United States District Court, D. Nebraska
R. Zwart, United States Magistrate Judge
before the court is Defendant Scharton's Objection to the
garnishment of her checking account at Union Bank and Trust.
(Filing No. 193). For the reasons stated below, the objection
will be overruled.
Scharton was indicted for defrauding, and providing false
statements to, the Social Security Administration. She was
found guilty by a jury on August 25, 2011. (Filing No. 113).
A sentencing hearing was held on February 14, 2012, with
judgment entered on February 16, 2012. (Filing No. 140).
Pursuant to that judgment, Defendant Scharton was ordered to
"pay restitution in the amount of $115, 010.40, jointly
and severally with [her co-defendant, ] David Seevers
..." for losses incurred by the Social Security
Administration. (Filing No. 140, at CM/ECF p. 3). The
sentencing order states the "United States of America
may institute civil collection proceedings at any time to
satisfy all or any portion of the criminal monetary
penalty," and without limiting that authority, included
a payment schedule stating that upon "release from
prison," the defendant shall make "monthly
installments of $100 or 3% of the defendant's gross
income, whichever is greater; . . . until the criminal
monetary penalty is paid in full. . . ." (Filing No.
140, at CM/ECF pp. 3, 6).
judgment was appealed, and it was affirmed by the Eighth
Circuit Court of Appeals on December 4, 2012, (Filing No.
160), with the Eighth Circuit's mandate entered on
December 27, 2013. (Filing No. 162).
October 29, 2018, the government served a writ of garnishment
on Union Bank and Trust to recover $46, 472.88, the remaining
restitution owed by Scharton and her co-defendant as of that
date. (Filing No. 176).
Bank answered the writ on November 5, 2018, identifying a
checking account with a balance of $4642.47. (Filing No. 181).
Scharton objected to the writ of garnishment on December 17,
2018. (Filing No. 193).
admits the government is authorized to collect unpaid
restitution, (see, 18 U.S.C. § 3612), and can initiate
garnishment proceedings to facilitate those collection
efforts. 28 U.S.C. § 3205. (Filing No. 193, at CM/ECF
pp.2-3). Nonetheless, Scharton objects garnishment of her
Union Bank checking account, arguing:
1) Union Bank funds in her checking account were derived from
wage income and garnishing those funds will violate the
federal wage limit exemptions in the Consumer Credit
Protection Act (CCPA), 15 U.S.C.A. §§ 1671
2) Defendant has not defaulted on the payments owed under a
31 U.S.C.A. § 3720D agreement arising from the
parties' course of dealing and Defendant's history of
(Filing No. 193).
government did not serve a writ of garnishment on
Scharton's employer. Instead, it seeks to garnish the
bank account where Scharton's net wages are deposited.
exemptions under the CCPA are "limited to periodic
payments of compensation and do not pertain to every asset
that is traceable in some way to such compensation."
Kokoszka v. Belford, 417 U.S. 642, 651 (1974). The
CCPA garnishment limitations do not extend to wages deposited
in financial institutions. Userv v First Nat. Bank,
586 F.2d 107 (9th Cir 1978); United States v.
Tilford, 2014 WL 11048791 (N.D.Tex. 2014); United
States v. Thomas, No. 08-15048, 2009 WL 4638862, at *2
(E.D. Mich. Dec. 1, 2009); United States v.
Armstrong, No. 3:04-CV-1852-H, 2005 WL 937857, at *4
(N.D. Tex. Apr. 21, 2005), report and recommendation adopted,
No. CIV.A.3:04CV1852-H, 2005 WL 1214669 (N.D. Tex. May 20,
2005); Dunlop v First Nat. Bank, 399 F.Supp 855 (DC