In United States v. Razzouk, No. 18-1395 (2d Cir. Jan. 4, 2021), the Second Circuit, in an opinion by Judge Carney, joined by Judge Walker and District Judge Koeltl, held that in determining whether a conviction is for an “offense against property,” such that restitution is required under the Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C. § 3663A(c)(1)(A)(ii), a court may consider the facts and circumstances of the specific crime committed—not just the generic elements of the offense. The appellant had argued that his bribery conviction, which was based on a statute that does not refer to “property” or necessarily implicate its involvement, should not be subject to mandatory restitution. The Circuit rejected this, finding that an analysis based on the categorical approach was unwarranted and concluding that the facts of his case supported that it was an “offense against property.”
Defendant-appellant Sassine Razzouk pleaded guilty to one count of accepting bribes in connection with an organization receiving federal funds, in violation of 18 U.S.C. § 666(a)(1)(B), and three counts of tax evasion, in violation of 26 U.S.C. § 7201, in connection with a bribery scheme that he and others perpetrated while he was an employee of Con Edison. In addition to paying restitution to the IRS, Razzouk was ordered to pay $6,867,350.51 in restitution to Con Edison because the district court determined that his bribery conduct was “an offense against property” under the MVRA. On appeal, Razzouk argued that because the text of the bribery offense defined in § 666(a)(1)(B) neither mentions nor necessarily implicates “property,” the elements of the offense of bribery in connection to programs receiving federal funds do not make it “an offense against property,” requiring mandatory restitution under the MVRA.
The Circuit noted that the MVRA does not define the phrase “offense against property.” The statute reads, in part, that it applies to any offense that is:
(i) a crime of violence, as defined in section 16;
(ii) an offense against property under this title . . . including any offense committed by fraud or deceit;
18 U.S.C. § 3663A(c)(1)(A)(i), (ii).
While acknowledging that determination of the MVRA’s applicability under section (i), for an offense that is a “crime of violence,” requires application of the categorical approach, the Circuit rejected the applicability of such an approach with regard to section (ii): “When determining whether the MVRA offense-against-property provision applies to a conviction, courts may consider the facts and circumstances of the crime that was committed to determine if it is an ‘offense against property’ within the meaning of the MVRA.”
The Circuit emphasized that the statute’s text refers to the way in which some offenses “against property” are “committed.” Specifically, the statute states that such offenses “includ[e] any offense committed by fraud or deceit.” The Circuit concluded that “[t]he plain text of the statute thus suggests that the way the crime is carried out is relevant to its application.” This is distinct from a reference to a conviction for a “generic” crime, which requires instead a focus on the crime’s elements. Because the “offense against property” provision makes no mention of elements or otherwise signals their relevance, the Circuit held that it is appropriate for a district court to consider the manner in which the offense was committed in determining if it is an “offense against property.”
Such an interpretation, the Circuit noted, is consistent with the broad remedial purposes of the MVRA, as well as with the interpretations of other circuits that have addressed the issue.
In this case, appellant Razzouk, who was a manager in the electrical design engineering department at Con Edison, had manipulated the company’s contract bidding system and payment process to benefit the company of one of his friends. Con Edison had calculated that the scheme cost the company approximately six million dollars in the form of overpayments to the company of Razzouk’s friend. The Circuit pointed out that it had already held in an analogous context that a deprivation of this type of property interest—a pecuniary interest—here, in the form of payments for which Con Edison received no consideration, constitutes an “offense against property” under the MVRA. Thus, the Circuit upheld the mandatory order of restitution.
However, the Circuit ordered a partial vacatur of the restitution order and a remand, in light of the Supreme Court’s decision in Lagos v. United States, 138 S. Ct. 1684 (2018), in order to permit the district court to reconsider its inclusion of investigative costs incurred by Con Edison in the restitution order. Lagos clarified the meaning of “investigations” and “proceedings” in this provision as pertaining only to government investigations and criminal proceedings. As the Supreme Court had left open the question of whether investigations initiated at the government’s request qualify, the Circuit remanded so that the district court could consider whether the government had invited the investigation and whether the MVRA should apply to such an investigation.