By: John A. Schwab
In the appeal of former Pennsylvania State Senator, Vincent J. Fumo, the U.S. Court of Appeals for the Third Circuit has ordered Fumo to pay a larger share of the restitution to one of his victims. With its decision, the Court rejected the arguments raised by Fumo in his appeal and only partially granted the government’s request for relief.
This case marked Fumo’s second appeal to the Third Circuit. In 2009, Mr. Fumo was convicted of 137 counts of fraud, tax evasion, and obstruction of justice based on allegations that he defrauded the Citizens Alliance, a non-profit which he founded, as well as the Pennsylvania State Senate and Independence Seaport Museum. After successfully appealing his sentence from the district court in 2011, Fumo was re-sentenced in November 2011 to 55 months imprisonment and ordered to pay $3,340,839 in restitution to be apportioned among the three institutions defrauded by Fumo: $792,802 to the Citizens Alliance; $1,413,819 to the State Senate; and $134,217 to the Independence Seaport Museum. Both Fumo and Ruth Arnao, a former aide to Fumo and director of Citizens Alliance, were ordered to pay the Citizens Alliance restitution amount “jointly and severally.”
Although the Third Circuit refused to impose the full amount on Fumo, it agreed that Fumo and Arnao should not be saddled with equal restitution amounts due to their differing “culpability and ability to pay.”
In this appeal, the government challenged the district’s court joint and several apportionment of the Citizens Alliance restitution between Fumo and Arnao. Although the Third Circuit refused to impose the full amount on Fumo, it agreed that Fumo and Arnao should not be saddled with equal restitution amounts due to their differing “culpability and ability to pay.” The Third Circuit found that the district court lacked sufficient support to conclude that Fumo and Arnao were equally culpable. Similarly, regarding the ability to pay restitution, the Third Circuit noted a dramatic contrast between the financial resources of Fumo and Arnao. Fumo has a net worth of over $11 million and a monthly income of $88,757. On the other hand, Arnao has a net worth of over $1.4 million and a monthly income of $3,208. Based on this reasoning, the Third Circuit remanded the case to the district court with instructions to reapportion the Citizens Alliance restitution between Fumo and Arnao.
This time around, the court rejected Fumo’s arguments. Fumo claimed that the district court, when it increased the restitution amounts on remand, exceeded its prior mandate from the Third Circuit. In its rejection of this argument, the court observed that the district court’s most recent sentence was consistent with its prior sentence. The court found that it was appropriate for the district court to rely on the “sentencing package” doctrine which acknowledges that, “[b]ecause a district court’s ‘original intent may be undermined by altering one portion of the calculus,’ an appellate court when reversing one part of a defendant’s sentence ‘may vacate the entire sentence…so that, on remand, the trial court can reconfigure the sentencing plan.”
The full text of the opinion can be found here: http://www.ca3.uscourts.gov/opinarch/114499np.pdf
Pietragallo Partners John Schwab and Jennifer Bouriat will be participating in the ACBA’s November 21, 2019 CLE, “Parallel Government Investigations: The Civil Side of a Criminal Investigation.” During this two-hour course, attendees will hear from a panel of experts about the handling of parallel proceedings in government investigations including learning how federal prosecutors investigate and… Read more »Read More
A colleague and I had a conversation recently about Uber drivers and other ride-sharing platforms who are using ‘dash-cams’ to film the road ahead or passengers. These types of cameras protect drivers from claims of inappropriate conduct or dangerous driving and they’re starting to pop up in many vehicles. My colleague had “taken an Uber”… Read more »Read More
Nationally-recognized qui tam attorney, Marc S. Raspanti, will be speaking at the Federal Bar Association’s 2020 Qui Tam Conference in Washington, DC on Thursday, February 27, 2020. This two-day conference will feature experienced FCA litigators from a variety of perspectives who will dive into advanced topics and discuss emerging trends and key developments pertaining to… Read more »Read More
Pietragallo Gordon Alfano Bosick & Raspanti, LLP Partner Michael A. Morse will be presenting at the Pennsylvania Bar Institute’s (“PBI”) Health Law Institute on March 11-12, 2020. Mr. Morse’s session topic is, “Preparing for the Fight of Your Life: Anatomy of a Health Care Fraud Prosecution.” The PBI notes that the Health Law Institute is,… Read more »Read More