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United States v. Armstrong

United States District Court, E.D. Michigan, Southern Division

May 2, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
ARTHUR ARMSTRONG, Defendant.

          OPINION AND ORDER DENYING DEFENDANT RELIEF FROM THE WRIT OF GARNISHMENT

          LINDA V. PARKER U.S. DISTRICT JUDGE

         On October 12, 2016, Defendant Arthur Armstrong (“Defendant”) pled guilty to one count of conspiracy to commit wire fraud in violation of 18 U.S.C. §§ 1343 and 1349. (United States v. Halloun, et al., 16-cr-20102, ECF No. 36.) On February 1, 2017, this Court sentenced Defendant to twelve months of supervised release. (United States v. Halloun, et al., 16-cr-20102, ECF No. 43 at Pg ID 247.) As part of his judgment and Rule 11 Plea Agreement, Defendant is required to pay $100, 941.59 in restitution. (United States v. Halloun, et al., 16-cr-20102, ECF No. 42 at Pg ID 250; ECF No. 36 at Pg ID 219.)

         Presently before the Court is Defendant's request for relief from the restitution order and garnishments, filed November 2, 2017. (ECF No. 13.) The Government filed a response on November 15, 2017. (ECF No. 15.) On January 4, 2018, Defendant provided the Court with a personal monthly budget reflecting his monthly income and expenses. This Court held a hearing on January 16, 2018 and permitted Defendant to supplement his personal monthly budget to reflect his economic hardship. For the reasons set out below, the Court denies Defendant's request.

         I. Background

         On October 12, 2016, as part of Defendant's Plea Agreement, Defendant agreed to the payment of restitution in the amount of $100, 941.59. (United States v. Halloun, et al., 16-cr-20102, ECF Nos. 36, 43 at Pg ID 247.) (United States v. Halloun, et al., 16-cr-20102, ECF No. 43 at Pg ID 247.) Since the judgment, the Government has engaged in collection efforts. Through the Treasury Offset Program (“TOP”) the Government received $543.00 in June 2017, which they believe was from Defendant's federal income tax refund. (ECF No. 15 at Pg ID 68.) At the time of the hearing, since August 2017, the Government has received a monthly payment of $215.00 believed to be an administrative offset from Defendant's social security benefits. (Id.)

         To further collect on the debt, on April 3, 2017, the Government filed an application for writ of continuing garnishment. (ECF No. 1.) The request was submitted to the Michigan Department of Treasury. (Id.; ECF No. 3.) On August 16, 2017 and August 24, 2017, the Government filed an application for writ of continuing garnishment for General Motors and Fidelity Investments. (ECF Nos. 4 & 5.) Fidelity Investments answered the garnishment on September 11, 2017 stating that Defendant receives a monthly benefit of $835.83. (ECF No. 10 at Pg ID 56.) On October 4, 2017, this Court ordered Fidelity Investments to remit twenty-five percent of Defendant's monthly pension to the Government. (ECF No. 11.)

         On November 2, 2017, Defendant sent a letter to the Court requesting a hearing to reduce or eliminate the garnishments against him because of financial hardship. (ECF No. 13.) The Government contends that Defendant's request is untimely and not properly before the Court. (ECF No. 15 at Pg ID 66.) On December 6, 2017, this Court scheduled a garnishment hearing and ordered Defendant to provide the Court with support for change of his financial circumstances. A hearing was held on January 16, 2018. Since the hearing, Defendant has submitted financial documents to the Government, which have been forwarded to this Court. The Government filed a supplemental response on April 6, 2018. (ECF No. 20.)

         II. Applicable Law & Analysis

         The Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C. §§ 3663A-3664, requires sentencing courts to order criminal defendants to pay restitution to their victims. “The MVRA, pursuant to § 3664(m)(1)(A)(I), ‘provides the Government authority to enforce victim restitution orders in the same manner that it recovers fines and by all other available means.'” United States v. Jendo, No. 13-50226, 2013 U.S. Dist. LEXIS 112610, at *3 (E.D. Mich. July 22, 2013). The government may enforce restitution orders through garnishments. 28 U.S.C. § 3205(a). A judgment debtor can object to a garnishment proceeding in two ways. First, within twenty days of receipt of the garnishee's answer, the judgment debtor may file an objection to the answer, stating “the grounds for the objection and bear the burden of proving such grounds.” 28 U.S.C. § 3205(c)(5). Next, pursuant to 28 U.S.C. § 3202(d), within twenty days of receiving the notice described in section 3202(b), the judgment debtor may request a hearing to quash the garnishment. However, the garnishment hearing is limited to the following:

(1) the probable validity of any claim of exemption by the judgment debtor;
(2) compliance with any statutory requirement for the issuance of the postjudgment remedy granted; and
(3) if the judgment is by default and only to the extent that the Constitution or another law of the United States provides a right to a hearing on the issue, to-
(A) the probable validity of the claim for the debt which is merged in ...

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