# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 5- 35 63

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Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Co le m an Carp en te r

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

__ __ __ __ __ __
App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of M is so ur i - St . Lou is

__ __ __ __ __ __

Su bm it te d: Sep te m

be r 23 , 20 16
Fil ed : No ve m

be r 23 , 20 16

__ __ __ __ __ __

Befo re WOL LMAN, BRIGHT, an d KELLY, Circ ui t J ud ge s.

__ __ __ __ __ __

BRIGHT, Ci rcu it Ju dg e.

The go ve rn m en t ch arg ed Co le m an Carp en te r wit h m ai l an d wire frau d ari si ng

fro m a sc he m e in whi ch he ov erp ai d fo r co m m od it ie s t o t h e b e n e fit of cert ai n

cu st om ers whi le m an ag in g a gr ai n el ev at or fo r Bu ng e of Nor th Am eri ca ( Bu ng e).

Afte r Carp en te r pl ead ed gu il ty to on e co un t of m ai l frau d, th e di st ric t co ur t se nt en ced

hi m to twel ve m on th s an d on e da y in pri so n. Th e d is tri ct co ur t al so ord ered hi m topa y

$1 ,56 1,5 16 .25 in res ti tu ti on to Bu ng e, whi ch in cl ud ed $8 7,5 36 .65 in att or ne y 's

f ees an d ex pe ns es Bu ng e pa id to an ou ts id e co un se l du rin g th e in ve st ig at io n o f
Carp en te r's frau du le nt sch em e an d h is pro se cu ti on

.

Carp en te r ap pe al s arg ui ng th e di st ric t co ur t erre d in cal cu la ti ng th e am ou nt of

res ti tu ti on , an d b y

in cl ud in g t he at to rn ey 's fees fro m Bu ng e's ou ts id e co un se l in th e

res ti tu ti on award

. W e affi rm th e po rti on of th e di st ric t co ur t's res ti tu ti on award whi ch

d o e s no t in cl ud e at to rn ey 's fees ($ 1,4 73 ,98 0.0 0)

, bu t va cat e th e po rti on awar d i n g

at to rn ey 's fees an d ex pe ns es ($ 87 ,53 6.6 5)

, an d rem an d to th e di st ric t co ur t fo r fu rth er

pr oc eed in gs

.

I

Bu ng e, a gl ob al ag ric ul tu re co m m od it ie s bu si ne ss , em

pl oyed Carp en te r as th e

m an ag er of a gr ai n elev at or in Hick m an , Ken tu ck y

. Bu ng e au th or iz ed Carp en te r to

pu rch as e ag ric ul tu ral co m m od it ie s, whi ch in cl ud ed co rn , whe at an d so y be an s, fro m

pr od uc ers an d m er c h an ts "o n th e sp ot ." In ad di ti on , Carp en te r co ul d en te r in to

fu tu res co nt ract s fo r co m m od it ie s t o b e d el iv ered at a lat er d at e.

F u t u r es co nt ract s ha d two co m po ne nt s: th e fu tu res pr ic e an d th e ba si s. Th e

fir st co m po ne nt – t he fu tu res pr ic e – was se t by co m m od it ie s m ark et s. Bu ng e

pr ov id ed Carp en te r acc es s t o t he cu rren t fut ur es pr ic es el ect ro ni cal ly an d th ro ug h a

co m m erci al tra di ng de sk (h ed ge de sk ) lo cat ed at it s St

. Lou is

, Mi ss ou ri he ad qu art ers

. Carp en te r was au th or iz ed to es ta bl is h th e fu tu res pr ic e co m po ne nt of th e pe r bu sh el

pr ic e fo r a pa rti cu la r fu tu res co nt ract ba s e d u po n th e cu rren t fu tu res pr ic e as
de te rm in ed by the Ch ic ag o B oa rd of Tra de (CBOT).

The se co nd co m

po ne nt – th e ba si s

– w a s s e t by Bu ng e an d de pe nd ed on

va rio us m ark et co nd it io ns , su ch as lo cat io n of a po in t of pu rch as e, op erat io na l ne ed s

-2

-of

Bu ng e, an d p ric es off

ered by a com

pe ti to r. Bun ge ga ve Carp en te r th e au th or it y

1

to "p us h th e ba si s" in or de r to res po n d t o ch an gi ng m ark et co nd it io ns or th e

op erat io na l ne ed s of Bu ng e, bu t li m it ed th is au th or it y to $.0 8 pe r bu sh el at th e m os t.

So

, fo r ex am

pl e, if th e ba si s at a gi ve n ti m e was $- .15

, Carp en te r ha d th e au th or it y to

pu sh it to $-.0 7.

Bet ween 20 09 an d 20 13

, Carp en te r freq ue nt ly en te red in to fu tu res co nt ract s in

ex ces s of th e co m

bi na ti on of th e CBOT cu rren t fu tu res pr ic e an d Bu ng e's ba si s, an d

hi s li m it ed au th or it y to "p us h th e ba si s." In fact

, on so m e oc cas io ns Carp en te r

in crea se d th e pr ic e Bu ng e pa id fo r co m m od it ie s by $.3 0, $.4 0, or .$5 0 pe r bu sh el

. Fo r

ex am pl e, on Aug us t 1, 20 13

, Carp en te r en te red in to a fu tu res c o n t r a ct fo r 60 ,00 0

bu sh el s of co rn at $5 .25 pe r bu sh el

. Carp en te r u t i l i zed a fu tu res pr ic e of $5 .63 pe r
bu sh el wit h a ba si s of $- .38 , d es pi te th e fact th at th e h ed ge de sk pro vi de d h im wit h

a CBOT cu rren t fu tu res pr ic e of on ly $4 .90 75

, an d th e hi g h e s t p r i ce pa id on th e
CBOT th at da y

for co rn was $ 4.9 97 5.

Thu s, Carp en te r in fla te d th e fu tu res pr ic e co m po ne nt of th e co nt ract by $.7 22 5

pe r bu sh el ba se d on th e CBOT cu rren t fu tu res pr ic es , or by $.6 32 5 pe r bu sh el ba se d

on th e CBOT hi gh pr ic e of th e da y

. Afte r ad jus ti ng fo r th e ba si s, th e am ou nt Bu ng e
lo st on th is si ng le co nt ract was $ 43 ,35 0, as m eas ur ed by th e di ffer en ce bet ween th e $5 .63 fu tu res pr ic e ut il iz ed by Carp en te r an d th e ap pr ov ed CBOT cu rre n t f u t u r e s

pr ic e of $4 .90 75 (6 0, 0 00 bu sh el s x $.7 22 5)

. Carp en te r th en m is rep res en te d th es e

un au th or iz ed tra ns act io ns in m ai li ng s t o B un ge he ad qu art ers

.

Dur in g th e sc he m e, C a r pe nt er rece iv ed la rg e pa y m en ts of m on ey fro m so m e

of th e gr ai n el ev at or cu st om ers

. Fo r ex am pl e, in co ns ecu ti ve y ears in Mar ch 20 09

Exa m pl es in th e reco rd rep or t t he ba si s as a ne ga ti ve nu m be r, su ch as $- .38

. 1

In ot he r wor ds

, th e fin al pr ic e of an y pa rti cu la r fu tu res co nt ract fo r th e se ll in g farm er

– a fte r co m

bi ni ng th e CBOT cu rren t fu tu res pri ce an d B un ge 's b as is – wou ld li ke ly
be be lo w th e CBOT cu rren t fu tu res pri ce t o re fle ct Bu ng e's op erat in g c os ts

.

-3

-an d 2 01 0, Carp en te r rece iv ed $1 0,0 00 ch eck s from Ro nn ie Bat es Farm s, o ne of t he

gr ai n el ev at or 's cu st om ers

. Carp en te r's ba nk acco un t al so sh owe d la rg e cas h de po si ts

m ad e be twee n 20 09 an d 20 13 to ta li ng ov er $3 8,0 00

. Carp en te r de ni es th e cas h

de po si ts he m ad e to hi s ba nk acco un t du rin g th at ti m e were rel at ed to th e frau d

sc he m e.

In 20 13

, Bu ng e di sc ov ered Carp en te r's frau d du rin g an in te rn al au di t. Bu ng e

as ke d th e Tho m

ps on Co bu rn la w fir m in St

. Lou is to as si st in rev ie win g an d as se ss in g Carp en te r's un au th or iz ed tra ns act io ns , whi le at th e sa m e ti m e pr ov id in g in fo rm at io n

t o t h e go ve rn m en t fo r po te nt ia l cri m in al ch arg es ag ai ns t Carp en te r. Tho m ps on

Co bu rn as si st ed Bu ng e an d th e go ve rn m en t in rev ie win g th e tra ns act io ns bo th be fo re

an d aft er a fed eral gr an d jury ret ur n e d a n i n di ct m en t ag ai ns t Carp en te r on Ju ne 25

, 2 0 1 4

. Afte r be in g ch arg ed

, Carp en te r pl ead ed gu il ty to on e co un t of m ai l frau d in

vi ol at io n o f 18 U.S.C. § 1 34 1.

Pri or to se nt en ci ng , a pr o b a ti on of fic er pr ep ared a Pres en te nc e In ve st ig at io n Rep or t (PSR ) whi ch

, in pa rt, cal cu la te d th e a mo u n t of lo ss th at res ul te d fro m Carp en te r's frau d pu rs ua nt to Uni te d St at es Sen te nc in g Gui de li ne s Ma nua l (U

. S. S. G .)
§ 2B 1.1

. The PSR de te rm in ed lo ss us in g a "o ne -d ay Ch ic ag o Bo ard of Trad e hi gh

pr ic e" as th e nu m

be r to be su bt ract ed fro m th e in fla te d pr ic e pa id by Carp en te r. Fo r

it s pa rt, th e go ve rn m en t reco m m en d e d lo ss sh ou ld be cal cu la te d by co m pa rin g a

"t wo- da y " CBOT hi gh p r i c e t o th e pr ic e of Carp en te r's un au th or iz ed tra ns act io ns , whi ch was m or e co ns erv at iv e th an th e m et ho d reco m m en de d by th e PSR an d res ul te d

in a lo wer lo ss am ou nt

. Usi ng th is two -d ay m et ho d of cal cu la ti on , t he go ve rn m en t

de te rm in ed Bu ng e ov erp ai d it s cu st om ers ap p r o x i matel y $9 37 ,00 0 as th e res ul t of

Ca rp en te r's un au th or iz ed tra ns act io ns

. In Carp en te r's pl ea ag reem en t, he ad m it ted his

frau d sc he m e res ul te d in "ap pr ox im at el y $9 37 ,00 0" in ov erp ay m en ts by Bu ng e to

va rio us cu st om ers

.

At se nt en ci ng , th e di st ric t co ur t ad op te d th e pa rti es ' ag reem en t as to am ou nt of

lo ss to cal cu la te Carp en te r's ad vi so ry gu id el in es ran ge , an d th en tu rn ed to th e se pa rat e

-4

-is su e of de te rm in in g th e am ou nt of lo ss fo r pu rp os es of res ti tu ti on

. The di st ric t co ur t

ag reed th e pr eci se am ou nt of res ti tu ti on was di ffi cu lt to cal cu la te be cau se th e m ark et

pr ic e at th e ex act ti m e of da y Carp en te r en te red in to ea c h o f hi s frau du le nt

tra ns act io ns was un kn own

. The di st ric t co ur t ul ti m at el y ad op te d th e PSR's on e-d ay

m et ho d to de te rm in e res t i tu ti on , ho wev er, be cau se Bu ng e's lo ss es wou ld be

un de res ti mat ed us in g ei th er th e on e- or two -d ay m et ho d ba se d on th e CBOT hi gh

pr ic e of th e d ay . Und er t he on e-d ay m et ho d o f cal cu la ti on , th e di st ric t cou rt set th e

am ou nt of B un ge 's l os s fo r res ti tu ti on pu rp os es at $ 1,4 73 ,98 0.0 0.

Bu ng e al so so ug ht res ti tu ti on fo r th e at to rn ey 's fees it pa id to ou ts id e co un se l

pr io r to an d du rin g th e go ve rn m en t's in ve st ig at io n. Carp en te r ob jecte d to th e

at to rn ey 's fees arg ui ng , in pa rt, th at fees in c u r r e d aft er th e go ve rn m en t st art ed it s

in ve st ig at io n were no t "n eces sa ry ." See 18 U

. S

. C

. § 36 63 A(b )(4 ) ("Th e or de r of

res ti tu ti on sh al l req ui re th at su ch de fen da nt —i n an y cas e, rei m bu rs e th e vi ct im fo r

. . . ne c e s sa ry

. . . ex pe ns es in cu rred du rin g pa rti ci pa ti on in th e in ve st ig at io n or

pr os ecu ti on of th e of

f e ns e."). The di st ric t co ur t rev ie wed th e bi ll in g st at em en ts

pr ov id ed by Bu ng e's co un se l an d th en award ed 9 0 % o f th e cl ai m ed fees , r efl ect in g

a 10 % red uc ti on fo r sp eci fic f e es as so ci at ed wit h a pr es s rel eas e, rep ro du ct io n
ch arg es , pu ni ti ve da m ag es is su es , co rres po nd en ce, an d co ur ie r se rv ic e s , t o whi ch
Carp en te r ha d al so ob

jecte d. Afte r th e red uc ti on , th e fees an d as so ci at ed ex pe ns es

to ta le d $8 7,5 36 .65

. In cl ud in g th e at to rn ey 's fees

, th e to ta l res ti tu ti on th e di st ric t co ur t

award ed to Bu ng e was $1 ,56 1,5 16 .25

. Bu ng e fil ed th is ti m el y ap pe al ch al le ng in g th e

am ou nt of r es ti tu ti on

.

II

W e rev ie w th e di st ric t co ur t's de ci si on to award res ti tu ti on f o r ab us e of

di sc ret io n, bu t an y fact fin di ng s as to th e am ou nt are rev ie wed fo r cl ear erro r. Uni te d

St at es v. Chal up ni k, 51 4 F.3d 74 8, 75 2 (8t h Ci r. 20 08 ). "Th e go ve rn m en t be ars th e
bu rd en of pr ov in g th e am ou nt of res ti tu ti on b a s ed on a pr ep on de ran ce of th e

ev id en ce." Uni te d S ta te s v . Frazi er, 6 51 F.3d 89 9, 9 03 (8t h C ir. 2 01 1)

.

-5

-A. The Over pa y m en ts

Carp en te r co nt en ds th e di st ric t co ur t erre d i n award in g th e in it ia l

$ 1 ,47 3,9 80 .00 in res ti tu ti on (th e am ou nt le ss th e at to rn ey 's fees ) fo r two reas o n s

. Fi rs t, Carp en te r co nt en ds th e am ou nt of res ti tu ti on is di ffi cu lt , i f no t im po ss ib le , t o
de te rm in e an d is no t warra nt ed

. See 18 U.S.C. § 36 63 A(c)(3 )(B) ("Th is se ct io n sh al l

no t ap pl y

. . . if th e co ur t fin ds

. . . th at de te rm in in g co m pl ex is su es of fact rel at ed to

th e

. . . am ou nt of th e vi ct im 's lo ss es wou ld c o mpli cat e or pr ol on g th e se nt en ci ng

pr oc es s to a de gr ee th at th e ne ed to pr ov id e res ti tu ti on to an y vi ct im is o u t w e i g h ed
by th e bu rd en on th e se nt en ci ng pr oc es s" ). Seco nd

, Carp en te r arg ue s th at Bu ng e di d

no t su st ai n a lo ss be cau se Bu ng e fact or ed in hi s ov erp ay m en ts whe n it ul ti m at el y so ld

th e co m m od it ie s h e p ur ch as ed

.

W it h res pe ct to Carp en te r's fir st arg um en t, we ha ve co ns is te nt ly he ld th at "t he

di st ric t co ur t ha s wid e di sc ret io n in or de rin g res ti tu ti on ." Uni te d St at es v. DeRo si er,

50 1 F.3 d 88 8, 89 7 (8 th Ci r. 20 07 ). W he n de te rm in in g res ti tu ti on , "t he di st ric t co ur t

ne ed m ak e on ly a reas on ab le es ti m at e of th e lo ss , an d we acco rd pa rti cu la r de fere nc e

to t h e lo ss de te rm in at io n be cau se of th e di st ric t co ur t's un iq ue ab il it y to as se ss th e

ev id en ce an d es ti m at e th e lo ss ." Id

. at 89 5 (q uo ti ng Uni te d St at es v. Sco tt

, 44 8 F.3 d

10 40

, 10 44 (8 th Ci r. 20 06 )). In cas es whe re th e am ou nt of lo ss (an d by ex te ns io n th e

a mo u n t of res ti tu ti on ) cau se d by frau d is di ffi cu lt to cal cu la te

, "a di st ric t co ur t is

ch arg ed on ly wit h m ak in g a reas on ab le es ti m at e of th e lo ss ." Uni te d St at es v. Pari sh

, 56 5 F .3d 52 8, 5 34 (8t h C ir. 2 00 9) (in te rn al qu ot at io n m ark s an d c it at io n o m it te d)

.

Carp en te r's cl ai m th at th e lo ss was im po ss ib le to cal cu la te is be li ed by hi s own
ad m is si on in th e pl ea ag reem en t th at hi s frau d sc he m e res ul te d in " a p p r ox im at el y $9 37 ,00 0" in ov erp ay m en ts by Bun ge to va rio us cu st om ers us in g th e go ve rn m en t's

m or e co ns erv at iv e two -d ay CBOT hig h pri ce m et ho d o f cal cu la ti ng th e lo ss

. Thu s,

th e real is su e pr es en te d in th is ap pe al is li m it ed to whe th er th e di st ric t co ur t erre d by

ch oo si ng th e on e-d ay m et ho d ov er t h e two -d ay m et ho d whe n cal cu la ti ng lo ss an d

res ti tu ti on

. The two -d ay m et ho d as su m ed th at so m e of Ca r p e n t e r 's frau du le nt

-6

-t r a n s a c t i o n s were act ua ll y ag reed to at th e hi gh pr ic e of on e da y , bu t du e to

ad m in is tra ti ve de la y s at th e Hick m an faci li ty, m ay no t ha ve be en co m pl et ed un ti l th e

ne xt da y

. Usi ng th is m et ho d, th e h i g h e s t pr ic e ov er an y gi ve n two -d ay pe rio d was

us ed to co m

pu te lo ss

. In co nt ras t, th e on e-d ay m et ho d us ed th e CBOT hi gh pr ic e of

th e da y a co m

m od it y pu rch as e was m ad e. Carp en te r ob jects to th e di st ric t co ur t's us e

of th e on e-d ay m et ho d be cau se it res ul te d in a hi gh er lo ss th an th at cal cu la te d un de r

th e two -d ay

m et ho d.

W e se e no gr ou nd s fo r rev ers in g th e di st ric t co ur t's de ci si on to ch oo se th e on eda y m et ho d ov er th e two -d ay m et ho d. As we pr ev io us ly st at ed

, ex act pr eci si on is no t

ne ces sa ry whe n de t e r mi n i ng lo ss , on ly a reas on ab le es ti m at e. Eit he r m et ho d th e
di st ric t co ur t wou ld ha ve ch os en he re wou ld ha ve be en reas on ab le

, as bo th m et ho ds

un de res ti m at ed Bu ng e's act ua l lo ss

. The ti m es whe n C arp en te r m ad e u na ut ho riz ed

tra nsac tio ns oc cu

rr ed thr ou gh ou t each da y , no t ne ces sa ril y ev ery ti m e th e CBOT pr ic e

was at it s hi gh es t. Fo r ex am pl e, in th e Aug us t 20 13 pu rch as e of co rn di sc us se d

ab ov e, th e CBOT cu rren t fu tu res pr ic e pr ov id ed to Carp en te r at th e ti m e of sa le was $4 .90 75

, whi le th e hi gh es t pr ic e pa id on th e CBOT th at da y fo r co rn was $4 .99 75

, a
di ffer en ce of $.0 9 pe r bu sh el

, or a to ta l of $5 40 0 fo r th e 60 ,00 0 bu sh el sa le

. The on eda y m et ho d us ed by th e di st ric t co ur t di d no t cap tu re th e ad di ti on al $5 40 0 Bu ng e lo st

on th is pa rti cu la r sa le (as refl ect ed in th e PSR at ¶ 20

, whi ch on ly rep or te d a lo ss of

$3 7,9 50 on th is pa rti cu la r t r a n s a c ti on rat he r th an th e $4 3,3 50 Bu ng e act ua ll y lo st ),

or th e si m il ar am ou nt s Bu ng e lo st on Carp en te r's m an y ot he r frau du le nt tra ns act io ns

. Bec au se th e ex act ti m es of th e un au th or iz ed tra de s co ul d no t be de te rm in ed

, th e us e

of th e CBOT da il y hi gh pr ic e au to m at ic al ly ens ur ed th at Bu ng e's act ua l lo ss wou ld

be un de res ti m at ed un de r bo th m et ho ds of c al cu la ti on

.

Carp en te r ne xt arg ue s th at Bu ng e di d no t su st ai n a lo ss (an d by ex te ns io n was

no t en ti tl ed to res ti tu ti on ) be cau se Bu ng e rec ou pe d h is ov erp ay m en ts at t he ti m e o f

it s sa le

. The di st ric t co ur t us ed th e co rrec t st an da rd of lo st pr of it s to de te rm in e

Bu ng e's lo ss

. See Uni te d St at es v. Ch al up ni k, 51 4 F.3 d 74 8, 75 5 (8 th Ci r. 20 08 ).

-7

-Here, Bu ng e's lo st pr of it s were ba se d on th e di ffer en ce be twee n t h e a u th or iz ed

p u r c h a s e pr ic e an d th e am ou nt of Carp en te r's un au th or iz ed pu rch as es

. The lo s t

pr of it s rem ai ne d co ns ta nt reg ard le ss of th e res al e pr ic e. Fi na ll y , Bu ng e do es no t ha ve

ex cl us iv e co nt ro l ov er th e sa le pr ic e as Carp en te r se em s to co nt en d. The

co m m od it ie s m ark et is a gl ob al m ark et th at di ct at es th e sa le pr ic e. The di st ric t co ur t

pr op erl y de te rm in ed th at th e lo ss su st ai ne d by Bu ng e was th e t o t a l a mou nt of lo st

pr of it s an d t ha t t he lo st pro fit s re m ai n c on st an t re ga rd le ss of t he sal e p ric e.

B. The Att or ne y 's Fe es

Carp en te r co nt en ds t h a t at to rn ey 's fees in cu rred by Bu ng e's ou ts id e co un se l

a f te r th e go ve rn m en t to ok ov er th e in ve st ig at io n were no t "n eces sa ry " u n d e r 1 8

U.S.C. § 36 63 A(b )(4 ). Carp en te r rel ie s pr im ari ly up on Uni te d St at es v. Pap ag no , 63 9

F.3 d 10 93 (D. C

. C i r

. 2 01 1)

, whi ch rev ers ed a res ti tu ti on or de r award in g ex pe ns es

in cu rred by a vi ct im du rin g it s own in te rn al in ve st ig at io n o f an em pl oyee's frau d

w h e r e th ere was no ev id en ce th e in ve st ig at io n was ev er req ue st ed by cri m in a l

in ve st ig at or s or pr os ecu to rs , ho ld in g th at un de r th os e ci rcu m st an ces th e vi ct i m 's

'" pa rt ic ip at io n in th e in ve st ig at io n or pr os ecu ti on of th e of fen se '" was no t

'"n eces sa ry .'" Id . at 1 09 5 (q uo ti ng 18 U.S.C. § 3 66 3A( b) (4 )).

Our ci rcu it ha s ta ke n a so m ewh at br oa de r vi ew of th e lo ss th at can be in cl ud ed

in a res ti tu ti on award

, an d ha ve "s pe ci fic al ly ap pr ov ed of th e in cl us io n of at to rn ey 's

fees an d in ve st ig at iv e co st s in a res ti tu ti on award whe n th es e lo ss es were cau se d by

th e frau du le nt co nd uc t." DeRo si er, 50 1 F.3 d at 89 7 (ci ti ng Uni te d St at es v. Akb an i,

15 1 F

. 3d 77 4, 78 0 (8 th Ci r. 19 98 ); Uni te d St at es v. Pi gg ie

, 30 3 F.3 d 92 3, 92 8 (8 th

Ci r. 20 02 )). As Carp en te r co nt en ds

, ho wev er, t h e f a c t t h a t th ere is no pe r se

pr oh ib it io n on award in g res ti tu ti on fo r at to rn ey 's fees or in ve st ig at iv e co st s do es no t

rel ie ve t h e g o v ern m en t fro m sa ti sf y in g th e st at ut or y req ui rem en t of sh owi ng su ch

co st s were "n eces sa ry

. . . ex pe ns es in cu rred du rin g pa rti ci pa ti on in th e in ve st ig at io n

or pro se cu ti on of t he off

en se ." 1 8 U.S.C. § 36 63 A(b )(4 ).

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-Carp en te r's sp eci fic ob jecti on i n t h e di st ric t co ur t was th at ou ts id e at to rn ey 's

fees in cu rred by Bu ng e aft er th e go ve rn m e n t i n i t i a te d it s own in ve st ig at io n were

un ne ces sa ry

. The reco rd do es no t sh ow th e di st ric t co ur t ev er di rect ly ad dr es se d th at

cl ai m , or m ad e a s p e c i f

ic fin di ng th at th e fees were ne ces sa ry

. In st ead

, th e di st ric t

co u r t o n ly ap pe ars to ha ve ad dr es se d Carp en te r's ot he r ob jecti on s to th e at to rn ey 's

fees su bm it te d by ou ts id e co un se l. W e th eref or e va cat e th e di st ric t co ur t's award of

at to rn ey 's fe es an d e xp en se s an d re m an d t o t he di st ric t co ur t to sp eci fic al ly ad dr es s
whe th er th e at to rn ey 's fees in cu r r e d aft er th e go ve rn m en t in it ia te d it s own

in ve st ig at io n were "n eces sa ry " un de r § 36 63 A(b )(4 ). If th e di st ric t co ur t de te rm in es

th at an y po rti on of t he fees were no t "ne ces sa ry ," th os e fee s s ho ul d n ot be in cl ud ed

in th e res ti tu ti on award

. 2

III

W e affi rm th at po rti on of th e di st ric t co ur t's res ti tu t i o n o rd er award in g $1 ,47 3,9 80 .00

. W e va cat e th e po rti on of th e di st ric t co ur t's res ti tu ti on or de r award in g

at to rn ey 's fe es an d re m an d fo r fu rth er p ro ceed in gs co ns is te nt wit h t hi s o pi ni on

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

If read li be ral ly, Carp en te r's ob jecti on to th e at to rn ey 's fees in th e di st ric t co ur t 2

al so rai se d a cl ai m th at he sh ou ld be en ti tl ed to a "s et of f" fro m th e to ta l am ou nt of

res ti tu ti on award ed if Bu ng e's in su r a n ce co m pa ny pa y s fo r an y cl ai m rel at ed to Carp en te r's frau du le nt co nd uc t. To th e ex te nt Carp en te r ren ews th at cl ai m on ap pe al

,
we reject it

. Wh e n a n i n su rer m ak es pa y m en ts fo r a vi ct im 's lo ss , a de fen da nt is

req ui red to pa y res ti tu ti on ba ck to th e in su ran ce pr ov id e r u n d er th e Man da to ry Vict im s Res ti tu ti on Act, an d is no t en ti tl ed to a se t of f. Uni te d St at es v. Man ci ni

, 62 4
F.3 d 8 79 , 88 2 (8 th Cir . 20 10 ).

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-