution at the end of probation is an equitable way of insuring that the victims are compensated only for their unreimbursed losses allowed by the law. D. Conclusion. Based upon al the foregoing it is respectfully urged that the court enter its order directing the defendant to pay restitution to the victims in the modified total amount of $92,815.00. Excludable delay under 18 U.S.C. § 3161(h) will not occur since the defendant has been previously sentenced in this matter. Respectfully submitted this 10 th day of October, 2006. PAUL K. CHARLTON United States Attorney District of Arizona S/Richard I. Mesh RICHARD MESH Assistant U.S. Attorney STIPULATION Defendant, David Honderd, through his undersigned attorney, hereby joins in the above motion and stipulates that the court may grant the requested modification of restitution.

Date: October 2, 2006

__S/_______________________ GREG CLARK Attorney for Defendant Honderd

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1 Certificate of Service 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 David M. Reicher Foley & Lardner, LLP 777 E. Wisconsin Ave., Milwaukee, WI 53202 Fax 414-297-4900 Attorney for Victim SunTrust Bank Neil Graber Supervisory Federal Probation Officer 230 N. 1 st Ave., Ste. 406 Phoenix, AZ 85003 Laurie Huusko, Educational Credit Management Corp. 101 E. 5 th St., Ste. 200 St. Paul, MN 55101 Fax 651-325-3495 Attorney for Victim ECMC I hereby certify that on the above day, I mailed/faxed a copy of the above document to the following: Greg Clark, Attorney at Law Attorney for Deft Evans Booker T. Evans Greenberg Traurig, LLP Attorney for Deft Hazlett I hereby certify that on the above day, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:

Case 2:04-cr-00276-SMM

Document 264

Filed 10/10/2006

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