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United States v. Yalincak

United States Court of Appeals, Second Circuit

April 10, 2017

United States of America, Appellee,
v.
Ayfer Yalincak, Defendant, Hakan Yalincak, Defendant-Appellant.

          Argued: December 7, 2016

          Defendant-appellant Hakan Yalincak appeals from two rulings of the United States District Court for the District of Connecticut (Janet Bond Arterton, Judge) vacating the district court's prior order dated December 26, 2007, which had granted Yalincak more than $1.1 million in credits towards his restitution obligations pursuant to the Mandatory Victims Restitution Act ("MVRA"). See 18 U.S.C. § 3664(j)(2). Recognizing nearly eight years after the fact that its December 2007 order had been prematurely entered, the district court vacated the order sua sponte in May 2015, drawing on its "inherent power to correct mistakes made in its handling of a case" and "power to grant relief from erroneous interlocutory orders, " United States v. LoRusso, 695 F.2d 45, 53 (2d Cir. 1982) (internal quotation marks omitted). Because we conclude that the December 2007 order was a final order that the district court lacked the authority to later vacate, we VACATE in part the district court's May 11, 2015 and September 28, 2015 rulings and REMAND for further proceedings consistent with this opinion.

          Jeffrey C. Kestenband, The Kestenband Law Firm, LLC, Glastonbury, CT, for Defendant-Appellant Hakan Yalincak.

          Christine L. Sciarrino, Assistant United States Attorney (Lauren M. Nash and Marc H. Silverman, Assistant United States Attorneys, on the brief), for Deirdre M. Daly, United States Attorney for the District of Connecticut, New Haven, CT.

          Before Calabresi, Raggi, and Lynch, Circuit Judges.

          Gerard E. Lynch, Circuit Judge:

         Defendant-appellant Hakan Yalincak appeals from two rulings of the United States District Court for the District of Connecticut (Janet Bond Arterton, Judge) vacating the district court's prior order dated December 26, 2007, which had granted Yalincak more than $1.1 million in credits towards his restitution obligations pursuant to the Mandatory Victims Restitution Act ("MVRA"). See 18 U.S.C. § 3664(j)(2). Recognizing nearly eight years after the fact that its December 2007 order had been prematurely entered, the district court vacated the order sua sponte, drawing on its "inherent power to correct mistakes made in its handling of a case" and "power to grant relief from erroneous interlocutory orders, " United States v. LoRusso, 695 F.2d 45, 53 (2d Cir. 1982) (internal quotation marks omitted).

         On appeal, Yalincak principally argues that the December 2007 order was a final order that the district court lacked the authority to later vacate, and that he is therefore entitled to the credits that he was granted in the December 2007 order. Resolving whether the December 2007 order was final requires us to consider, in turn, the question of when an order granting a motion for credit under 18 U.S.C. § 3664(j)(2) is final and thus appealable. We conclude that appeal of a § 3664(j)(2) order need not wait until a defendant's restitution obligations are fully satisfied and may be brought where the order conclusively determines a defendant's entitlement to credit under § 3664(j)(2) for particular funds. Because the December 2007 order conclusively determined Yalincak's entitlement to particular funds recovered in two bankruptcy proceedings and was thus a final order, the district court lacked the authority to later vacate that order. Accordingly, we VACATE in part the district court's May 11, 2015 and September 28, 2015 rulings and REMAND for further proceedings consistent with this opinion.

         BACKGROUND

         In June 2006, Yalincak pled guilty to bank and wire fraud charges stemming from a scheme to defraud investors in a sham hedge fund that Yalincak purported to manage. On April 11, 2007, the district court sentenced Yalincak to concurrent terms of 42 months' imprisonment followed by concurrent terms of supervised release and ordered him to pay $4, 182, 000 in restitution to his victims.

         On April 24, 2007, Yalincak moved the district court "to order that any and all funds" recovered in the ongoing bankruptcy proceedings of Daedalus Capital Relative Value Fund I, LLC (the "Daedalus Bankruptcy") "be credited to the restitution order, " and, "[i]n particular, . . . the amount of $1, 050, 907.38 recovered in the said proceedings." A. 25. In response, the government filed a written submission stating that it did "not object to the defendant's motion, " but that Yalincak "should take whatever action is necessary to make certain that the [government] . . . is notified timely of any distribution from the $1, 050, 907.38 as well as any future distributions to victims of the defendants' fraudulent scheme by the bankruptcy trustee." A. 34-35.

         On November 2, 2007, Yalincak filed a second motion seeking credit for $90, 000 collected in the bankruptcy proceedings of HMMH Holdings, LLC (the "HMMH Bankruptcy"). Yalincak also reiterated his request to be credited any and all funds, including the $1, 050, 907.38, recovered in the Daedalus Bankruptcy. In that motion, Yalincak noted that he "desire[d] clarification of his and his co-defendants' restitution status" given that the "Bankruptcy Trustee has commenced approximately fourteen (14) adversary proceedings, " which Yalincak "anticipate[d] . . . w[ould] constitute the principal avenue for restitution" to his victims. A. 37.

         On December 26, 2007, the district court granted both of Yalincak's motions "absent objection" in a text-only order on the case docket. A. 14. The order stated in full:

ORDER granting 147 Motion as to Hakan Yalincak (1); granting 159 Motion as to Hakan Yalincak (1), absent objection. Signed by Judge Janet Bond Arterton on 12/26/2007. (Tooker, A.) (Entered: 12/26/2007)

Id. The district court did not provide any other explanation for the ruling.

         Yalincak filed additional motions for credit in January 2011 and July 2013. On May 11, 2015, in the course of ruling on those motions, the district court vacated its December 2007 order sua sponte. In doing so, the district court explained that it had previously granted Yalincak's first two motions for credit "absent objection . . . without a determination on the merits" and that "the Clerk's records indicate that Mr. Yalincak has not been credited with these sums." A. 258. Having now conducted a "careful review of the motions, " the district court concluded that its previous grant of the motions was "premature" and vacated the December 2007 order, citing its authority under Federal Rule of Civil Procedure 60(a) to correct a clerical mistake or a mistake arising from oversight or omission. Id. The district court then denied Yalincak credit for the $1, 050, 907.38 collected in the Daedalus Bankruptcy and the $90, 000 collected in the HMMH Bankruptcy on the basis that Yalincak had failed to make the required showings under the MVRA, which states, in relevant ...


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