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United States District Court

Eastern District of Michigan

United States of America,

Plaintiff,
Hon. Nancy G. Edmunds
v.
Criminal Case No. 10-20403
Kwame M. Kilpatrick,

Defendant.
/

Governments Supplemental Brief Regarding

Kilpatricks Restitution Calculation on Remand

After the Sixth Circuits remand, the government initially argued

that defendant Kwame Kilpatricks restitution to DWSD should be

recalculated as $1,637,087.50. (R.581: Govt Restitution Br., 17135,

17137). Having re-reviewed the record, Kilpatricks arguments, and the

Sixth Circuits opinion, the government now concedes that the Court

should enter a slightly more conservative restitution amount:

$1,520,653.50. That amount represents the difference between (a) what

DWSD paid to Lakeshore Engineering and defendant Bobby Ferguson

on contract CM-2014, and (b) what DWSD would have paid to the

contractors who would have won CM-2014 if not for Fergusons and

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Kilpatricks scheme to manipulate the bidding on the contract in

Fergusons and Lakeshores favor. That amount is also the same

restitution amount for DWSD that the Sixth Circuit suggested in its

opinion. United States v. Kilpatrick, 798 F.3d 365, 391 n.3 (6th Cir.

2015).

Given the governments concession, no restitution hearing is now

required. The Sixth Circuit issued only a limited remand for proper

calculation of the [restitution] award. Id. at 391. It expressly deferred

to this Courts discretion on whether to hold a hearing for that

calculationstating only that the Court may hold a hearing. Id. at

39091. Nothing in the restitution statute otherwise requires a hearing.

United States v. Vandeberg, 201 F.3d 805, 813 (6th Cir. 2000). And

there is no factual disputeor any other controversythat would

necessitate a restitution hearing. The Court should therefore decide this

issue on the briefs and existing record, and it should enter an order and

amended judgment requiring Kilpatrick to pay $1,520,653.50 in

restitution to DWSD.

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Argument

I. As the Sixth Circuit suggested, Kilpatricks restitution to DWSD

should be $1,520,653.50, not the $1,637,087.50 amount that the
government suggested in its initial post-remand brief.

Kilpatricks restitution to DWSD should be recalculated as

$1,520,653.50the same amount that the Sixth Circuit suggested in its

opinion on direct appeal. United States v. Kilpatrick, 798 F.3d 365, 391

n.3 (6th Cir. 2015). As the Sixth Circuit explained, that amount is the

additional money that DWSD was forced to pay on a large water-main

contract, CM-2014, after Kilpatrick and Ferguson extorted Lakeshore

and manipulated the bidding on the contract in Fergusons and

Lakeshores favor. Id. CM-2014 was the subject of its own extortion

count (count nine) and was also part of the charged RICO conspiracy.

And as the government acknowledged in its initial post-remand brief,

CM-2014 is the only contract for which the evidence permits the Court

to calculate DWSDs losses with sufficient precision to order restitution.

(R.581: Govt Restitution Br., 1713638).

The governments initial post-remand brief, however, proposed

calculating DWSDs losses on that contract as $1,637,087.50, rather

than the slightly lower amount ($1,520,653.50) that the Sixth Circuit

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suggested in its opinion. (Compare R.581: Govt Restitution Br., 17135,

17137, with Kilpatrick, 798 F.3d at 391 n.3). As the attached trial

exhibit, LS3-18, shows, that discrepancy resulted from the government

taking a slightly more aggressive view of DWSDs losses on CM-2014

than the Sixth Circuits opinion suggested. The governments

$1,637,087.50 number was based on the cost difference between two

proposals: (a) the $13,603,089 proposal submitted by Ferguson and

Lakeshore, and (b) the $11,966,011.50 proposal submitted by the

original winner, Superior and DLZ. (See Ex. LS3-18 at 3 (attached);

R.581: Govt Restitution Br., 1713738). The Sixth Circuits suggested

calculation of $1,520,653.50, in contrast, did not rely on Lakeshores

and Fergusons $13,603,089 proposal amount. Instead, it used their

approved contract amount$13,486,655which was slightly lower

than their proposal amount. (See Ex. LS3-18 at 2, 4; R.348: Tr., 7575).

After reviewing the record, the government now agrees that the

Sixth Circuits more conservative calculation is the best approach for

determining DWSDs actual losses on CM-2014. Kilpatrick, 798 F.3d at

39091 & n.3. The Sixth Circuits suggested calculation relies on the

amount that DWSD actually approved and paid to Lakeshore and

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Ferguson on CM-2014, rather than just Lakeshores and Fergusons

proposal. So as the Sixth Circuit suggested, it is a better estimate of

DWSDs losses on that contract.

In reality, DWSDs losses on CM-2014 were likely far more than

$1,520,653.50. DWSD approved so many change orders for Lakeshore

and Ferguson on CM-2014 that the final contract amount ballooned to

over $55 million. (R.348: Tr., 757579). Those change orders were

highly unusual. (Id., 7579). And they occurred while Ferguson and

Kilpatrick were extorting Lakeshore for hundreds of thousands of

dollars in non-existent management services. (R.352: Tr., 817893;

R.357: Tr., 8783800). So it is unlikely that DWSD would have paid the

same amount for those change orders if it had hired another contractor.

But, given the available evidence, the government is unable to ascertain

DWSDs losses there with sufficient precision to support any additional

restitution amounts. The Court should therefore take the Sixth Circuits

more conservative approach and calculate Kilpatricks restitution to

DWSD as $1,520,653.50.

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II. Given the express language of the Sixth Circuits limited remand
and the evidence already in the recorda hearing is unnecessary.

Because the Court can determine the restitution amount based on

the briefs and existing record, a restitution hearing is neither required

nor necessary. The Sixth Circuit did not order such a hearing. It issued

only a limited remand to recalculate Kilpatricks restitution to DWSD.

Kilpatrick, 798 F.3d at 39091. In doing so, the Sixth Circuit stated

only that this Court may request additional evidence, may hold a

hearing, and may conduct any further proceedings necessary to

recalculate the restitution award. Id.

When the Sixth Circuit issues a limited remand, the remands

language controls the scope of what happens next in the district court.

Unlike a general remand, a limited remand create[s] a narrow

framework within which the district court must operate, United States

v. Campbell, 168 F.3d 263, 265 (6th Cir. 1999), and the district courts

resentencing authority is limited to the issue or issues remanded,

United States v. ODell, 320 F.3d 674, 679 (6th Cir. 2003). That narrow

framework often does not require (or, sometimes, even allow) the

district court to undertake all or most of the procedures that it would

have at a de novo sentencing hearing. See United States v. Jeross, 521

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F.3d 562, 58586 (6th Cir. 2008). What matters, simply, is the language

of the Sixth Circuits limited remand. Campbell, 168 F.3d at 265.

Here, the plain language of the Sixth Circuits limited remand did

not require an evidentiary hearing to recalculate Kilpatricks restitution

to DWSD. The Sixth Circuit stated only that this Court may conduct

an evidentiary hearing. Kilpatrick, 798 F.3d 39091. It did not say that

the Court must or shall conduct such a hearing. Those words matter.

They demonstrate that the Sixth Circuit deferred to this Courts

discretion in deciding what procedures would best enable it to

recalculate Kilpatricks restitution to DWSD. And those words did not,

in any way, require a hearing.

Even if this were Kilpatricks original restitution calculationand

not just a recalculation following a limited remanda hearing would

not be required. The restitution statute grants a district court

discretion to choose the procedures that will best aid the court in

assessing the amount of loss. United States v. Vandeberg, 201 F.3d 805,

813 (6th Cir. 2000). The statute states only that a district court may

require additional documentation or hear testimony. 18 U.S.C.

3664(d)(4) (emphasis added). So even though, in many cases, a

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sentencing court will want to conduct a hearing, the restitution statute

does not mandate that such an evidentiary hearing must be

conducted. Vandeberg, 201 F.3d at 813. The Court may, instead, just

permit the parties to brief the amount of losses, based on the existing

evidentiary record. Id. at 814 n.6; see also United States v. Curry, 547 F.

Appx 768, 771 (6th Cir. 2013); United States v. Wallace, 451 F. Appx

523, 528 (6th Cir. 2011); United States v. Maurer, 226 F.3d 150, 15152

(2d Cir. 2000). And nothing, anywhere in the statute or case law,

suggests that a defendant like Kilpatrick must be granted a broader

remedy after a limited remand than he would have been entitled to at

his original sentencing.

Nor is there any type of factual disputeor anything elsethat

requires a restitution hearing here. As the Sixth Circuit explained, the

trial record, as it exists, contains all of the necessary evidence showing

that DWSDs actual losses on CM-2014 were at least $1,520,653.50.

Kilpatrick, 798 F.3d at 391 n.3. Moreover, as explained above, the

government is not relying on any other evidence, any other calculation,

or any other water or sewer contract for the requested restitution

amount here. It is just relying on the existing record.

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Kilpatricks post-remand restitution arguments also do not

necessitate a hearing. In contending that his restitution to DWSD

should be $0, Kilpatrick first argues that DWSD did not legally qualify

as a victim for restitution here. (R.591: Kilpatrick Restitution Br.,

1728487). That is not a factual dispute requiring a hearing. It is a

purely legal argument foreclosed by both the restitution statute and the

Sixth Circuits mandate. See 18 U.S.C. 3663A(a)(2) (defining victim

broadly to include any person directly harmed by the defendants

criminal conduct in the course of the scheme, conspiracy, or pattern);

Kilpatrick, 798 F.3d at 391 (remanding only for proper calculation of

the [restitution] award to DWSDnot for relitigating whether DWSD

qualifies as a victim). Kilpatricks second argument also does not

require a hearing. (R.591: Kilpatrick Restitution Br., 1728794). It just

attempts to relitigate his guilt on the extortion count for CM-2014 and

the RICO conspiracy, under the guise of a restitution argument. (See

id.). The jurys verdict already resolved that argument against him, as

did the Sixth Circuits opinion affirming Kilpatricks convictions on

direct appeal. Kilpatrick is not entitled to a restitution hearing to

recontest his guilt on the crimes of conviction.

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Conclusion
The Court should enter an order and amended judgment requiring

Kilpatrick to pay $1,520,653.50 in restitution to DWSD.

Respectfully submitted,

Daniel L. Lemisch
Acting United States Attorney

/s/ Andrew Goetz

Andrew Goetz
Mark Chutkow
Michael Bullotta
Assistant United States Attorneys
Eastern District of Michigan
211 West Fort Street, Suite 2001
Detroit, MI 48226
Phone: (313) 226-9522
Email: andrew.goetz@usdoj.gov

Dated: August 2, 2017

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Certificate of Service
I hereby certify that on August 2, 2017, I electronically filed this brief

with the Clerk of the Court using the ECF system, which will send

notification of such filing to:

Harold Gurewitz, Attorney for Defendant

/s/ Andrew Goetz

Andrew Goetz
Assistant United States Attorney
Eastern District of Michigan
211 West Fort Street, Suite 2001
Detroit, MI 48226
Phone: (313) 226-9522
Email: andrew.goetz@usdoj.gov

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 2:10-cr-20403-NGE-MKM Doc # 607-1 Filed 08/02/17 Pg 1 of 1 Pg ID 17467

United States District Court

Eastern District of Michigan

United States of America,

Plaintiff,
Hon. Nancy G. Edmunds
v.
Criminal Case No. 10-20403
Kwame M. Kilpatrick,

Defendant.
/

Index of Exhibits

Trial Exhibit LS3-18

2:10-cr-20403-NGE-MKM Doc # 607-2 Filed 08/02/17 Pg 1 of 4 Pg ID 17468
2:10-cr-20403-NGE-MKM Doc # 607-2 Filed 08/02/17 Pg 2 of 4 Pg ID 17469
2:10-cr-20403-NGE-MKM Doc # 607-2 Filed 08/02/17 Pg 3 of 4 Pg ID 17470
2:10-cr-20403-NGE-MKM Doc # 607-2 Filed 08/02/17 Pg 4 of 4 Pg ID 17471