Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-06-50713/USCOURTS-ca9-06-50713-0/pdf.json

Parties Involved:
United States of America
Appellee
Hai Waknine
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, No. 06-50521

v.  D.C. No.

HAI WAKNINE, CR-04-00373-R

Defendant-Appellant. 

UNITED STATES OF AMERICA, 

No. 06-50713 Plaintiff-Appellee,

D.C. No.

v.  CR-04-00373-R-1

HAI WAKNINE,

OPINION Defendant-Appellant. 

Appeals from the United States District Court

for the Central District of California

Manuel L. Real, District Judge, Presiding

Argued and Submitted

March 3, 2008—Pasadena, California

Filed September 10, 2008

Before: J. Clifford Wallace, Ronald M. Gould, and

Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Gould;

Partial Concurrence and Partial Dissent by Judge Ikuta

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COUNSEL

Ronald Richards, Beverly Hills, California, David Kenner,

Encino, California, for the defendant-appellant. 

George S. Cardona, United States Attorney, Thomas P.

O’Brien, Assistant United States Attorney, Chief, Criminal

Division, Patrick W. McLaughlin, Assistant United States

Attorney, Los Angeles, California, for the plaintiff-appellee.

OPINION

GOULD, Circuit Judge: 

Hai Waknine appeals his sentence of 121 months of imprisonment and $646,000 in restitution payments imposed by the

district court after he pleaded guilty to one count of racketeer

influenced and corrupt organizations (“RICO”) conspiracy, in

violation of 18 U.S.C. § 1962(d), for laundering proceeds by

embezzling from the Tel Aviv Trade Bank and brokering

loans through extortion. He argues that (1) the government

violated the plea agreement by not orally recommending at

the sentencing hearing a 108-month prison term pursuant to

the plea agreement, (2) the district court violated Rule 32 of

the Federal Rules of Criminal Procedure by not giving the

government an opportunity to speak at the sentencing hearing,

(3) the district court committed procedural error by not considering the 18 U.S.C. § 3553(a) factors before imposing his

sentence, and (4) the district court erred in its restitution calculation. Waknine also asks us to remand this case to a different district judge. We have jurisdiction under 28 U.S.C.

§ 1291. We conclude that there was plain error in the sentencing, and we therefore vacate the sentence, and remand with

instructions for the district court properly to calculate the

United States Sentencing Guidelines range, to discuss the 18

U.S.C. § 3553(a) factors in rendering sentence, and to comply

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with Rule 32 of the Federal Rules of Criminal Procedure by

permitting each party to be heard before announcing the sentence. We also vacate the district court’s restitution order, and

remand for recalculation and explanation of restitution payments. Finally, we reject Waknine’s request for a new sentencing judge. 

I

On December 7, 2004, Waknine was indicted on 46 counts,

charging him, among other things, with participation in a

RICO conspiracy in violation of 18 U.S.C. § 1962(d). Waknine at first pleaded not guilty and his case went to trial. On

June 13, 2006, after five days of trial, Waknine entered a

guilty plea to one count of RICO conspiracy, pursuant to a

plea agreement. The plea agreement included a sentencing

agreement that explicitly said, “At the time of sentencing, the

government agrees to recommend that defendant be sentenced

to a 108-month term of imprisonment.” 

The Presentence Investigation Report (“PSR”) calculated a

total offense level of 31 and Waknine’s criminal history category at II. The PSR therefore recommended a United States

Sentencing Guidelines (“Guidelines”) range of 121 to 151

months of imprisonment. The PSR also stated that Waknine

and the government agreed that he should receive a sentence

of 108 months of imprisonment. 

On September 7, 2006, Waknine filed his specific objections to the PSR. Among his objections, Waknine argued that

the district court should lower his criminal history category

from II to I. Waknine argued that several of his predicate convictions were not properly considered for purposes of his

criminal history score because they were committed outside

the applicable time period and because there was no evidence

that he waived his right to counsel. See U.S.S.G. § 4A1.2(e).

Also on September 7, 2006, four days before the sentencing

hearing, the government filed its sentencing memorandum

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and explicitly recommended that the district court impose a

108-month term of imprisonment. At the sentencing hearing

on September 11, 2006, the district court invited Waknine’s

counsel to make a statement on the record and permitted

Waknine to allocute. However, without permitting the government any opportunity to speak before imposing sentence,

the district court pronounced Waknine’s sentence of 121

months of imprisonment. Soon thereafter, the government

sought clarification from the district court, reminding the district court that it had recommended a 108-month term of

imprisonment in its sentencing memorandum and inquiring as

to how the court arrived at the 121-month sentence. The district court responded, “It would be on a criminal history category I, 121 months, which is the mid of the range.” 

In a subsequent hearing on December 11, 2006, the district

court considered the restitution claims submitted by the government. The government requested that Waknine pay restitution to victims Eliyahu Hadad and Viken Keuylian. In May

2002, Hadad, a real estate investor in Miami, received loans

from Waknine and his co-conspirators. In April 2003, Waknine and his co-conspirators met with Hadad in Florida,

threatened physical injury to Hadad if he failed to repay the

loan, and brought him to Waknine’s lawyer who drafted and

executed a mortgage note obligating Hadad to pay $336,000

if the debt was paid by September 25, 2003, and $500,000 if

the debt was paid after that date. Because of the inconsistencies in Hadad’s testimony and his statements in his victim loss

summary, and the conflicting testimony of cooperating witnesses, the government could not discern the actual amount

loaned to Hadad.1 Therefore, the government requested that

Hadad receive $131,000 in restitution: $100,000 in attorneys’

fees, $25,000 in interest on a mortgage taken out by Hadad to

repay the loan he received from Waknine and his coconspirators, and $6000 in travel costs incurred from partici1The government could only estimate that the total amount loaned to

Hadad fell somewhere between $250,000 and $595,000. 

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pating in Waknine’s investigation and prosecution. At the restitution hearing, the district court ordered Waknine to pay

Hadad $371,000 in restitution. To arrive at this number, the

district court added the $131,000 requested by the government to the difference the district court calculated between the

amount of money the district court determined Hadad repaid

to the co-conspirators, $580,000, and the amount he was

loaned, which the district court determined was $345,000.

The district court provided no explanation for how it arrived

at these figures. 

Keuylian, the owner of a Lamborghini dealership in Beverly Hills, became involved with Waknine and his coconspirators after he told Waknine he was looking for investors to provide funds for the purchase of high-end vehicles.

Keuylian planned to purchase vehicles in Europe, convert

them to United States specifications, and split the profits with

the investors at the time of the sale. On behalf of the coconspirators, Waknine wired $450,000 to Keuylian. In March

2003, Waknine and his co-conspirators visited Keuylian at his

car dealership to demand immediate repayment of the loan.

Waknine later left several threatening voicemail messages on

Keuylian’s cell phone, once threatening to take $2 million

from Keuylian if he failed to repay the loan. Keuylian spent

money providing and repairing vehicles for Waknine and his

co-conspirators, including providing Waknine with a

$175,000 Ferrari 360. Finally, Keuylian transferred $698,000

to Waknine’s attorney’s client trust account to pay off his

debt. The government requested that Waknine pay restitution

to Keuylian in the amount of $275,000: $250,000 in attorneys’ fees and $25,000 in investigator’s fees. At the restitution hearing, the district court ordered Waknine to pay

Keuylian $275,000 in restitution. 

Waknine timely filed a notice of appeal, challenging his

sentence and the district court’s restitution order. 

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II

Waknine challenges his 121-month sentence on three

grounds. Waknine did not raise these objections to his sentence before the district court, and thus we review each claim

for plain error. See United States v. Ameline, 409 F.3d 1073,

1078 (9th Cir. 2005) (en banc). “Plain error is ‘(1) error, (2)

that is plain, and (3) that affects substantial rights.’ ” Id.

(quoting United States v. Cotton, 535 U.S. 625, 631 (2002)).

If these three conditions are met, we may then exercise our

discretion to grant relief if the error “seriously affects the fairness, integrity, or public reputation of judicial proceedings.”

Id. (quoting Cotton, 535 U.S. at 631); see also United States

v. Olano, 507 U.S. 725, 732 (1993). 

A

Waknine contends that the government violated the plea

agreement because it did not recommend at the sentencing

hearing, before the district court imposed the 121-month sentence, that the district court sentence Waknine to 108 months

of imprisonment.2

[1] “In interpreting plea agreements, the government is to

be held to the literal terms of the agreement, and ordinarily

must bear responsibility for any lack of clarity.” United States

v. Baker, 25 F.3d 1452, 1458 (9th Cir. 1994) (internal quotation marks omitted). “To decide whether a plea agreement has

been breached, this court considers what the defendant reasonably understood when he pled guilty.” United States v.

Packwood, 848 F.2d 1009, 1011 (9th Cir. 1988). 

Waknine’s claim centers on the construction and applica2At the sentencing hearing, Waknine did not claim that the government

breached the plea agreement. Thus, Waknine did not preserve this issue

for appeal and we review the claim for plain error. United States v. Cannel, 517 F.3d 1172, 1175-76 (9th Cir. 2008). 

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tion of the following term of the plea agreement: “At the time

of sentencing, the government agrees to recommend that

defendant be sentenced to a 108-month term of imprisonment.” Notably, four days before the sentencing hearing, the

government filed a sentencing memorandum in which it

expressly recommended “that defendant Hai Waknine be sentenced to nine years imprisonment.” If this written recommendation satisfies the contractual obligation, as the government

argues, then there was no breach. Waknine argues, to the contrary, that the plea agreement required that the government

recommend a 108-month sentence at the sentencing hearing,

before the district court imposed a sentence. If we adopt Waknine’s interpretation of the plea agreement, then there was a

breach because at the sentencing hearing the district court

announced Waknine’s sentence without first hearing from the

government. The district court only heard from the government after it imposed Waknine’s sentence, at which time the

government reminded the district court that it “had recommended a nine-year sentence in this case.” 

[2] Waknine argues that the pre-hearing sentencing memorandum and the post-sentencing recommendation at the hearing were insufficient to satisfy the government’s obligation

under the plea agreement to recommend “at the time of sentencing” a 108-month prison term. He asserts that the plea

agreement required the government orally to recommend the

108-month prison term at the sentencing hearing before the

district court sentenced Waknine. The government, on the

other hand, contends that it fulfilled its obligations under the

plea agreement by recommending a nine-year (108-month)

prison term in its sentencing position memorandum, and by

reminding the district court of that recommendation postsentencing. This issue of contract interpretation on the plea

agreement turns on whether the phrase “at the time of sentencing” refers to the sentencing hearing alone, or whether it

also includes the days preceding the hearing, during which

parties file sentencing position memoranda. 

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[3] Ordinarily, we construe an ambiguity in a plea agreement in favor of the defendant. See United States v. Clark,

218 F.3d 1092, 1095 (9th Cir. 2000). Here, however, Waknine did not preserve his claim of alleged plea agreement

breach in the district court. Both Waknine and the government

present plausible constructions of the disputed phrase—“at

the time of sentencing.” We conclude that the phrase in the

plea agreement is ambiguous. It follows that the alleged error

is neither clear nor obvious, and hence does not qualify as

plain error. See Olano, 507 U.S. at 734. We hold that the government’s alleged error does not permit relief under the “plain

error” standard. 

Moreover, there is no prejudice, no showing that substantial

rights were violated, so Waknine’s theory also fails on the

third prong of plain error review. See Ameline, 409 F.3d at

1078 (“He must establish ‘that the probability of a different

result is sufficient to undermine confidence in the outcome of

the proceeding.’ ” (quoting United States v. Dominguez

Benitez, 542 U.S. 74, 83 (2004)). Because the district court

was advised of the government’s position in the sentencing

memorandum and almost immediately after the announced

sentence, Waknine has not met his burden of showing that the

government’s voicing of its known position at the hearing

before sentence was announced would have led the district

court to reach a different conclusion. 

B

[4] Waknine also argues for the first time on appeal that the

district court violated Rule 32(i)(4)(A)(iii) of the Federal

Rules of Criminal Procedure by not giving the government an

opportunity to speak before imposing a sentence. Rule 32, in

pertinent part, provides that before imposing sentence the

court must “provide an attorney for the government an opportunity to speak equivalent to that of the defendant’s attorney.”

Fed. R. Crim. P. 32(i)(4)(A)(iii); see also United States v.

Carty, 520 F.3d 984, 991 (9th Cir. 2008) (en banc) (“The par12562 UNITED STATES v. WAKNINE

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ties must be given a chance to argue for a sentence they

believe is appropriate.”). 

[5] As we see it, the district court disregarded the express

command of Rule 32 when it announced Waknine’s sentence

before the government had spoken at the hearing. Possibly

this might be viewed as inconsequential if we considered the

government’s sentencing memorandum to be a statement at

the time of the hearing. However, the plain language of Rule

32 appears to contemplate that the government, like the defendant, will have an opportunity for a speaking role at the sentencing hearing before the district court has made a decision

on the sentence. This is what we consider to be the normal

reading of Rule 32, which here establishes what the court

must do before imposing sentence and which provides that the

opportunity of the government to speak shall be “equivalent

to that of the defendant’s attorney.” Thus, it cannot make

sense under this rule to have the defendant speak and then the

court announce its sentence without letting the government

speak responsively. The district court, therefore, plainly erred

when it permitted Waknine and his counsel to speak but did

not give the government an opportunity to speak before

imposing a sentence of 121 months of imprisonment. See

Ameline, 409 F.3d at 1078. 

However, under the third prong of plain error review, we

must examine whether the district court’s error affected Waknine’s substantial rights. Id.; see also United States v. Dallman, ___ F.3d ___, No. 05-30349, 2008 WL 2736010, at *5-

6 (9th Cir. July 15, 2008). Waknine “bears the burden of persuading us that his substantial rights were affected.” Ameline,

409 F.3d at 1078. He must establish that the probability of a

different sentence “ ‘is sufficient to undermine confidence in

the outcome of the proceeding.’ ” Id. (quoting Dominguez

Benitez, 542 U.S. at 83). 

[6] Where a district court denies a defendant the opportunity to allocute before sentencing, we have found nonharmUNITED STATES v. WAKNINE 12563

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less error that affected the defendant’s substantial rights. See

United States v. Medrano, 5 F.3d 1214, 1219 (9th Cir. 1993).

Waknine does not allege such an error, however, because the

district court gave Waknine an opportunity to speak at the

sentencing hearing, and Waknine used that opportunity to

request a lenient sentence. Instead, Waknine argues that his

rights were affected when the district court did not give the

government an opportunity to speak before sentencing. Waknine fails to persuade us. The government recommended a

108-month prison term in the sentencing memorandum it submitted to the district court four days before the sentencing

hearing and referred the district court to that recommendation

shortly after the district court imposed Waknine’s 121-month

sentence. Moreover, the district court’s reference to criminal

history category I supports the inference that the court had

familiarized itself with the parties’ filings.3 Given that the

108-month recommendation was before the district court in

the government’s sentencing memorandum and was brought

to the district court’s attention shortly after the announced

sentence, Waknine has not demonstrated that the government’s oral recommendation at the hearing before sentencing

would have changed the district court’s conclusion as to the

appropriate prison term. Reviewing for plain error, we hold

that the district court’s Rule 32(i)(4) error is not grounds for

vacating the sentence. 

C

[7] Finally, Waknine argues that the district court erred by

not considering the 18 U.S.C. § 3553(a) (“§ 3553(a)”) sen3To the extent that Waknine is contending that the district court violated

Rule 32(i)(3)(B) of the Federal Rules of Criminal Procedure, we conclude

that the district court did not plainly err by resolving Waknine’s factual

objection to his criminal history category after the imposition of sentence.

Given that the district court resolved this factual dispute in Waknine’s

favor (by applying a criminal history category I instead of criminal history

category II), any error did not affect Waknine’s substantial rights. See

Ameline, 409 F.3d at 1078. 

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tencing factors before imposing a sentence of 121 months of

imprisonment.4 In light of Gall v. United States, ___ U.S. ___,

128 S. Ct. 586, 596-97 (2007), the district court plainly erred

by not considering any of the § 3553(a) sentencing factors.

See Ameline, 409 F.3d at 1078 (noting that “[a]n error is plain

if it is contrary to the law at the time of appeal” (internal quotation marks omitted)). The district court’s error here was

patent insofar as the district court gave no reasons in reference

to the § 3553(a) factors before imposing the sentence. We

note that the district court, on the government’s query after

sentencing, said that it was sentencing at the mid-point of the

Guidelines range, viewing the criminal history as I, so the district court’s basic reasoning is known to us. However, there

was no contemporaneous announcement of the calculated

Guidelines range or satisfaction of the requirement that the

sentence be reconciled for reasonableness in light of the

§ 3553(a) factors. This leaves us with an uncertain application

of the plain error standard. It is clear that the district court’s

approach to sentencing in this case was plain error, as the

Supreme Court in Gall has made clear that the Guidelines

should be calculated as a starting point and that the district

court should consider the § 3553(a) factors in reaching a reasonable sentence, viewing the Guidelines range as discretionary. Gall, ___ U.S. at ___, 128 S. Ct. at 596-97; see also

Carty, 520 F.3d at 991. However, in this case, the district

court sentenced Waknine in 2006 before having the benefit of

both the Supreme Court’s decision in Gall and our follow-on

decision in Carty. From that standpoint, a sensible argument

can be made that we should vacate and remand for the district

court to resentence in the light of those precedents. That

would surely be correct if there had been objection to the sentencing procedure, but the answer is not entirely clear on plain

error review. 

4Under our precedent in United States v. Knows His Gun, 438 F.3d 913

(9th Cir. 2006), cert. denied, 547 U.S. 1214 (2006), where a defendant

does not object at sentencing to the district court’s failure to sufficiently

address and apply the § 3553(a) factors, we review such a claim on appeal

for plain error. Id. at 918. 

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[8] Although we see plain error, the issue remains as to

whether Waknine has demonstrated a reasonable probability

that he would have received a different sentence if the district

court had expressly considered the § 3553(a) factors. See

Ameline, 409 F.3d at 1078 (“He must establish ‘that the probability of a different result is sufficient to undermine confidence in the outcome of the proceeding.’ ” (quoting

Dominguez Benitez, 542 U.S. at 83)); see also Olano, 507

U.S. at 734 (“It is the defendant rather than the Government

who bears the burden of persuasion with respect to prejudice.”). Although it is a close question whether Waknine can

satisfy the third prong of the plain error test, we conclude that

the district court’s total failure to announce its calculated

Guidelines range to the parties and to consider expressly the

§ 3553(a) factors is such a serious departure from established

procedures that we will not reject the appeal because of the

prejudice prong of plain error review. When combined with

the district court’s violation of Rule 32, the district court’s

complete failure to abide by the required sentencing procedures is sufficient to support the inference “that the error must

have affected the outcome of the district court proceedings.”

Cotton, 535 U.S. at 632 (internal quotation marks omitted).

Given the flagrant nature of the district court’s error, which

in our judgment “seriously affect[s] the . . . public reputation

of judicial proceedings,” Johnson v. United States, 520 U.S.

461, 467 (1997) (internal quotation marks omitted) (alteration

in original), we exercise our discretion to notice the forfeited

error, vacate Waknine’s sentence, and remand for resentencing. We trust that at resentencing, the district court, being

fully advised, will announce the correctly-calculated Guidelines range, will discuss the § 3553(a) factors that render a

sentence reasonable, and will be certain to let the parties

speak, as required by Rule 32, before announcing a sentence.

III

Waknine also challenges the district court’s restitution

order on three grounds. Waknine raised these issues before

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the district court, and so the “restitution order is reviewed for

an abuse of discretion, provided it is within the bounds of the

statutory framework. Factual findings supporting an order of

restitution are reviewed for clear error. The legality of an

order of restitution is reviewed de novo.” United States v.

Gordon, 393 F.3d 1044, 1051 (9th Cir. 2004) (quoting United

States v. Stoddard, 150 F.3d 1140, 1147 (9th Cir. 1998)). 

[9] The Mandatory Victims Restitution Act (“MVRA”)

requires mandatory restitution for crimes of violence and

property offenses. 18 U.S.C. § 3663A. Because Waknine

pleaded guilty to a RICO offense, which is characterized as

a violent offense under 18 U.S.C. § 16, he must pay restitution to any person “directly and proximately harmed as a

result of the commission of [the] offense.” 18 U.S.C.

§ 3663A(a)(2). The district court ordered that Waknine pay

restitution to Eliyahu Hadad in the amount of $371,000 and

Viken Keuylian in the amount of $275,000. Waknine challenges this order by arguing that (1) the district court erred in

its restitution calculation by utilizing figures not advocated by

the government nor supported by the facts in evidence; (2) the

government failed to establish by a preponderance of the evidence the restitution claimants’ entitlement to the amounts

awarded; and (3) the district court improperly awarded the

restitution claimants travel expenses and investigation costs.

We conclude that the district court erred in calculating the

amount Waknine owed in restitution, that the government did

not establish by a preponderance of the evidence the amount

of restitution owed, and that the government did not demonstrate by a preponderance of the evidence that the investigation costs incurred by the victims were a direct result of

Waknine’s RICO offense conduct. 

A

[10] First, Waknine argues that the district court erred in

calculating the amount of restitution Waknine was required to

pay to Hadad. We agree. At the restitution hearing, while

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attempting to determine the amount of money Hadad lost on

his loan with Waknine, the district court stated, “It should be

the difference between $345,000 that he got and 580 that he

had to pay back. The difference is 240,000 . . .” The difference between $580,000 and $345,000 is $235,000. The district court thus clearly erred by including an additional $5000

in Waknine’s restitution order. 

B

Next, Waknine argues that the government failed to establish by a preponderance of the evidence the restitution claimants’ entitlement to the amounts awarded by the district court.

After reviewing the record, we conclude that the district court

gave an inadequate explanation as to how it determined

Hadad’s award amount and insufficient reasoning as to why

it accepted the nonitemized victim affidavits without requiring evidence or proof that all costs incurred were directly

related to Waknine’s convictions. See United States v. Menza,

137 F.3d 533, 538 (7th Cir. 1998). 

[11] Under 18 U.S.C. § 3664 (“§ 3664”), a dispute as to the

proper amount of restitution must be resolved by the district

court by a preponderance of the evidence. 18 U.S.C.

§ 3664(e); see also United States v. Clayton, 108 F.3d 1114,

1118 (9th Cir. 1997). The government bears the burden of

proving that a person or entity is a victim for purposes of restitution, Baker, 25 F.3d at 1455, and of proving the amount

of the loss, 18 U.S.C. § 3664(e). The district court is not

required to make explicit findings to justify its restitution

order, but “may refer any issue arising in connection with a

proposed order of restitution to a magistrate judge or special

master for proposed findings of fact.” 18 U.S.C. § 3664(d)(6).

We conclude that § 3664 recognizes that specific findings of

fact are necessary at times and contemplates that the district

court will set forth an explanation of its reasoning, supported

by the record, when a dispute arises as to the proper amount

of restitution. See Menza, 137 F.3d at 538. 

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Because the government could not ascertain the amount of

money Hadad lost to the RICO conspiracy, it only requested

that the district court award $131,000 in restitution to Hadad

—$100,000 in attorneys’ fees, $25,000 of interest on a mortgage taken out by Hadad to pay off the loan that was the subject of Waknine’s offense conduct, and $6000 in travel costs

to participate in the investigation and prosecution of Waknine.

In his victim loss summary, Hadad claimed that he had borrowed $250,000 from the conspirators and that he had been

forced to repay $580,000. However, at Waknine’s trial

(before Waknine pleaded guilty), Hadad testified that he had

paid Waknine $591,000 based upon his earlier receipt of a

$325,000 loan. Cooperating conspirator Atia testified at Waknine’s trial that Hadad received $450,000, while cooperating

conspirator Benharosh testified that Hadad received a total of

$595,000. As a result of the conflicting testimony, the government concluded that the amount of money Waknine loaned to

Hadad “remain[ed] unclear, falling somewhere between

$250,000 and $595,000,” and did not request restitution for

the amount Hadad paid the conspirators. 

[12] Nevertheless, the district court ordered that Waknine

pay $371,000 in restitution to Hadad. To arrive at $371,000,

the district court added the $131,000 in non-loan losses

requested by the government at the restitution hearing to the

difference it concluded existed between the loan Hadad

received from the conspirators, $345,000, and the amount of

money he paid back to the conspirators, $580,000.5 The district court did not explain how it arrived at these loan figures.

No combination of figures supplied by Hadad or the other

witnesses in this case could combine to total $345,000. In the

absence of an explanation of the award by the district court,

and because of the conflicting testimony regarding the amount

5As we discussed in part III.A, the district court clearly erred in calculating the total amount of restitution, and the total amount of restitution

based on the district court’s stated numbers should have been $366,000,

not $371,000. See supra at pt. III.A. 

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of the original loan and Hadad’s own inconsistent statements

regarding the amount he repaid the conspirators, we are

unable to determine if the district court abused its discretion

in awarding restitution to Hadad in the amount of $371,000.

On remand, the district court must provide an explanation of

any restitution awarded to Hadad for the losses he incurred as

a result of his loan with the conspirators. 

[13] With regard to Hadad’s request for $25,000 for the

interest he had to pay to take a second mortgage on his house,

Hadad’s $100,000 in attorneys’ fees, Hadad’s $6000 in travel

costs, Keuylian’s $250,000 in attorneys’ fees, and Keuylian’s

$25,000 in investigator’s fees, the only items of evidence provided by the government to support these restitution claims

were the loss summaries prepared by each victim and submitted to the court. The summaries only listed the loss claimed,

e.g., “Joe Cavallo—Attorney at Law,” and the amount of the

loss, e.g., “$250,000.” These loss summaries did not contain

itemized lists indicating, for example, the time spent by the

attorney, the activities engaged in by the attorney, and the

attorney’s credentials and billable rate. Nor did the government present supporting documentation to prove by a preponderance of the evidence that Hadad had taken out a second

mortgage on his house, or that he had traveled to Los Angeles

from Miami and incurred $6000 in travel expenses. 

[14] In light of “the remedial purposes underlying the

MVRA,” our precedent grants “district courts a degree of

flexibility in accounting for a victim’s complete losses.” See

Gordon, 393 F.3d at 1053. Despite this flexibility, § 3664

minimally requires that facts be established by a preponderance of the evidence, and “the district court [may] utilize only

evidence that possesses ‘sufficient indicia of reliability to support its probable accuracy.’ ” United States v. GarciaSanchez, 189 F.3d 1143, 1148-49 (9th Cir. 1999) (vacating a

sentence and remanding, holding that “the district court had

. . . an independent obligation to ensure that the sentence was

supported by sufficient, reliable evidence”); see also United

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States v. Brock-Davis, 504 F.3d 991, 1002 (9th Cir. 2007)

(“[T]he government must provide the district court with more

than just . . . general invoices . . . ostensibly identifying the

amount of their losses.” (quoting Menza, 137 F.3d at 539)).

Here, in light of Waknine’s challenge to the victim affidavits,

the government offered insufficient evidence to prove that it

is more likely than not that the victims lost the amounts listed

in their loss summaries. At the restitution hearing, Waknine

argued that Hadad and Keuylian incurred a portion of their

attorneys’ fees and investigation costs due to their suspected

involvement in the conspiracy. Although the government concedes that Hadad initially had been a target of the RICO conspiracy investigation, the district court awarded restitution of

the attorneys’ fees and investigation costs without requiring

the government to present additional evidence, beyond the

victim loss summaries, detailing the legal and investigative

services received by Hadad and Keuylian. We hold that in this

case the district court erred by relying exclusively on the onepage loss summaries provided by the victims and in not

requiring more detailed explanations of the losses each victim

suffered. 

[15] The dissent characterizes our holding today as concluding that victim affidavits in general provide insufficient

indicia of reliability to support a restitution order. To the contrary, victim affidavits will generally provide sufficient, reliable evidence to support a restitution order. In this case,

however, the affidavits were too summary and too conclusory

to be sufficiently reliable in the face of Waknine’s objections.

It is unreasonable to expect a defendant to be able to counter

evidence provided by the victim concerning attorneys’ fees.

Rather, it is the responsibility of the government, aided by the

victim, to provide adequate reliable evidence. See 18 U.S.C.

§ 3664(d)(6). And, it is the responsibility of the district court

to resolve a dispute as to the proper amount of restitution by

a preponderance of the evidence, or to refer the issue to a

magistrate judge for proposed findings of fact. See id.

§ 3664(d)(6) & (e). A sufficiently detailed affidavit doubtless

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would suffice in most cases, but we remain of the view that

what was done here was too conclusory. Because the district

court did not ensure that the restitution order was supported

by sufficient, reliable evidence, on remand the district court

may only award restitution for attorneys’ fees, investigation

costs, travel expenses, and mortgage payments if the government provides sufficiently detailed evidence that Hadad and

Keuylian incurred those costs as a direct result of Waknine’s

RICO offense conduct. 

C

Finally, Waknine contends that the district court improperly

awarded to the restitution claimants their travel expenses and

investigation costs. He argues that the attorneys’ fees incurred

by Hadad and Keuylian, the investigator’s fees incurred by

Keuylian, and the travel expenses incurred by Hadad are too

indirectly related to the offense conduct to be reimbursed

under 18 U.S.C. § 3663A (“§ 3663A”). 

With regard to Hadad’s travel expenses, the plain language

of 18 U.S.C. § 3663A(b)(4) directs the sentencing court to

include in the restitution order reimbursement for “transportation, and other expenses incurred [by the victim] during participation in the investigation or prosecution of the offense or

attendance at proceedings related to the offense.” If, on

remand, the government proves by a preponderance of the

evidence that Hadad incurred $6000 in travel expenses to

assist in the investigation and prosecution of Waknine, then

the district court may award restitution in that amount to

Hadad. 

As to the attorneys’ fees and investigation costs,

“[g]enerally, investigation costs—including attorneys’ fees—

incurred by private parties as a ‘direct and foreseeable result’

of the defendant’s wrongful conduct ‘may be recoverable.’ ”

Gordon, 393 F.3d at 1057 (quoting United States v. Phillips,

367 F.3d 846, 863 (9th Cir. 2004)). We have affirmed restitu12572 UNITED STATES v. WAKNINE

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tion orders for attorneys’ fees where the fees “were directly,

not tangentially, related to” the offense conduct. United States

v. DeGeorge, 380 F.3d 1203, 1221 (9th Cir. 2004) (affirming

restitution order for insurance company’s attorneys’ fees in a

civil action to rescind the insurance contract where defendant

attempted to collect on an insurance policy after illegally

sinking the insured boat and was later indicted for perjury

committed in the civil suit); see also United States v. Cummings, 281 F.3d 1046, 1052-53 (9th Cir. 2002) (affirming restitution order of attorneys’ fees incurred by wife’s attempt in

separate civil proceedings to regain custody of her children

because the fees were “a direct and foreseeable result” and

“[t]here would have been no need to engage in civil proceedings to recover the children if [husband] had not unlawfully

taken them to Germany”). 

In Gordon, where an employee of Cisco embezzled millions of dollars in cash and stocks, we held that the district

court “reasonably concluded that Cisco’s investigation costs,

including attorneys’ fees, were necessarily incurred by Cisco

in aid of the proceedings.” 393 F.3d at 1057 (explaining that

Cisco had to respond to five grand jury subpoenas and a number of government requests that required it to analyze vast

amounts of documentation, including every item regarding its

investments in more than 60 companies that were Gordon’s

possible targets). However, there are differences between the

investigation costs incurred by Cisco in Gordon and the

investigation costs incurred by the victims here. Unlike the

attorneys’ fees in Gordon, which were incurred exclusively

from the document review required to track the fraud, see id.,

the attorneys’ fees incurred by Hadad and Keuylian were in

part, if not entirely, incurred to protect themselves from prosecution.6

 In Gordon, the complex investigation required to

6Hadad first hired an attorney because he was initially a suspect in the

government’s investigation. Because of the lack of information provided

by Keuylian in his request for restitution, it is unclear when he first hired

an attorney and why. 

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uncover the extent of Gordon’s fraud was documented in

detail and thoroughly reviewed by the district court. Id. Here,

no evidence was presented by the government to demonstrate

that it was reasonably necessary for Hadad or Keuylian to

incur attorneys’ and investigator’s fees to participate in the

investigation or prosecution of the offense. 

[16] The lack of detailed documentation to support the restitution claims of Hadad and Keuylian prevented the district

court from thoroughly reviewing the alleged losses and determining whether they were “necessarily incurred . . . in aid of

the proceedings.” See Gordon, 393 F.3d at 1057 (concluding

that the “district court carefully analyzed Cisco’s [restitution]

requests” because the district court reduced the loss amount

based on its determination that the evidence “does not support

fully the extraordinary expense associated with Cisco’s

attempt to recover data from Defendant’s laptop computer”).

Without more detailed evidence as to the type of attorneys’

and investigator’s fees incurred and the extent that these fees

were incurred to aid in the prosecution of Waknine, we cannot

determine whether the district court abused its discretion in

awarding restitution based on those costs under § 3663A. On

remand, the district court may only award restitution of travel

expenses and investigation costs, including attorneys’ fees, if

the government provides sufficiently detailed evidence to

demonstrate by a preponderance of the evidence that these

costs were incurred by Hadad and Keuylian in aid of Waknine’s investigation or prosecution, and that such expenses

and costs were reasonably necessary. 

IV

Finally, complaining about the sentencing errors, Waknine

requests that his case be remanded to a different judge. Waknine further alleges that “[t]here is a generalized pattern of

cowering by attorneys who appear” before Judge Real and a

general pattern of parties afraid to advocate in Judge Real’s

courtroom. By contrast, Waknine does not allege that Judge

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Real exhibited any bias for or against either of the parties in

this case. 

We stand by our general rule: “Absent unusual circumstances, resentencing is to be done by the original sentencing

judge.” United States v. Sharp, 941 F.2d 811, 817 (9th Cir.

1991), superseded in part on other grounds, 18 U.S.C.

§ 3663, as recognized in United States v. Jackson, 982 F.2d

1279, 1282 n.1 (9th Cir. 1992). When there are no allegations

of bias, we consider the following factors in deciding whether

“unusual circumstances” exist such that remand to a different

judge is appropriate:

(1) whether the original judge would reasonably be

expected upon remand to have substantial difficulty

in putting out of his or her mind previouslyexpressed views or findings determined to be erroneous or based on evidence that must be rejected, (2)

whether reassignment is advisable to preserve the

appearance of justice, and (3) whether reassignment

would entail waste and duplication out of proportion

to any gain in preserving the appearance of fairness.

The first two factors are of equal importance, and a

finding of either one would support remand to a different judge. 

United States v. Working, 287 F.3d 801, 809 (9th Cir. 2002)

(citations and internal quotation marks omitted). 

[17] The district court’s procedural errors in other cases do

not demonstrate that in this particular case it will have “substantial difficulty in putting out of [its] . . . mind previouslyexpressed views or findings determined [by us] to be erroneous.” See id. at 809-10. Moreover, Waknine’s contention that

attorneys “cower” before Judge Real is not supported by the

record in this case. We note that neither Waknine’s attorney

nor the government’s attorney faltered in the least bit in their

arguments or retreated from their positions at the sentencing

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and restitution hearings. We are confident that in future proceedings counsel will not hesitate to advocate before the district court. We reject Waknine’s request for a change of judge,

and remand this case for further consideration and proceedings consistent with this opinion. 

CONVICTION AFFIRMED; SENTENCE VACATED;

RESTITUTION ORDER VACATED; REMANDED.

IKUTA, Circuit Judge, concurring in part and dissenting in

part: 

I agree with the majority that Waknine’s sentence should

be vacated and the case should be remanded for resentencing.

I further concur in the majority’s decision not to reassign this

case to a different judge on remand. On the restitution issue,

I agree with the majority that the district court clearly erred

in its factual analysis of the loan amounts submitted as part

of Hadad’s restitution claim, which resulted in the district

court’s order that Waknine pay $371,000 in restitution to

Hadad. I agree with the majority that Hadad’s restitution

award should therefore be vacated. However, I must respectfully dissent from the remainder of the majority’s restitution

analysis in Section III of its opinion. Most critically, I cannot

agree that “the district court erred by relying exclusively on

the one-page loss summaries provided by the victims and in

not requiring more detailed explanations of the losses each

victim suffered.” Maj. op. at 12571. There is no support for

this proposition, either in the statutory framework that governs restitution or in our case law, and there is no basis for

vacating the district court’s factual finding in this case. 

“A restitution order is reviewed for an abuse of discretion,

provided that it is within the bounds of the statutory framework. Factual findings supporting an order of restitution are

reviewed for clear error. The legality of an order of restitution

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is reviewed de novo.” United States v. Marks, 530 F.3d 799,

811 (9th Cir. 2008) (internal quotation marks omitted). “A

finding is ‘clearly erroneous’ when although there is evidence

to support it, the reviewing court on the entire evidence is left

with the definite and firm conviction that a mistake has been

committed.” United States v. United States Gypsum Co., 333

U.S. 364, 395 (1948); see also United States v. Crook, 9 F.3d

1422, 1427 (9th Cir. 1993). Under this deferential standard,

“this court will not reverse if the district court’s findings are

plausible in light of the record viewed in its entirety . . . even

if it is convinced it would have found differently.” Katie A.,

ex rel. Ludin v. Los Angeles County, 481 F.3d 1150, 1155 (9th

Cir. 2007) (alteration in original) (internal quotation marks

omitted). 

The Mandatory Victims Restitution Act (“MVRA”), sets

forth procedures for issuing restitution orders in 18 U.S.C.

§ 3664. See United States v. Moreland, 509 F.3d 1201, 1222-

23 (9th Cir. 2007). Among other things, the MVRA directs

the court to order the probation officer to prepare a report

including “information sufficient for the court to exercise its

discretion in fashioning a restitution order.” 18 U.S.C.

§ 3664(a). In collecting this information, the probation officer

must “provide notice to all identified victims of . . . the opportunity of the victim to file with the probation officer a separate affidavit relating to the amount of the victim’s losses

subject to restitution.” 18 U.S.C. § 3664(d)(2)(A)(vi). Section

3664(d)(2)(B) further directs the probation officer to “provide

the victim with an affidavit form to submit pursuant to subparagraph (A)(vi).” 

The structure of Section 3664 makes clear that the court

may use the completed victim affidavit in determining a victim’s losses. This is consistent with our precedents, which

allow courts to consider and weigh the evidentiary value of

witness affidavits, signed under penalty of perjury. See, e.g.,

Fed. R. Civ. P. 56(e)(1) (first-party affidavits can serve as

competent evidence to support or oppose a summary judgUNITED STATES v. WAKNINE 12577

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ment motion); Williams v. Boeing Co., 517 F.3d 1120, 1128

(9th Cir. 2008) (“On a summary judgment motion challenging

standing a plaintiff may not rest on mere allegations, but must

set forth by affidavit or other evidence specific facts that demonstrate standing.” (internal quotation marks omitted)).

Indeed, the Fifth Circuit, addressing this issue against the

backdrop of the pre-MVRA version of § 3664, held that victims’ affidavits are a sufficient factual basis upon which to

rest a restitution decision. See United States v. Rochester, 898

F.2d 971, 982 (5th Cir. 1990) (holding that an affidavit establishing the victim’s loss was “sufficient to satisfy the . . .

requirement for a factual basis”). 

Moreover, the Sentencing Guidelines contemplate that the

district court will rely on witness affidavits in order to resolve

factual disputes that arise as part of sentencing proceedings.

Section 6A1.3(a) states: 

When any factor important to the sentencing determination is reasonably in dispute, the parties shall be

given an adequate opportunity to present information

to the court regarding that factor. In resolving any

dispute concerning a factor important to the sentencing determination, the court may consider relevant

information without regard to its admissibility under

the rules of evidence applicable at trial, provided that

the information has sufficient indicia of reliability to

support its probable accuracy. 

The commentary notes to § 6A1.3 clarify that “[w]ritten statements of counsel or affidavits of witnesses may be adequate

under many circumstances.” See also United States v. Ibanez,

924 F.2d 427, 430 (2d Cir. 1991) (noting that under the commentary to section 6A1.3, witness affidavits may be sufficient

to resolve factual disputes). “Any dispute as to the proper

amount or type of restitution shall be resolved by the court by

the preponderance of the evidence.” 18 U.S.C. § 3664(e). 

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There is nothing in this framework that requires victims to

provide a detailed itemization of their losses. There is also

nothing in the governing law that requires victims to submit

corroborating evidence of their claims. To the contrary, as a

general rule we have expressly rejected the argument that

§ 6A1.3 “impose[s] any ‘corroboration’ requirement” on parties submitting evidence to resolve factual disputes at sentencing. United States v. Alonso, 48 F.3d 1536, 1546 (9th Cir.

1995). In short, because the MVRA, the Guidelines, and our

case law permit a district court to rely on a victim’s affidavit,

and because the governing law creates no detailed itemization

or corroboration requirement, the district court’s reliance on

the victims’ affidavits in fashioning its restitution order was

clearly “within the bounds of the statutory framework.”

Marks, 530 F.3d at 811 (internal quotation marks omitted). 

Nor is there any basis for holding that the district court’s

restitution order was clearly erroneous. Here, both Hadad and

Keuylian submitted form affidavits which they signed under

penalty of perjury. Waknine did not submit any evidence contradicting the restitution amounts he now challenges on

appeal, but merely made unsupported arguments to the district

court. The district court made a factual finding as to the

amount of restitution based on these victim affidavits.

Because the relevant portions of the victim affidavits are

uncontradicted evidence of loss, the district court’s determination was based on a preponderance of the evidence. Moreover, the majority has not identified any evidence in the

record that would allow it to conclude that the district court

erred in calculating the amount of the restitution order, for

example, by failing to consider contrary evidence or miscalculating the amount of loss.1

1For purposes of this analysis, I set aside the subcomponent of Hadad’s

affidavit that dealt with the amounts he was loaned and forced to repay.

As I note above, I agree with the majority that the district court’s analysis

of this question was clearly erroneous. 

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Instead, the majority seems to harbor doubts about the victims’ honesty and care in preparing the affidavits. See maj.

op. at 12570-72 (holding that the victim affidavits were insufficient because they were not adequately detailed, were uncorroborated, and could have included non-reimbursable costs).

Because of these suspicions, the majority declares that the

affidavits are unreliable, and thus that the district court erred

in using them to formulate the restitution order. The majority

considers the absence of contrary evidence in the record to be

inconsequential, because “[i]t is unreasonable to expect a

defendant to be able to counter evidence provided by the victim concerning attorneys’ fees.” Maj. op. at 12571. But in

fact, the MVRA and Guidelines address this very concern by

providing procedural mechanisms for developing disputed

facts. Waknine could have tested the victims’ credibility and

the reliability of their claims of loss by requesting an evidentiary hearing. See 18 U.S.C. § 3664(d)(4) (allowing the district

court to receive additional documentation or hear testimony to

resolve factual issues arising as part of the restitution analysis); United States v. Gordon, 393 F.3d 1044, 1049-50 (9th

Cir. 2004) (district court conducted an evidentiary hearing to

resolve disputed restitution issues); see also U.S.S.G. § 6A1.3

cmt. (evidentiary hearings may be held to resolve disputed

factual issues at sentencing). Indeed, when the evidentiary

basis of a district court’s sentencing decision is of questionable reliability, it may be error for a district court to decline

a defendant’s request for an evidentiary hearing. See United

States v. Jiminez Martinez, 83 F.3d 488, 494-95 (1st Cir.

1996). 

But here, Waknine did not request an evidentiary hearing

on the reliability of the affidavits submitted by Hadad and

Keuylian. Because the defendants could have developed evidence that would contradict the victim affidavits and failed to

do so, it is difficult to discern how the majority could arrive

at a “definite and firm conviction that a mistake has been

committed.” United States Gypsum Co., 333 U.S. at 395. Had

the majority been reviewing the victim affidavits in the first

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instance, it might well have reached a different result than the

district court and rejected the affidavits as insufficiently credible. Of course, that is not an appropriate basis for reversing

the district court’s decision in this context. See Katie A., 481

F.3d at 1155. 

In reaching its conclusion, the majority principally relies on

United States v. Garcia-Sanchez, 189 F.3d 1143 (9th Cir.

1999). This case does not support the majority’s position.

Although Garcia-Sanchez held that “in establishing the facts

. . . underlying a sentence, the district court [must] utilize only

evidence that possesses sufficient indicia of reliability to support its probable accuracy,” id. at 1148 (internal quotation

marks omitted), we based this holding on § 6A1.3(a) of the

Sentencing Guidelines. As noted above, the commentary

notes to § 6A1.3 specify that written affidavits “may be adequate under many circumstances.” Thus, Garcia-Sanchez

does not stand for the proposition that affidavits must meet

some heightened standard of specificity in order to have “sufficient indicia of reliability” for purposes of sentencing and

restitution proceedings. 

Moreover, the facts of Garcia-Sanchez are considerably

different from those in the present case. Garcia-Sanchez concerned a district court’s formulation of a sentence for a defendant convicted of conspiracy to sell cocaine, not the

formulation of a restitution order. We determined that, for

purposes of sentencing, “[t]he district court’s estimate of the

conspiracy’s weekly sales was not based on reliable evidence”

because it was “supported only by unexplained conclusions

drawn from unrevealed out-of-court statements.” GarciaSanchez, 189 F.3d at 1148. Here, in contrast, the district

court’s restitution decision was supported by sworn affidavits

from persons who had first-hand knowledge of the loss, i.e.,

the victims. 

Nor does United States v. Brock-Davis, 504 F.3d 991 (9th

Cir. 2007), support the majority’s position. In Brock-Davis,

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we were presented with the question whether factual discrepancies in the record required us to vacate the district court’s

restitution order. Id. at 1001-02. We declined to do so, noting

that “although the government must provide the district court

with more than just . . . general invoices . . . ostensibly identifying the amount of their losses, the government’s burden of

proof has been met,” because the victim “made an overall

statement of his final request’s accuracy that Brock-Davis

fails to discredit.” Id. at 1002 (ellipses in original) (internal

citation and quotation marks omitted). Brock-Davis is thus

inapposite here, because the government submitted more than

just “general invoices.” Rather, the government submitted

affidavits from the victims, which included declarations under

penalty of perjury that the contents of the affidavits were true

and correct. Moreover, as in Brock-Davis, Waknine did not

introduce any evidence to discredit the accuracy of the final

request for restitution submitted by the victim. Id. Thus, to the

extent that Brock-Davis does apply in the present context, it

weighs in favor of a conclusion that the district court’s restitution decision should be partly upheld. 

In sum, the majority creates a new and more onerous

requirement for victim affidavits than is required by the

MVRA, the Guidelines, or our case law. The rule promises to

create new procedural hurdles for victims seeking restitution,

a result the MVRA was designed in large part to avert. See

Moreland, 509 F.3d at 1222-23. Given that the governing law

clearly contemplates that affidavits may be competent evidence to resolve factual disputes at sentencing, I see no basis

for holding that the district court abused its discretion in relying on the victims’ affidavits to formulate a restitution order

in this case. Therefore, I respectfully dissent in part from Section III of the majority opinion.

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