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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 93-2472
_____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
PATRICK CARL HAYES,
Defendant-Appellant.
_________________________________________________________________
Appeal from the United States District Court for the
Southern District of Texas
_________________________________________________________________
(August 31, 1994)
Before REYNALDO G. GARZA, DeMOSS and PARKER1, Circuit Judges.
ROBERT M. PARKER, Circuit Judge:
Appellant Patrick Carl Hayes ("Hayes") appeals that portion of
his sentence requiring him to pay restitution. Having concluded
that the district court erred in ordering restitution in this case,
we will vacate the order of restitution, and remand the case to the
District Court for resentencing.
FACTS
Hayes was charged in a three count indictment with possession
of stolen mail; specifically, possession of three credit cards
1 Judge Parker participated by designation in the oral
argument of this case as a United States District Judge for the
Eastern District of Texas. Since that time he has been appointed
as a Fifth Circuit Judge.
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which had been stolen from the United States mail in violation of
18 U.S.C. § 1708. Hayes pleaded guilty to all three counts, was
sentenced to six months imprisonment and was ordered to make
$3,255.01 in restitution to the credit card companies. The
restitution represents the amounts that were charged to the credit
cards between January and March of 1989. Hayes was charged with
and convicted of possession of the cards "on or about" March 31,
1989, the date that Hayes was arrested with the cards in his
possession. The cards had been mailed by the credit card
companies, but were never received by the credit card customers.
Hayes claimed that he had purchased the cards from an acquaintance
and had not yet used them, although he admitted that he intended to
use them in the future. There was evidence that several of the
charges had been made at the service station where Hayes worked.
DISCUSSION
Restitution is a criminal penalty and a component of the
defendant's sentence. Consequently, this Court reviews the
restitution order de novo. United States v. Chaney, 964 F.2d 437,
451 (5th Cir. 1992).
Hayes' restitution was ordered pursuant to the Victim and
Witness Protection Act, 18 U.S.C. § 3663, (VWPA) which provides in
pertinent part:
The court, when sentencing a defendant convicted of an
offense under this title...may order, in addition to
or...in lieu of any other penalty authorized by law, that
the defendant make restitution to any victim of such
offense.
18 U.S.C. § 3663(a)(1)(1988) (the version in effect at the time of
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Hayes' sentencing). An order of restitution must be based on the
conduct for which the defendant was convicted, because the Supreme
Court held in Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979
(1990) that "Congress intended restitution to be tied to the loss
caused by the offense of conviction." Id. at 1981. See also,
United States v. Chaney, 964 F.2d 437, 451 (5th Cir. 1992)
("Restitution under the Victim and Witness Protection Act (VWPA) is
limited to losses caused by the specific conduct that is the basis
of the offense of conviction.")
Hayes pleaded guilty to an indictment charging him with mere
possession on one day, not with conduct or a scheme that resulted
in losses to any victims. The indictment did not charge him with
being in possession of the cards during the three month period when
the charges were made, and none of the charges occurred on the day
named in his indictment.
The Government concedes that restitution under the VWPA is
limited to losses caused by the specific conduct that is the basis
of the offense of conviction. They then attempt to argue that the
credit card companies' losses stem from Hayes' actions. The theft
of the cards prevented the credit card companies from recovering
the charged amounts from the customers they were issued to, and the
Government contends that Hayes' purchase of the stolen cards
prevented the credit card companies from identifying and collecting
the amounts due from the person who stole the cards.
This position seems similar to the argument that the Government
made successfully in United States v. Rollins, 93-1444 (5th Cir.
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January 3, 1994). In that case, this Court, in an unpublished
opinion, declined to disturb a district court's restitution order
where the defendant was convicted of violating 18 U.S.C. § 2321 by
buying and receiving with intent to sell or otherwise dispose of a
vehicle, knowing that the vehicle identification number had been
altered. The defendant argued that any loss incurred was caused
solely by the initial theft of the vehicle, an offense for which
the defendant was not charged or convicted. This Court, however,
held that the district court was entitled to conclude that Rollins'
actions constituted a continuation of the scheme to steal the
vehicle, because the specific conduct upon which the offense was
based was his buying a van with knowledge that it had been stolen,
altering its VIN, and selling it to an innocent purchaser. The
case before us is distinguishable from Rollins, in that Rollins'
victim's loss resulted directly from the conduct for which he was
convicted. Hayes was convicted only of possession of stolen mail,
which offense does not include any element of use or attempted use
of the credit cards. The credit card companies suffered loss not
from Hayes' possession of the cards, but from the unauthorized
charges made to the cards, which Hayes was not charged with and not
convicted of.
While the Fifth Circuit has not had a previous occasion to
decide this issue, the Eleventh Circuit, when confronted with a
similar question, held that a conviction for possession of 89
unauthorized access devices could not support a restitution award
because "there was no loss caused by [the defendant's] mere
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possession of the access devices. It was only [the defendant's]
use of the devices that resulted in loss to the victims." United
States v. Cobbs, 967 F.2d 1555, 1559 (11th Cir. 1992).
We are persuaded that the Eleventh Circuit is correct. The
credit card companies' losses were not caused by the conduct for
which Hayes was convicted. Therefore, the restitution imposed by
the district court is not authorized under VWPA.
CONCLUSION
Since the order for restitution represents only one component
of the sentencing court's balance of sanctions, the entire sentence
is VACATED and the case is REMANDED for resentencing.

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