Opinion
No. 85 WDA 2021 No. 86 WDA 2021 No. 87 WDA 2021 No. 621 WDA 2021 No. 622 WDA 2021 No. 623 WDA 2021
04-06-2022
COMMONWEALTH of Pennsylvania v. Joseph Michael KOCOTT, Sr., Appellant Commonwealth of Pennsylvania v. Joseph Michael Kocott, Sr., Appellant Commonwealth of Pennsylvania v. Joseph Michael Kocott, Sr., Appellant Commonwealth of Pennsylvania v. Joseph Michael Kocott, Sr., Appellant Commonwealth of Pennsylvania v. Joseph Michael Kocott, Sr., Appellant Commonwealth of Pennsylvania v. Joseph Michael Kocott, Sr., Appellant
MEMORANDUM BY PELLEGRINI, J.:
In these consolidated cases, Joseph Michael Kocott, Sr. (Kocott) appeals from the judgement of sentence entered in the Court of Common Pleas of Allegheny County (trial court) following his entries of nolo contendere pleas to three counts of theft by deception, two counts of receiving stolen property and one count of criminal conspiracy. Kocott claims that the restitution portion of his sentence is illegal because the monthly restitution payment of $3,600 exceeds 25% of his gross salary in violation of 42 Pa.C.S. § 9730(a.1). We affirm.
We have consolidated Kocott's appeals at J-S07034-22 and J-S07035-22 because the issues raised are identical.
This sentencing provision governs the attachment of wages for fulfillment of a restitution obligation and sets a cap of 25% of the defendant's earnings for garnishment. See 42 Pa.C.S. § 9730(a.1).
I.
A.
We summarize the relevant facts and procedural history of this case as follows. In March 2016, Kocott entered negotiated pleas of nolo contendere to multiple charges stemming from his large-scale theft from three separate entities, Catelcom, LLC, Gray Con, LLC and MP Instruments Company. The trial court sentenced Kocott to the negotiated aggregate term of incarceration of 1 to 2 years followed by 3 years of probation and ordered him to pay restitution in the total amount of $907,125 as a condition of probation. In August 2020, after Kocott was uncooperative in timely providing financial documents relevant to his ability to make restitution payments, the trial court revoked his probation and sentenced him to a new aggregate term of three years of probation. In doing so, the trial court found that Kocott willfully withheld information demonstrating his true financial status and that he had under-reported his earnings and financial resources.
Kocott has filed a related appeal challenging his August 31, 2020 judgment of sentence. We have issued a related Memorandum in that case, J-S07033-22, which can be referred to for a full rendition of the facts.
B.
The review process of Kocott's finances continued and the restitution order was increased from $100 per case to $400, then increased to $1,200 per case. Instead of complying with at least the $400 requirement, Kocott unilaterally decreased his monthly payments to $262 per case without explanation. ( See N.T. Hearing, 5/10/21, at 24).
At a November 30, 2020 restitution review hearing, the trial court indicated that the voluminous financial documentation it had reviewed included $98,265 in bank deposits for the year 2000, independent of the income of Kocott's wife. ( See N.T. Hearing, 11/30/20, at 9, 25). Kocott asserted that these funds were received in connection with a large apartment complex painting project and were primarily used to pay his employees who performed the work. The documents also showed $25,000 in Cash App payments in an account that Kocott explained his clients use to pay him, as well as stock ownership/transfers and gambling expenditures. When the court asked Kocott what he did with the money taken from the victims in this case, he explained it "was sent to China for a deposit for boxes that were being manufactured, and the rest was used in the course of day-to-day business [ ] that we were doing at the time." ( Id. at 21). Although Kocott indicated that he could not paint during the COVID pandemic, he acknowledged that he received pandemic relief checks and a Small Business Administration loan.
The trial court appointed a forensic accountant to analyze Kocott's income, stock ownership and the sources of his money and whether it came from his wife. The court found that based on the information it had reviewed, that an increase to an aggregate monthly amount of $3,600 was appropriate and ordered him to pay that amount.
C.
After Kocott failed to make these payments, the trial court held a probation revocation hearing on May 10, 2021. At that time, Kocott had paid approximately $5,000 in restitution to each victim, and the last monthly payment he made was in the amount of $262 per case. Defense counsel indicated that Kocott did not have the ability to pay the $3,600 per month in restitution, and that the money that was taken in this case "was lost at the casino and on day trading and on E-trade. ... The lump sum money that was there is no longer there available to Mr. Kocott [and] any type of incarceration in this case would be punitive and not coercive because there is no money to coerce out of Mr. Kocott." (N.T. Hearing, 5/10/21, at 13). He also argued that a $262 per month payment was appropriate under the applicable statutory provision as it is 25% of the amount he receives from unemployment. ( See id. at 25). Counsel for the Commonwealth noted that this was contrary to Kocott's previous claim that the money went to China as part of a business transaction. At the conclusion of the hearing, the court revoked Kocott's probation and sentenced him to an aggregate term of 6 to 12 months of incarceration, followed by two years of probation. In doing so it explained:
See 42 Pa.C.S. § 9771(b) (authorizing court to revoke an order of probation upon proof of violation of specified conditions of probation, and providing that upon revocation, sentencing alternatives available shall be the same as were available at time of initial sentencing, with appropriate consideration given to time spent serving order of probation).
I find you're in violation of the probation that I imposed on August 31st of 2020, by reason of you not complying with the order to pay restitution. I made a previous finding that you're able to make restitution in that amount, your income far exceeds the amount that you claim, your earning capacity far exceeds the amount that you claim and additionally your [sic] just not seeking to gain meaningful employment.
( Id. at 30-31).
Kocott timely appealed the judgment of sentence and he and the trial court complied with Rule 1925. See Pa.R.A.P. 1925(a)-(b).
II.
A.
On appeal, Kocott contends that under 42 Pa.C.S. § 9730(a.1), he cannot be ordered to pay more than 25% of his income as restitution, and the trial court erred by setting his monthly restitution payments at $3,600 because this amount is in excess of Kocott's 2019 net income of $42,000. Kocott further maintains that the court erred in revoking his probation for his failure to comply with this illegal requirement. ( See Kocott's Brief, at 4).
Because Kocott's claim implicates the legality of his sentence, our standard of review is de novo and our scope of review is plenary. See Commonwealth v. Brown , 159 A.3d 531, 532 (Pa. Super. 2017).
As to Kocott's position that misunderstands that Section 9730(a.1) limits the amount of restitution that can be ordered, it provides:
Wage attachment .—A court may, at sentencing, assign an amount not greater than 25% of the defendant's gross salary, wages or other earnings to be used for the payment of court costs, restitution or fines.
42 Pa.C.S. § 9730(a.1). As can be seen and contrary to Kocott's claim, the plain language of this provision only sets a cap on the amount of earnings that can be attached for payment of restitution. The language does not address the monthly amount that can be ordered as part of an installment plan.
In this case, the trial court did not order the attachment of any of Kocott's earnings or that any amount would be subjected to garnishment, as the trial court pointed out it "did not enter a wage attachment in this case, as the defendant has been self-employed." (Trial Court Opinion, 5/25/21, at 9). It just ordered Kocott to pay $3,600 per month. Accordingly, the wage attachment provision at Section 9730 is inapplicable to this case and Kocott's claims based on it are meritless.
We note that Criminal Rule of Procedure 705.1, which governs the procedure for imposition of restitution, likewise does not contain any percentage of earnings ceiling on the amount of allowable restitution. See Pa.R.Crim.P. 705.1. This Rule provides:
(A) At the time of sentencing, the judge shall determine what restitution, if any, shall be imposed.
(B) In any case in which restitution is imposed, the judge shall state in the sentencing order:
(1) the amount of restitution ordered;
(2) the details of a payment plan, if any, including when payment is to begin;
(3) the identity of the payee(s);
(4) to which officer or agency the restitution payment shall be made;
(5) whether any restitution has been paid and in what amount; and
(6) whether the restitution has been imposed as a part of the sentence and/or as a condition of probation.
Pa.R.Crim.P. 705.1(A)-(B)(1)-(6).
B.
Now as to whether the amount imposed was permissible, we begin by noting that the plain language of Section 1106(a) mandates that a trial court impose restitution on a defendant upon conviction of a crime when the victim's property has been stolen, regardless of Kocott's financial resources and it removes any discretion from the court to decline to order it. See Commonwealth v. Weir , 239 A.3d 25, 38 (Pa. 2020). Section 1106(c)(1) makes clear that "full restitution" means that the amount is to be determined based on the victim's loss without regard to the defendant's financial resources . See id. In this context, "mandatory restitution" under Section 1106(c) means that restitution must be imposed regardless of the defendant's ability to pay. See id.
Section 1106 of the Crimes Code provides in relevant part:
(a) General rule.– Upon conviction for any crime wherein:
(1) property of a victim has been stolen, converted or otherwise unlawfully obtained, or its value substantially decreased as a direct result of the crime; or
(2) the victim, if an individual, suffered personal injury directly resulting from the crime,
the offender shall be sentenced to make restitution in addition to the punishment prescribed therefor.
(b) Condition of probation or parole.– Whenever restitution has been ordered pursuant to subsection (a) and the offender has been placed on probation or parole, the offender's compliance with such order may be made a condition of such probation or parole.
(c) Mandatory restitution.–
(1) The court shall order full restitution :
(i) Regardless of the current financial resources of the defendant, so as to provide the victim with the fullest compensation for the loss ....
18 Pa.C.S. § 1106(a) -(c) (emphasis added).
While the court must order full restitution regardless of the financial resources of the defendant, the defendant's ability to pay is taken into consideration when a payment schedule is set. See 42 Pa.C.S.§ 9730(b)(3) (providing that where defendant is without financial means to pay restitution immediately, installment payments may be set and defendant's financial resources must be considered in determining appropriate amount).
In determining his ability to pay restitution, the trial court reviewed voluminous documents, appointed a forensic accountant and conducted multiple hearings before it determined that Kocott was capable of complying with the larger payment and that his non-compliance was willful, and found that his claims regarding his finances were based on misinformation that he had submitted. In increasing that amount of restitution to $3,600 per month, while his net income was $42,000, the trial court noted that Kocott's 2019 federal income tax return indicated a gross income of $125,034 through his employment as a painter. In its Amended 1925(b) opinion, the trial court found the majority of the deductions that Kocott claimed as business expenses could not be corroborated or they were not legitimate items that could be deducted from gross income, and that he was uncooperative in providing his financial information.
In explaining how it arrived at that conclusion concerning Kocott's ability to pay, it noted the inconsistencies in his financials, stating:
For example, the defendant deducted the expense of purchasing paint, when a review of the receipts indicated that the customer, not defendant, was billed for the cost of paint. Additionally, it appears the telephone expenses were actually purchases of cell phones for personal use for defendant's family. There were also purchases made that appear to be gifts, with gift vouchers, that were reflected on the receipts provided. One of the receipts claimed as a business expense for food was, in fact, a receipt for a family membership to the Pittsburgh Zoo and Aquarium for $125.00. The defendant claimed an expense for work clothes and boots, in the amount of $750, that appears to have been purchased at various stores on Mrs. Kocott's debit card, not the defendant's business account. The court also ordered monthly statements of credits card accounts owned or used by the defendant on 11/30/2020, which have not been provided by defendant. Yet, numerous receipts for purchases on credit cards for miscellaneous items were provided as business expenses. The defendant claimed $5,000 in gambling winnings on his 2019 tax return. However, the 2019 IRS Wage and Income Transcript, which was provided by the defendant, reflected $9,200.00 in gambling winnings. The Court also reviewed the defendant's documentation, which included bank statements for several banks, and found more than $59,000.00 in cash deposits, not attributable to either the defendant or his spouse's income. Several "Cash Apps" were reflected in the documentation provided by defendant, which indicated numerous cash transfers between the "apps" and bank accounts.
The defendant also provided documentation of his finances for 2020. From November 2019 through July 2020, defendant made cash withdrawals totaling $4,785 for gambling. The defendant also made withdrawals of $5,064.00 for stock purchase, as a day trader. The defendant initially denied owning either Apple or Tesla Stock, but later admitted he had "day traded" it earlier in the year, and no longer owned it. The defendant received approximately $26,000.00 in unemployment compensation. He also received a $25,000.00 "COVID" stimulus loan from the U.S. Small Business Administration. A copy of the loan application was requested from the Defendant, but was never supplied to this court, just the loan authorization and agreement paperwork. Another $9,500.00 in cash deposits from unidentified sources was also reflected in the defendant's accounts. There were also deposits of $24,889.00 into a "Cash App" and $73,376.96 into several bank accounts, totaling $98,265.96. This amount did not include either Mrs. Kocott's income or any Demand Deposit Accounts (DDA) transfers. The source of these cash deposits is essentially untraceable.
The defendant did not provide documentation that he was not able to work in 2020 due to "COVID", such as a letter from his clients advising him that no painting jobs were available. The defendant never looked for employment. Additionally, the defendant at one time turned down a job opportunity as a painter through a Specialty Court Program, claiming he could make more income on his own. The defendant never provided the Court with a budget which reflected any living expenses, rent, mortgage, food, utilities, credit card debt, which the Court would have considered. The Court has held numerous hearings and reviews.
The defendant claims the increase in restitution is excessive, yet at the same time, has spent nearly $10,000.00 in playing the stock market and gambling during a pandemic.
(Amended 1925(b) Opinion at 6-9). Based on the foregoing, we conclude that the trial court did not err in setting the monthly restitution amount or in revoking Kocott's probation for his failure to pay the amount ordered.
III.
Finally, Kocott claims due process violations concerning the revocation proceeding including a lack of notice regarding the nature of the hearing and the violations alleged against him. He maintains that the May 10, 2020 revocation hearing was "sprung on" him and the defense was misled into believing that it was simply a restitution review hearing, leaving counsel ill prepared to call witnesses or respond to any statements made by probation. (Kocott's Brief, at 28).
First, as the Commonwealth points out, Kocott waived these claims for failing to include them in his Rule 1925(b) statement. See Pa.R.A.P. 1925(b)(4)(vii) ("Issues not included in the Statement and/or not raised in accordance with the provisions of this paragraph (b)(4) are waived."); see also Pa.R.A.P. 302(a) (issues not raised in trial court are waived for appellate review).
Kocott's Concise Statement raises only his claims concerning Section 9730 as it relates to the monthly restitution obligation and revocation.
Moreover, our review of the notes of testimony from the probation violation hearing provides no support for Kocott's assertion. At the outset of the proceeding, the trial court's clerk noted that the scheduled probation violation hearing was about to begin. ( See N.T. Hearing, 5/10/21, at 2). Counsel for the parties identified themselves for the record and defense counsel did not object to the nature of the proceeding or express any surprise or need for clarification. The Commonwealth summarized its position relative to probation and recommended incarceration as the "only way to get [Kocott's] attention and make him comply with Court [imposed restitution]." ( Id. at 10). At that point, the trial court asked defense counsel if he had any questions and counsel stated, "No, Your Honor. I do have some documents I would like to present to the court." ( Id. at 11).
Thus, Kocott's contention that the probation revocation was "sprung on" him and somehow a surprise leaving the defense ill prepared is waived and is also meritless, as it lacks record support. Accordingly for the foregoing reasons, we affirm the trial court's decision to impose an additional term of incarceration and probation.
Judgment of sentence affirmed.