Restitution

The Eleventh Circuit affirmed convictions arising from a check-cashing and mail-theft scheme, rejected a Dubin challenge to the defendant’s conviction for aggravated identity theft, vacated the “sophisticated means” enhancement for lack of defendant-specific conduct, and vacated restitution tied to the defendant’s pre-participation conduct.

The Second Circuit affirmed a jury verdict finding a medical billing company owner guilty of health care fraud, conspiracy, wire fraud, and aggravated identity theft, but vacated his 144-month sentence, $63.38 million forfeiture judgment, and $336.99 million restitution award. The Court held the district court procedurally erred by lengthening the prison term based on the prospect of First Step Act earned-time credits and RDAP benefits, misapplied two Guidelines enhancements without adequate findings, and used flawed methodologies for forfeiture and restitution.

The Eighth Circuit reversed a district court’s order of restitution in a smuggling and postage counterfeiting case. The Court held that only losses caused by specific conduct that forms the basis of a conviction can be included in a restitution order, and since the defendant’s conviction was based only on his forgery of stamps and not a broader conspiracy, scheme, or pattern, the restitution should have been limited to losses caused by the forgery.

The Second Circuit vacated a $2.3 million restitution order against a defendant convicted of securities fraud. The Court held that most of the alleged victims’ losses came from purchasing shares of a sham company outside of a public market, in a private placement. Since the private placement was arranged by the defendant’s co-conspirators and there was no evidence that the defendant was involved in planning or executing the private placement, the defendant could not be held accountable for those losses as the proximate or direct cause.

The Eleventh Circuit affirmed the conviction, sentence, and restitution order of a defendant convicted of sex trafficking minors and adults. Among the defendant’s challenges, the Court held that admitting graphic videos of a victim does not violate Rule 403 if the videos are relevant and jurors are prescreened appropriately, evidence of a defendant’s use of violence against victims establishes their knowledge that the victims were not consenting to the sexual activities, and a victim’s disclaimer of a restitution award does not negate a district court’s obligation to order restitution.

The Sixth Circuit vacated a defendant’s sentence for healthcare fraud based on the district court’s abuse of discretion in attributing losses to the defendant stemming from his wife”s use of forged prescriptions and referral payments since there was no evidence that he agreed to undertake those acts. The Court held that while jointly undertaken criminal activity can be used to determine conspiracy criminal liability, the acts of a co-conspirator cannot be used in the scope of conduct analysis to calculate a defendant’s offense level under the sentencing guidelines if the defendant did not agree to undertake the specific activity, though those acts could be held against the defendant in calculating restitution.

The Second Circuit held that the district court erred in ordering the defendant to pay restitution immediately upon his sentencing, as there is no mandatory restitution for Title 26 tax offenses, but the district court does have the authority to order restitution as a condition of supervised release.

Where the defendants stole and later destroyed a rare gold bar recovered from a sunken treasure ship, the Court held that in cases involving a unique item or an item that has no market for it, the proper figure to calculate restitution is the “replacement cost” of the item rather than its mere fair market value, which in this case would have been the bar’s weight in gold. However, the district court erred in adopting the victim-museum’s arbitrarily defined value of the gold bar for restitution purposes.

The Court affirmed a restitution order under § 2259 as to 8 of 9 child pornography victims, holding that the district court was not required to disaggregate the victims’ losses among the abusers, producers, distributors, and possessors of the images before determining an individual defendant’s restitution obligation. The Court held that the court sufficiently considered proximate causation and the defendant’s relative role as a possessor. The Court also held that one victim had not provided any evidence regarding her losses or the defendant’s causal relationship to those losses.