United States of America v. Ryan James Craig

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 08-3541& 09-1153
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UNITED STATES OF AMERICA
v.
RYAN JAMES CRAIG,
Appellant
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On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. No. 06-cr-00219-001)
District Judge: Honorable Christopher C. Conner
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Submitted Under Third Circuit LAR 34.1(a)
October 29, 2009
Before: SLOVITER, FUENTES and HARDIMAN, Circuit Judges.
(Filed: December 7, 2009)
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OPINION OF THE COURT
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HARDIMAN, Circuit Judge.
Ryan Craig appeals the judgment of the United States District Court for the Middle
District of Pennsylvania (District Court) granting the Government’s request to divert a
portion of his seized property to victims in an unrelated federal criminal judgment entered
by the United States District Court for the District of Rhode Island in 2003 (Rhode Island
Court). For the reasons that follow, we will vacate and remand.
I.
Because we write for the parties, we recount only those facts necessary to our
decision.
In 2007, a jury convicted Craig of wire fraud in violation of 18 U.S.C. § 1343.
The District Court sentenced Craig to 71 months imprisonment and ordered him to pay
restitution to his victims in the amount of $12,411.00, as well as a special assessment of
$300.00. Because the United States Attorney for the Middle District of Pennsylvania had
previously seized $16,432.00 from Craig, it sought to satisfy the restitution order from
those funds. Craig conceded that the District Court could apply $12,711.00 of the seized
funds to satisfy the restitution order and special assessment, but requested the return of
the remaining $3,631.00 pursuant to Rule 41(g) of the Federal Rules of Criminal
Procedure. The Government opposed Craig’s motion, arguing that the balance of the
seized funds should be used to pay the unsatisfied restitution order entered by the Rhode
Island Court.

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Craig concedes that he cannot challenge the District Court’s order granting the1
Government’s request regarding the $12,711.00 on appeal because he waived that
argument in the District Court.
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On July 28, 2008, the District Court granted the Government’s request regarding
the $12,711.00, but addressed neither Craig’s motion for return of property nor the
Government’s request regarding restitution for the Rhode Island victims. On December1
30, 2008, the District Court denied Craig’s motion for return of property and ordered the
Government to remit the balance of $3,631.00 to the Clerk of the Rhode Island Court.
Craig appeals the December 30 order and we have jurisdiction to consider his appeal
pursuant to 28 U.S.C. § 1291.
II.
Title 18, Section 3556 authorizes district courts to order restitution in criminal
cases: “[t]he court, in imposing a sentence on a defendant who has been found guilty of
an offense . . . may order restitution in accordance with section 3663.” Section 3663
further provides: “[t]he court, when sentencing a defendant convicted of an offense under
this title [of which wire fraud is included] . . . may order . . . that the defendant make
restitution to any victim of such offense, or if the victim is deceased, to the victim’s
estate. The court may also order, if agreed to by the parties in a plea agreement,
restitution to persons other than the victim of the offense.” 18 U.S.C. § 3663(a)(1)(A)
(emphasis added). Accordingly, restitution may only be paid to an individual if one of
two conditions is met: (1) the individual is a “victim” in the present case; or (2) the

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restitution payment was agreed to in a plea agreement. Because Craig did not enter into a
plea agreement in this case, we need consider only the first condition in assessing whether
the District Court’s order directing payment to the Rhode Island victims was proper.
Section 3663 defines “victim” as “a person directly and proximately harmed as a
result of the commission of an offense for which restitution may be ordered including, in
the case of an offense that involves as an element a scheme, conspiracy, or pattern of
criminal activity, any person directly harmed by the defendant’s criminal conduct in the
course of the scheme, conspiracy, or pattern.” 18 U.S.C. § 3663(a)(2). Under this
definition, the individuals injured as a result of Craig’s 2003 conviction for wire fraud in
the District of Rhode Island do not qualify as “victims” because they were not “directly
and proximately harmed” as a result of Craig’s present offense. Their injuries were
confined to the 2003 crime for which Craig was sentenced to 27 months imprisonment
and ordered to pay restitution in the amount of $58,000.00. The fact that Craig has not
yet fulfilled that restitutionary obligation does not grant the District Court authority to
offer restitution to those individuals in this case.
Furthermore, the Government itself cannot claim to be a victim in either the
present case or the Rhode Island case. The Government argues that the District Court
was authorized to apply the seized funds because, as the District Court duly noted, an
order of restitution made pursuant to § 3663—as was made in Rhode Island—is “a lien in
favor of the United States on all property and rights to property of the person fined.” 18

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U.S.C. § 3613(c). However, that argument improperly conflates the Government’s
entitlement to the funds with the District Court’s authority to divert those funds in this
case. Though we have previously held that a governmental body may be considered a
“victim” under § 3663, see United States v. Hand, 863 F.2d 1100, 1103 (3d Cir. 1988)
(holding that the United States Attorney’s office was entitled to restitution for time and
resources wasted in light of the defendant’s impermissible conduct as a juror at trial), the
Government does not assert that any governmental body was harmed by Craig’s actions.
Rather, the Government is attempting to use its position as a common party—the
prosecution—in both the Rhode Island and Pennsylvania cases as a means to compensate
a private third party. This is not what § 3663 contemplates.
The Government also argues that the District Court was authorized to transfer the
seized funds to the Rhode Island victims because it assumed jurisdiction over Craig’s
supervised release for his sentence on the 2003 crime. The Government argues that “[b]y
accepting transfer of jurisdiction over Craig’s supervised release, the district court had the
authority to enforce the provision pertaining to payment of restitution.” We disagree
because the duty to oversee Craig’s supervised release does not confer upon the District
Court any authority to direct restitution in the Rhode Island case. Section 3663 authorizes
a judgment of restitution at the time of sentencing, but not thereafter. See United States v.
Sasnett, 925 F.2d 392, 399 (11th Cir. 1991) (quoting 18 U.S.C. § 3663(a)(1)(A) (“[t]he
court, when sentencing a defendant . . .)). The fact that the District Court is empowered

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to conduct a supervised release revocation hearing does not change our analysis.
Accordingly, the Rhode Island victims could only receive an order of restitution when
Craig was sentenced in 2003.
In sum, we hold that the District Court lacked the statutory authority to order the
transfer of seized funds to the Rhode Island Court for the purpose of facilitating the
payment of restitution in an unrelated case. This does not mean, however, that the
victims in the Rhode Island case are precluded from seeking to garnish or attach the
seized funds or otherwise pursue collection of what is owed to them through any lawful
means that may be available to them.
For the foregoing reasons, we will vacate the judgment of the District Court and
remand the case for proceedings consistent with this opinion.

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Following a conviction for conspiracy to commit wire fraud, the district court in2
Rhode Island entered an order of restitution in the amount of $58,002 and a $100 special
assessment. Thereafter, during the wire fraud investigation in the Pennsylvania case, law
enforcement authorities seized $16,342 of Craig’s funds. After a jury convicted Craig in
the Pennsylvania case, the District Court entered a judgment ordering Craig to pay
$12,411 in restitution to victims in that case and a $300 special assessment. This left a
balance of $3,631 in seized funds. The District Court subsequently denied Craig’s
motion for return of the remaining monies and ordered that the $3,631 be directed
towards satisfying the restitution order issued in the Rhode Island case.
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United States v. Craig
Nos. 08-3541 & 08-3541
Fuentes, Circuit Judge, dissenting.
The majority concludes that the District Court for the Middle District of
Pennsylvania could not direct payment of money seized from James Craig, who was
convicted of wire fraud, towards a restitution order entered against him in an earlier case
in the District of Rhode Island. In so concluding, the majority primarily relies upon 182
U.S.C. § 3556, which
provides that:
The court, in imposing a sentence on a defendant who has been
found guilty of an offense shall order restitution in accordance with
section 3663A, and may order restitution in accordance with section
3663. The procedures under section 3664 shall apply to all orders of
restitution under this section.
18 U.S.C. § 3663 states that restitution may be ordered during sentencing, but must
be directed at a victim of the offense in the present case. In vacating the District Court’s

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Jurisdiction over Craig’s supervised release was initially transferred from the3
District of Rhode Island to the Eastern District of Pennsylvania on August 16, 2005,
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judgment, the majority emphasizes that the Rhode Island victims were not “directly and
proximately harmed” by Craig’s present offense.
In my view, § 3556 is not relevant because the Pennsylvania District Court
did not enter a restitution order as to Craig’s victims in Rhode Island. Nor was it required
to. That restitution order had already been entered by the Rhode Island District Court.
Once an order of restitution is entered, it “may be enforced by the United States . . . by all
. . . available means.” 18 U.S.C. § 3664(m)(1)(A). In this case, when Craig’s supervised
release was transferred from Rhode Island to the District Court in Pennsylvania, the
Pennsylvania Court acquired jurisdiction to enforce the Rhode Island restitution order “by
all . . . available means,” including directing that the balance of Craig’s seized funds be
used to satisfy the Rhode Island restitution order.
In rejecting the Government’s contention that the duty to oversee Craig’s
supervised release conferred upon the District Court authority to direct restitution in the
Rhode Island case, the majority again emphasizes that § 3663 authorizes a judgment of
restitution at sentencing, but not thereafter. However, my view is that a court can direct
payment not only pursuant to its own orders, but also in accord with a valid restitution
order over which it has assumed jurisdiction.
The District Court in Pennsylvania assumed jurisdiction, pursuant to 18
U.S.C. § 3605, over Craig’s supervised release in the Rhode Island case. The terms of3

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pursuant to 18 U.S.C. § 3605. The Eastern District of Pennsylvania subsequently
transferred jurisdiction to the Middle District of Pennsylvania on June 14, 2007.
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Craig’s supervised release, as outlined in the judgment in the Rhode Island case,
expressly provide that “[i]f this judgment imposes a fine or a restitution obligation, it
shall be a condition of supervised release that the defendant pay any such fine or
restitution that remains unpaid at the commencement of the term of supervised release . . .
.” (App. 62 (emphasis added).) Hence, in obtaining jurisdiction over Craig’s supervised
release in the case that originated in Rhode Island, the District Court also obtained
jurisdiction over enforcement of the restitution order that was entered in that case and was
a condition of the supervised release. Moreover, the statute authorizing the transfer of
jurisdiction, 18 U.S.C. § 3605, states that “[a] court to which jurisdiction is transferred
under this section is authorized to exercise all powers over the probationer or releasee that
are permitted by this subchapter or subchapter B or D of chapter 227.” Section 3583,
which is included in subchapter D of chapter 227, details the conditions of supervised
release and grants a court authority to set certain discretionary conditions of probation
outlined in § 3563(b). 18 U.S.C. 3583(d). These include making “restitution to a victim
of the offense under section 3556 . . . .” Id. § 3563(b)(2). Section 3583 also grants a
court discretion, after considering certain factors, to “modify, reduce or enlarge the
conditions of supervised release . . . .” Id. § 3583(e)(2). Although these provisions do
not speak directly to the factual scenario in this case, I read this broad grant of authority

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to include the power to enforce and direct payment towards an existing restitution order in
a case over which jurisdiction is assumed under § 3605.
Affirming the District Court’s decision would be an efficient and proper
means of providing payment to the Rhode Island victims. It avoids unnecessarily
requiring those victims to pursue potentially costly legal action to obtain funds the
District Court already possesses authority to direct towards the restitution. Given my
conclusion that the District Court had authority to direct payment towards the valid
restitution order over which it possessed jurisdiction, I must respectfully dissent from the
majority’s decision.

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