United States of America v. Kevin Clinton

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted June 30, 2023*
Decided July 11, 2023
Before
FRANK H. EASTERBROOK, Circuit Judge
MICHAEL Y. SCUDDER, Circuit Judge
DORIS L. PRYOR, Circuit Judge
Nos. 22-1130 & 22-2502
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
KEVIN CLINTON,
Defendant-Appellant.
Appeals from the United States District
Court for the Northern District of
Indiana, South Bend Division.
No. 3:18-CR-136-RLM-MGG
Michael G. Gotsch, Sr.
Magistrate Judge.
O R D E R
Kevin Clinton was convicted of mail fraud, sentenced to prison, and ordered to
pay restitution to his former employer (the victim of his fraud). To satisfy part of the
* We have agreed to decide the case without oral argument because the briefs and
record adequately present the facts and legal arguments, and oral argument would not
significantly aid the court. F ED. R. A PP . P. 34(a)(2)(C).
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with F ED. R. APP . P. 32.1

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Nos. 22-1130 & 22-2502 Page 2
restitution, the government petitioned the court to garnish two accounts that Clinton
held at a bank. Clinton objected to the garnishment and requested that the magistrate
judge, who had been presiding by consent, recuse himself. After the judge refused to
recuse himself and ordered garnishment, Clinton unsuccessfully sought emergency
relief, arguing that the bank wrongly responded to the garnishment order. Clinton
appealed twice: First, he appealed the garnishment order; and second, he appealed the
order denying emergency relief. We consolidated the two appeals and affirm the district
court’s orders in all respects.
Clinton was convicted of mail fraud, see 18 U.S.C. § 1341, and ordered to pay his
former employer about $2.2 million, which the government sought via garnishment. It
planned to garnish an Individual Retirement Account and a brokerage account Clinton
had at Edward Jones. See 28 U.S.C. § 3205. The IRA, held by Clinton alone, had an
estimated value over $165,000. The brokerage account was held by Clinton and his wife,
Eva, as joint tenants. Its estimated market value was over $18,000.
The court received competing views about the garnishment. Clinton argued that
the government could not obtain all the funds in his IRA because the funds were
“earnings” subject to a 25% cap under the Consumer Credit Protection Act, 15 U.S.C.
§ 1673. He stated that his IRA included contributions from four employers and his
family periodically withdrew payments from it. He also contended that the government
could not garnish his joint brokerage account because his wife had no other significant
income and depleting the account would impoverish her and their two children. The
court also received filings showing that the family’s monthly expenses were $5,500,
Eva’s monthly income was $1,400, and Eva had the potential to increase her income
because of her enhanced job qualifications. The government argued that under the
Mandatory Victims Restitution Act, see 18 U.S.C. § 3613, it was entitled to all the funds
in both accounts, the IRA funds were not “earnings” subject to the 25% cap, and the
family’s financial hardship did not substantiate a defense to garnishment.
Clinton also sought other relief. First, he asked that the magistrate judge recuse
himself because, according to Clinton’s research, the judge and the owners of his former
employer were affiliated through a Jewish community in South Bend and that tie would
bias the judge. He also requested that the court appoint a guardian ad litem to represent
his daughters’ interest in the accounts. Lastly, he offered his own restitution plan by
calculating state and federal taxes, applying the supposed 25% cap on withdrawals, and
requesting that his wife control the accounts.

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Nos. 22-1130 & 22-2502 Page 3
The judge rejected Clinton’s arguments. First, the judge did not recuse himself or
appoint representation for the daughters. He explained that he had no connection to
Clinton’s former employer nor a stake in the restitution, and he would, as statutorily
required, consider the needs of Clinton’s daughters in scheduling garnishment. Second,
the court ordered garnishment. It explained that the 25% cap did not apply to Clinton’s
IRA because withdrawals from it did not follow any retirement program. Complying
with 18 U.S.C. § 3664(f)(2), the court then evaluated Clinton’s assets, his and his wife’s
projected earnings, and Clinton’s financial obligations, including care for their two
children and a large mortgage. The court ruled that, though the government was
entitled to all funds in both accounts, Clinton’s wife would receive $10,000 from the IRA
and half of the property in the joint account for her expenses and to supplement the
couple’s income. With that adjustment, the court found that the record “does not
support the dire [financial] situation” that Clinton described. Finally, it rejected
Clinton’s proposed restitution schedule and tax calculation, instructing Edward Jones to
turn over the garnished funds “less the federal and state tax liability incurred upon
liquidation of both accounts.”
After Edward Jones withdrew the funds from Clinton’s accounts, Clinton
unsuccessfully sought emergency relief, arguing that the bank incorrectly calculated tax
liability and left the wrong amount for his wife. In denying his motions, the court
explained that Clinton could not assert claims on behalf of his wife and if the bank left
the wrong amount for her, she could bring a separate civil action against the bank. It
also explained that it deferred to Edward Jones’s internal process for liquidating
accounts and that Clinton provided no support to substantiate the alleged errors.
On appeal Clinton first maintains that the magistrate judge should have recused
himself. In taking an independent (de novo) look at this matter, see United States v. Barr,
960 F.3d 906, 919–20 (7th Cir. 2020), we disagree. To require recusal under 28 U.S.C.
§ 455(a), Clinton had to supply evidence that would lead an objective observer to
“entertain a significant doubt” about the judge’s impartiality. Barr, 960 F.3d at 919
(citations omitted). Clinton repeats his view that the magistrate judge is allied to his
former employer through a Jewish community in South Bend. But the record contains
no evidence of any connection that would persuade an objective person of a
disqualifying bias. He also argues that by delaying the case, “nitpicking” Clinton’s
filings, and advancing arguments not raised by the government, the judge showed bias
against him. See 28 U.S.C. § 455(b). But a court’s reasonable case-management decisions,
criticisms of inadequate filings, and observations of flawed positions do not alone show
a bias that requires recusal. See Barr, 960 F.3d at 920–21.

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Nos. 22-1130 & 22-2502 Page 4
Second, Clinton argues that the garnishment order was wrong because the court
did not treat the withdrawals from his IRA as “earnings” subject to a 25% cap and did
not adequately consider his financial obligation to his dependents. To the extent that
these arguments contest legal rulings, we review those rulings de novo, and insofar as
they involve fact findings, we assess the rulings for clear error. United States v. Sloan,
505 F.3d 685, 694 (7th Cir. 2007).
The court properly ruled that the garnishment of Clinton’s IRA was not subject
to the 25% cap under the Consumer Credit Protection Act. We have previously rejected
the view, implicit in Clinton’s position, that “because his retirement funds derive
directly from his earned wages, i.e., his employer deposits a portion of his earned wages
in his retirement account each paycheck, the funds should be considered earnings
under the” Act. United States v. Sayyed, 862 F.3d 615, 619 (7th Cir. 2017). Instead, as we
have explained, Congress provided that this cap applies only to outflows from a
retirement account that are “periodic payments pursuant to a retirement program.” Id.;
15 U.S.C. § 1672(a). That did not occur here. Clinton’s own filings amply support the
court’s factual finding that he withdrew funds as needed rather than under a retirement
program; thus, the funds are not “earnings” subject to the cap. See id. Because Clinton
had control over the amount and timing of IRA withdrawals, the government could
reach the full account for restitution. See id. at 619–20; 18 U.S.C. § 3613(c).
The court also adequately considered the needs of Clinton’s family in the
garnishment order. In accordance with 18 U.S.C. § 3664(f)(2), the court balanced
Clinton’s financial resources, Eva’s projected income (which was, it is undisputed, likely
to rise), and the family’s recurring obligations. Based on that evidence, it reasonably
found that, by allowing Eva to retain $10,000 of the IRA and half the brokerage account,
the government could garnish the accounts—to which it was legally entitled in full—
without devastating the family. Because Clinton does not offer a persuasive reason
suggesting that this finding was clear error, we will not disturb it. See, e.g., United States
v. Ghuman, 966 F.3d 567, 581 (7th Cir. 2020) (no reversible error when court’s schedule
for restitution adequately took economic circumstances into account); United States v.
Hosking, 567 F.3d 329, 336 (7th Cir. 2009) (no reversible error when the court’s payment
order reasonably recognized financial resources and obligations), abrogated on other
grounds by Lagos v. United States, 138 S. Ct. 1684 (2018).
Finally, Clinton insists that the district court should have ruled that Edward
Jones withdrew too much money from his account and miscalculated his taxes. But he
does not tell us how much money was and should have been withdrawn, what the

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Nos. 22-1130 & 22-2502 Page 5
correct tax calculation was, and why it was wrong for the court to delegate to Edward
Jones the calculation of taxes. Thus, he has not developed an argument that Edward
Jones violated the court’s order or that the order was itself flawed or departed from the
Mandatory Victims Restitution Act. See F ED. R. A PP . P. 28(a)(8); Yasinskyy v. Holder,
724 F.3d 983, 989 (7th Cir. 2013); see also 28 U.S.C. § 3205; 18 U.S.C. § 3664. In any event,
any withdrawal or calculation error by Edward Jones would not allow Clinton to
recover funds for himself or his wife in this garnishment case. See 18 U.S.C. § 3664(p).
AFFIRMED

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