Archive | restitution

Tuesday, August 4th, 2020

District court erred in relying on uncharged conduct to select the applicable Guideline provision, and the error is not harmless despite the court’s claim that it would have imposed the same sentence under the correct Guideline.

In United States v. Huberfeld, 2d Cir. No. 19-436 (L), the Court (opinion by Judge Pooler, joined by Judges Lynch and Menashi) vacated both a 30-month sentence and a $19 million order of restitution for basically the same reason – the district court erred in relying on uncharged criminal conduct, beyond and broader than what the defendant actually pleaded guilty to via a negotiated information and plea agreement, in selecting the applicable Guideline provision and awarding restitution. The Court also found that the Guideline-selection error is not harmless, despite the district court’s claim that it would’ve imposed the same 30-month sentence under the correct Guideline, because under the circumstances here, the Court was not “confident” that the incorrect range did not “clearly” affect the court’s selection of the ultimate sentence.

Here’s the factual gist. Huberfeld solicited investments for Platinum Partners, a hedge fund. He spoke to co-conspirator Jona Rechnitz, …

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Categories: bribery, guideline, restitution, Uncategorized

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Wednesday, November 20th, 2019

Who is “indigent”? $5,000 special assessment issue to watch out for

The Second Circuit today issued a Jacobson remand for the district court to explain how it decided that a person represented by the Federal Defenders office was still “non-indigent” under Section 2014(a). (See the summary order in United States v. Rosario). For those who haven’t encountered this issue yet, section 2014(a) is the “Justice for Victims Trafficking Act,” which mandates a $5,000 – rather than $100 – special assessment for any “non-indigent” person convicted of certain sex offenses. “Indigent” isn’t defined. Although there do seem to be some good proxies the court could use – qualification for appointed counsel or a determination that a fine is inappropriate – so far, the Circuit has offered little guidance. Maybe they will when Rosario comes back before the panel.

In the meantime, object to the $5,000 special assessment if you have any argument your client is indigent. It may seem like a …

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Categories: restitution, sex offenses

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Friday, February 16th, 2018

Second Circuit Holds that A Criminally Culpable Corporation Is Not Entitled to Restitution for Its Employees’ Criminal Conduct

The Second Circuit issued two opinions this week on third parties’ claims for restitution and shares of criminally forfeited property from defendants. See Federal Insurance Co. v. United States & United States v. Mazer (related cases), Nos. 16-2967 & 16-3402 (2d Cir. 2017) (Parker, Lynch, Carney) (appeal from Daniels, J., SDNY), opinion available here; United States v. Ohle, No. 16-601 (2d Cir. 2017) (Leval, Calabresi, Cabranes) (appeal from Rakoff, J., SDNY), opinion available here.

The lengthier of these opinions, in Federal Insurance, brings welcome news (or at least a sigh of relief) to the sort of low-level employees to whom corporate defendants are incentivized to shift blame in white collar prosecutions. Federal Insurance concerns a corporation’s entitlement to restitution and forfeiture payments from employees who were convicted for participating in a fraud for which the corporation is criminally culpable. In part, the opinion affirms …

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Categories: CVRA, forfeiture, fraud, MVRA, restitution, victims

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Wednesday, January 10th, 2018

Burdens of Proof & Restitution Under The MVRA

Yesterday the Second Circuit issued a short opinion concerning the burdens of proof for modifying restitution orders under the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. §§ 3663A & 3664. Specifically, the panel held that the district court acted within its discretion in requiring the defendant to prove that a victim recovered money in civil litigation “for the same loss” caused by the defendant. Id. § 3664(j)(2) (requiring that a restitution order be reduced by the amount of such recoveries). The opinion in United States v. Smathers, No. 16-2394 (Kearse, Cabranes, Wesley) (per curiam) (appeal from Hellerstein, J., SDNY), is available here.

Mr. Smathers, a former AOL employee, was ordered to pay $84,000 in restitution to AOL in connection with his conviction for selling the company’s customer list to be used for spam. Through his attorney, Mr. Smathers requested that the district court determine whether this restitution order …

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Categories: burden of proof, MVRA, restitution

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Tuesday, January 17th, 2017

Circuit affirms restitution order based on co-conspirator interview

In United States v. Pinto, the Second Circuit affirmed an order of restitution that was based, in part, on a government memorandum recounting an interview with a co-conspirator.  The District Court had refused to order the government to produce the QuickBooks records that were a partial basis for its restitution calculations.

The District Court has the discretion to decide the procedure it will employ in determining a restitution award “so long as the defendant is given an adequate opportunity to present his position.”  Order at 3. The court “is only required to ascertain by a preponderance of the evidence ‘a reasonable approximation of losses by a sound methodology.'” Id. (citing  United States v. Gushlak, 728 F. 3d 184, 196, and Paroline v. United States, 134 S. Ct. 1710, 1727-28 (2014)).…

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Tuesday, October 25th, 2016

Restitution Isn’t A Windfall


In today’s United States v. Stevens, the Second Circuit (Winter, Chin, Droney) remanded a case for further proceedings because it was unclear whether the district court made the findings needed to support its restitution order.

Stevens fraudulently obtained a loan, ultimately acquired by Capital One Bank, for his business partnership.  The partnership later repaid Capital One in full and Stevens pleaded guilty to fraud in federal court.  The judge, in addition to ordering Stevens’s imprisonment, ordered him to pay restitution to the partnership.  The Second Circuit remanded, however, because “the district court did not make sufficient factual findings, which are necessary to our review of the restitution award.”

“Because restitution is intended to make the victim whole, it must be based only on the actual loss caused by the scheme.  Restitution is not intended to provide a victim with a windfall.”  And where a victim is reimbursed by a …

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Saturday, November 17th, 2012

Radio Smack

United States v. Lacey, No. 11-2404-cr (2d Cir. November 7, 2012) (Winter, Straub, Lynch, CJJ)

Defendants Lacey and Henry were convicted after a jury trial of various offenses resulting from their involvement in a mortgage fraud scheme. In the scheme a real estate company, MTC,  would purchase “short-sale” properties from distressed homeowners, then resell them to straw buyers, who would obtain mortgages on the properties, without intending to live in them or make payments. MTC helped the straw buyers complete fraudulent mortgage applications to ensure that they would be approved, and sometimes made a few payments on the loans to further deceive the banks, but eventually the loans defaulted and the lending banks took title to the properties through foreclosure.

One component of the fraud involved radio ads, through which MTC recruited straw buyers. Those ads told buyers that they could earn a fee by buying a house through …

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Categories: mass-marketing, mortgage fraud, restitution, Uncategorized, victim enhancement

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Saturday, October 20th, 2012

You Don’t Stay

United States v. Colasuonno, No. 11-1188-cr (2d Cir. October 12, 2012)(Kearse, Walker, Raggi, CJJ)

Answering a question of first impression, here the circuit holds that the automatic stay provisions of the bankruptcy code does not apply to either a restitution order or a probation violation proceeding based on a failure to comply with a restitution order.

The facts are fairly straightforward. A jury convicted Colasuonno of bank fraud offenses; he then pled guilty to an unrelated tax fraud. At a consolidated proceeding the district court imposed a noncustodial sentence, which included about $781,000 in restitution to the IRS on the tax case.  Colasuonno seemed to show little enthusiasm for making restitution payments. After two years, even with district court intervention, he had paid only about $6,600, even though his monthly income during that period was more than $7,000.

In July of 2009, Colasuonno and his wife filed a Chapter …

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Categories: probation violation, restitution, Uncategorized

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Sunday, April 22nd, 2012

Gain? Wait!

United States v. Zangari, No. 10-4546-cr (2d Cir. April 18, 2012) (Cabranes, Pooler, Wesley, CJJ)
In this decision, the court found that the district court’s restitution order, which was based on the defendant’s gain instead of the victims’ loss, was error, but not plain error. It accordingly affirmed.
Defendant Zangari was a securities broker in the securities-lending departments of two major banks.  He engaged in unauthorized stock-loan transactions with financial institutions that had a relationship with one of his co-workers, and received a portion of the kickbacks, approximately $65,000.  His employers  suffered “losses in the form of unrealized profit.”
Zangari pled guilty to a Travel Act conspiracy, and was sentenced under USSG § 2B4.1, the commercial bribery guideline. The PSR used the $65,000 figure as the loss calculation, recommending an enhancement for a loss between $30,000 and $70,000. Although neither bank had submitted a loss affidavit, the PSR

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Saturday, January 14th, 2012

Many Unhappy Returns

United States v. Cadet, No. 10-4220-cr (2d Cir. December 20, 2011) (Miner, Cabranes, Wesley, CJJ)

An Eastern District jury convicted Joseph Cadet of 16 tax offenses based on his preparation of dozens of false tax returns for his “clients” between 2003 and 2006. Although the court affirmed his conviction – he challenged only the admission of Rule 404(b) evidence, a perennial loser in this circuit – it vacated and remanded the sentence due to a host of sentencing errors.

First, the district court imposed a 41-month prison sentence and a three-year term of supervised release on each of the 16 counts of conviction. But the statutory maximum term of imprisonment for each violation of 26 U.S.C. § 7206(2) was three years’ imprisonment to be followed by one year of supervised release.

The court also made several incorrect restitution rulings. First, the restitution order included losses sustained by New York City …

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Saturday, October 8th, 2011

Aliens vs. Predator

United States v. Archer, No. 10-4684-cr (2d Cir. September 20, 2011) (Newman, Calabresi, Hall, CJJ)

Thomas Archer, a solo-practitioner immigration lawyer in Queens, ran a visa fraud mill. His specialty was the I-687, an amnesty program that permitted certain aliens who were here illegally in the 1980’s to adjust their status and receive a visa. In 2004 and 2005, Archer filed nearly 240 I-687 applications; the DHS denied them all.

Convicted of visa fraud and conspiracy to commit visa fraud, his appeal concerned both trial issues – centered around his claim that he did know know that his assistants were filing forms with false information – and sentencing issues. The circuit affirmed Archer’s conviction, but remanded for resentencing and recalculation of the restitution.

The Trial Issues

At trial, an immigration agent who had reviewed 175 I-687 applications that Archer’s office filed, testified that almost all of them had certain suspicious …

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Categories: document enhancement, knowledge, obstruction of justice, restitution, Uncategorized, victims

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