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Uni ted Sta tes v . T hompson UNITED STATES COURTOF APPEAL S F O R T H E S E C O N D C IR C U IT August Term, 2014 (Argued: Apr il14, 2015 Decided: July 13, 2015)

Docket No. 14-2631- cr

U N I T E D S T A T E S O F A M E R I C A , Appellee,

— v. — J A M I E G E N E T H O M P S O N , AKA Jamie P. Thompson, AKA Jami e G. Thompson, AKA Payton Thompson,

Defendant-Appellant

. *

B e f o r e : C A B R A N E S , L Y N C H , and D R O N E Y , Circuit Judges

.

__________________

The Clerk is r espe ctfull y requested to amend the caption to conform to the * caption above.Defe ndant Jamie Gene Thompson appeals from a judgment of the United

States District Court for the District of Vermont sen tencing him, as relevant to this appeal, to pay restituti on both to his victi ms and to third-party providers of compensation for losses arising from his fraudulent acti viti es. Thompson ar gues that the district court erred b y fail ing to reduce his liabil ity t o the third-party providers of compensation by the value of prope rty that he retur ned to his victi ms, thus order ing himto pay more in restituti on than he actually stol e and failed to return. Because the Mandatory Victi ms Restitut ion Act caps a defendan t’s restitution l iabil ity at the amount of his victims’ actu al l osses , net of any prope rty the defe ndant return ed to the victim s, and be cause pro viders of compensation do not qual ify as “vict ims” so as to expand the de fendant’s liabil ity under the Act, the district court erred in orde ring Thompson to pay more than the amount of his vict ims’ net losses. V A C A T E D A N D R E M A N D E D .

B A R C L A Y T. J O H N S O N , Resear ch & Writing Att orney (S teven L. Barth, Assistant Federal Public Defender , on the brief ), forMichael L. Des autels, Federal Public Defender , District of Vermont, Burlington, Vermont, for Defendant-AppellantJamie G ene Thompson.

2G R E G O R Y L. W A P L E S , Assistant United States Attorney (Paul J. Van de Graaf, Assistant United States Attorney, on the brief ), for Tristram J. Coffin, United States Attorney for the Di strict of Vermont, Burlington, Vermont.

G E R A R D E. L Y N C H , Circuit Judge : Defe ndant Jamie Gene Thompson appeals from a judgment of the district court senten cing him, as relevant to this appeal, to pay restitution under the Mandatory Victi ms Restitut ion Act (“MVRA”), 18 U.S.C. § 3663A, for losses incurred thr ough his fraudulent mi suse of his victim s’ bank and cr edit accounts. Prior to his convicti on, Thompson re turned a por tion of the stolen funds to his victi ms, and the victim s’ banks r eimbursed anothe r subs tantialportion of the stolen funds, ulti mately l eaving the victi ms with more than they had lost through Thompson’s crimes. In calculat ing Thompson’s restituti on obligati on, the district court found that the funds re turned by Thompson b elonged solely to the victi ms and could not offset Thompson’s liabil ity t o the banks f or the value of their reimbursements, e ffectively ordering Thompson to pay more in combined restitution to the banks and the victim s than he s tole, net of what he return ed.

3Because the MVRA li mit s a defen dant’s res titution am ount to the actual

losses suffe red b y his victi ms, and because third-party providers of compensation do not qual ify as “vict ims” whose losses may expan d the defendan t’s restitution l iabil ity, the district court erre d in ordering Thompson to pay more in res titution than the vict ims’ actu al l osses . Accordingly, we vacate the district court’s restituti on order and remand for recalculati on. BACKGROUND I. The Fraud Jamie G ene Thompson h as an ex tensive criminalrecor d that incl udes at least twelve convicti ons for fr aud- and theft-related crimes. In 2008, Thompson began to work as a home-care attendan t for Liddell and Alber t Eardensoh n, whom he had known for some tim e through his past se rvices caring for Liddell ’s father. Although the Earde nsohns knew of Thompson’s cr iminal history, they welcomed himinto their home, entrusting him w ith their financi al records an d eventually m oving himinto the house as a live-in caretaker. In October 2012, after Thompson flew to California on what he clai med was a famil y visit

, Liddelldiscovered n umerous discrepan cies in the Eardens ohns’ financial records . She r etained an attorney to help investigate the

4inconsistencies and re coup any missing funds. The investigati on ulti mately

reve aled that Thompson had mi sapprop riated tens of thousands of dollars from the Earde nsohns . That fraudulent acti vity included unauthorized withdrawals from the Earde nsohns ’ investment account at Well s Fargo, unauthorized che cks cashed against their che cking account at TD Bank, and fraudulent charges on their Citibank credit card. After the fr aud was discovered, Thompsonwrote the Ear densohn s a ser ies of letters confe ssing and apologizi ng for his crimes. In one letter, h e promised to send $30,000 to cover his withdrawals from the Well s Fargo investment account, begging Liddellnot to “press charges against [him ]” because he was “doing

ever ything to m ake this wrong a right to you.” Thompson subsequently sent a check for $30,000, as well as a second che ck for $400 “towards the [credit card] charges [he] made.” Both che cks were deposited into a restituti on account in the Eardens ohns’ names. The Earde nsohns ’ attorney subs equently convinced Well s Fargo to reimburse r oughly three-fourths o f Thompson’s unauthorized withdrawals from the Earde nsohns ’ investment account. Citibank also forgave the fullamount of Thompson’s unauthorized char ges on the Ear densons ’ credit card.

5II. Procedural History

On October 13, 2013, Thompson pleaded guilty to a one-count indictm ent charging him wi th access de vice fraud in viol ation of 18 U.S.C. § 1029(a)(2). As part of the plea agre ement, he agre ed to pay res titution to the Earde nsohns for all losses r esulting from hi s crime. At the sentenc ing hearing, the parties calculated the totalamount of Thompson’s thefts at $65,143.47, comprising $46,308.47 stolen from the Eardens ohns’ Wells Fargo investment account, $1,815.50 cashed f rom their TD Bank checking account, $9,516.50 charge d to their Citibank card, and $7,503 in compensable attorne ys’ fees . Because We ll s Fargo and C itibank had r eimbursed the Earde nsohns for some of those losses, and b ecause in such circumstances a defendan t should pay restituti on directly to the reimburser s, see 18 U.S.C. § 3664(j)(1), Thompson owed portions of that sum (setting aside any credit for the amount repaid to the Eardensoh ns) to three different par ties: $21,859 to the Eardens ohns, r eflecting the attorneys’ fee s, TD Bank che cks, and unre imbursed Wells Fargo withdrawals; $9,516.50 to Cit ibank, reflecting the forgiven cr edit card charges ; and $33,767.97 to Wells Fargo, reflecting the reimburse d withdrawals. The parties also agre ed that Thompson’s re payments of $30,400 to the

6Eardens ohns sh ould be offset against his restitution obli gation. However, they

disagreed ab out how to apply that $30,400. Thompson argued that it should be subtracted fr om his totalrestitution am ount, leaving hi m wi th an outstanding obligati on of $34,743.47, to be distributed as appr opriate among the Earden sohns and the banks . To the extent that the $30,400 he had paid the Eardens ohns and the amounts that the banks had r epaid to them exceede d their losses, and left the banks unde r-compensate d, Thompson propos ed that the Earde nsohns be instructed to remit to the banks any exce ss monies re ceived from Thompson. By contrast, the gover nment urged that the $30,400, which had be en se nt directly to the Eardensohn s, could be used only to satisfy Thompson’s remaining obligati on to the Earde nsohns , not his debts to either of the banks. By that calcul ation, Thom pson would need to make no furthe r payments to the Eardens ohns, whos e losses of $21,859, h ad been full y satisfied by Thompson’s check payments, but would stil l have to pay Wells Fargo and Citibank $43,284.47 in restituti on. The district court (J. Garvan Murtha, Judge ) adopted the gover nment’s position. Judge Murtha di d not dispute that crediti ng the full $30,400 agai nst Thompson’s $21,859 debt to the Ear densohn s would effectively l eave them with

7$8,541 more than they had initial ly l ost. Never theless, he concluded that this

outcome woul d not constitute an unfair “wi ndfall” because Thompson had se nt the money to the Earde nsohns “voluntaril y,” maki ng those funds the Eardens ohns’ pr operty to dispose of as they wished. J. App’x at 63. Judge Murtha also suggested that any additi onal benefit accruing to the Earden sohns was not inequi table under the circumstances , since they had “ex perience d not only monetary expen ses b ut . . . also . . . had to suffer through the pr ocess of trying to undo everything that Mr. Thompson did to them.” I d. Judge Murtha thus order ed Thompson to pay a total of $65,143.47 i n restitution, wi th $21,859 for the Ear densohn s, $33,767.97 for We ll s Fargo, and $9,516.50 for C itibank, with the further adde ndum that Thom son’s de bt of $21,859 to the Eardens ohns was de emed satisfied in ful l by his earlier payments. That order left Thompson owing an additional$43,284.47 to Wells Fargo and Citibank, which, combi ned with his $30,400 in check payments to the Eardens ohns, would result in Thompson having to pay $8,541 m ore than h e originall y stole. 1 Thompson was also senten ced to 30 months’ imprisonment, to be foll owed by a 1 three- year ter m of supervised r elease. He does not challenge those portions of the judgment. 8Thompson appeals, arguing, inter alia , that the district court i mproperly

treated the b anks as “victim s” pursuant to the gover ning restituti on statute and thus err ed by failing t o offset the r estituti on due to the banks by the amount Thompson had re paid to the Eardensoh ns. DISCUSSION We gene rally review a district court’s orde r of re stitut ion “for abuse of discretion,” reve rsing its ruling only if i t “rests on anerr or of law, a clearly

err oneous finding of fact, or other wise cannot be located within the range of permissible decisions.” United States v. Boccagna, 450 F.3d 107, 113 (2d C ir. 2006) (internal quot ation marks omi tted). When a defe ndant’s challenge to a restitution order raises an issue of law, we review that challenge de novo . United States v. Reifler, 446 F.3d 65, 120 (2d Cir. 2006). The Mandatory Victim s Restituti on Act (“MVRA”), 18 U.S.C. § 3663A, is one of se veral feder al statut es empower ing courts to im pose r estituti on obligati ons on cr iminal defendants. S upplementing an earlier statute that al lows courts to impose discretionary orde rs of r estituti on, see id. § 3663, the MVRA makes res titution m andatory for ce rtain categories of crimes that infli ct physical injury or proper ty loss on their victi ms, see id. § 3663A(a). It im poses that

9requirement through two statutory components: a substantive provision codified

at 18 U.S.C. § 3663A, and a pr ocedural provision codified at 18 U.S.C. § 3664 and incorporated into the MVRA at 18 U.S.C. § 3663A(d). Section 3663A, the subs tantive component, provides that a district court “sentenc ing a defendant convicted of an offen se des cribed in subse ction (c) . . . shall order . . . that the defe ndant make restituti on to the victimof the offens e.” Id. § 3663A(a)(1). As that languag e suggests, “[o] nly a ‘vict im’ (or the victi m’s estate) is entitled to restitut ion” under the MVRA. United States v. Maynard, 743 F.3d 374, 378 (2d Cir. 2014). A “victim ” for the pur poses o f the statute is “a pers on directly and proximately harmed as a res ult of the commission of an offense for which re stitut ion may be order ed.” 18 U.S.C . § 3663A(a)(2). In restr icti ng its definit ion of “victi m” to persons p roximately harmed by the defendan t’s acts, the MVRA aim s to lim it restitut ion to those harms that “ha[ve] a sufficientl y close connection to the conduct at issue.” Rober s v. United States, 134 S. Ct. 1854, 1859 (2014) (intern al q uotati on marks omitt ed). Accordingly, we have recognized that § 3663A(a)(2)’s de finit ion of “victi m” governs “the calculation of [the] re imbursable loss” itself. Maynard, 743 F.3d at 378; see also United States v. Gushlak, 728 F.3d 184, 194-95 (2d Cir. 2013).

10In addit ion to defining t he categor y of reimbursable victims, § 3663A provides a for mul a for calculati ng a defend ant’s res titution am ount. See 18 U.S.C. § 3663A(b ). The “primary and over arching goal of the MVRA is to m ake victi ms of crime whole”: to “compensate these victims for their losses and to restor e the[m] to their original stat e of well-being.” United States v. Qurashi, 634 F.3d 699, 703 (2d Cir. 2011) (internal quotati on marks omitt ed). To fulfil l thi s objective without

“award[ing] the victima windfall, i.e., more in restituti on than he actually l ost,” the MVRA caps the re stitut ion award at the actual “am ount of the victim ’s loss.” Boccagna, 450 F.3d at 117 (internal quotat ion marks omi tted); see also United States v. C oriaty, 300 F.3d 244, 252 (2d Cir. 2002) (“Unlike loss calcul ations, a court’s power to or der r estituti on is li mit ed to actual l oss.”) (internal quot ation marks omi tted). In the case of offen ses involving monetary loss, that amount equals “the greater o f . . . the value of the prope rty on the date of the damage, loss, or des truction; or . . . the value of the prope rty on the date of sentenc ing, less . . . the value (as of the date the pr operty is re turned) of any par t of the prope rty that is returned.” 18 U.S .C. § 3663A(b)(1)( B). As to procedur e, the MVRA provides that any re stitut ion orders imposed under the Act must “be issued and enfor ced in accordance with section 3664.”

11Id. § 3663A(d). We have e mphasized that § 3664 is “procedural rather than 2 substantive,” Maynard, 743 F.3d at 379, ser ving not to i mpose any independ ent restitution obli gations on a defendant but simply to set the “procedure s by which the sente ncing court im poses [ the] re stitut ion order” calculated under § 3663A, id. at 378 (i nternal quotati on marks omitt ed). In Maynard, we sp ecifical ly rejected the argument that 18 U.S.C. § 3664(f)(1)(A), which r equires a district court to “order restitution to each victim in the full am ount of each victim ’s losses” without regard to a defe ndant’s finances, trumped § 3663A’s restr icti ons on the categories of “losses” that are compensable unde r the MVRA. Id. at 378- 79. Agreeing with the Ninth Circuit’s holdi ng that “§ 3664 cannot trump [the] substantive res titution provisions because it is only a procedural mechanism,” id. at 379, citing United States v. Cliatt, 338 F.3d 1089, 1093 (9th Cir. 2003), we r uled that the scope of a de fendant’s r estituti on obligati on under the MVRA is l imi ted by the pr ovisions of § 3663A it self. See id. at 378 (hol ding that “expense s other

Section 3664 also governs the admini stration of other r estituti on statutes, most 2 notably the Victi m and Witness Pr otection Act (“VWPA”), 18 U.S.C. § 3663. See id. § 3663(d). 12than those en umerated in § 3663A(b) are [not] compensable unde r the MVRA”). 3

Section 3664 thus merely sets out pro cedures to be followed, incl uding in circumstances wher e, as he re, a victim receives reimburse ment for his or he r losses fr om a third party prior to entry of a re stitut ion order. First, § 3664(f)(1)(B) explains that such third-party compensation is irrelevant to a district court’s calcul ation of the defendant’s total restituti on liabil ity, providi ng that “[i]n no case sh allthe fact that a victi m has rece ived or is entitl ed to rece ive compensation with respect to a loss from insurance or any other source b e consider ed in determining the amount of restitut ion.” 18 U.S.C. § 3664(f)(1)(B). S econd, § 3664(j)(1) provides that, where a third party has assumed the victim’s l osses by reimbursing the victim, the court must order a de fendant to pay re stitut ion directly to that

third party: “If a vict im has received compensation from insurance or any other s ource with resp ect to a loss, the court shall order that restitution be paid to the person who p rovided or is obligated to provide the Notably, § 3664(f)(1)(A) itself does not provide any guidance for de termining a 3 defendan t’s restitution am ount, but rather as sumes that the court has already determined that amount i ndepen dently. See 18 U.S .C. § 3664(f)(1)(A) (“In each order of res titution, the court shall order res titution to each vict im in the full amount of each victi m’s losses as dete rmined by the court and without consideration of the econ omic ci rcumstances of the defendan t.”). In the case of the MVRA, that determinati on is governe d by § 3663A(b). 13compensation . . . .” Id. § 3664(j)(1). Any funds stil l owed to the originalvicti m,

however , must be repaid in fullbefor e any payments may be diverted to a third-party provider of co mpensation. See id. (“[T]he r estituti on order shall provide that all restitution of vi ctim s required by the order be paid to the victim s befor e any re stitut ion is paid t o such a provider of compensation.”). As both the language and str ucture of the MVRA suggest, the third-par ty providers of compensation discussed in § 3664 are n ot equi valent to “vi ctim s” under the Act. Although the MVRA defines the cate gory of “victim s” eligible to

rece ive restituti on in the substantive provisions of § 3663A, se e 18 U.S.C

. § 3663A(a)(2), it refers to third-party providers of c ompensation only in the procedur al provisions of § 3664, see id. §§ 3664(f)(1)(B), (j)(1). Further more, § 3664 expr essly distingui shes b etween “victims” and providers of compens ation. Far from equating a provider of compensation with a “vi ctim ” under § 3663A(a)(2), § 3664(j)(1) clarifi es that “victim s” occupy a privileged place in the statutory scheme, demanding that allvicti ms be satisfied in fullbefor e any payments are made to pr oviders of compens ation. See id. § 3664(j)(1). Respecting that difference , both this court and our sister Circuits have consistently disti nguished betwee n the victim s of a crime under the MVRA and

14providers of compensation. See , e.g., United States v. Cuti, 778 F.3d 83, 92 (2d

Cir. 2015) (holding that § 3664(j)(1) permit s res titution di rectly to a “third party” where that “third party has . . . paid an expe nse incurr ed by the victim”); Cli att, 338 F.3d at 1092 (“Under § 3664, the cour t must order re stitut ion to be paid directly to an i nsure r . . . if there is a ‘victim ’ withi n the meaning of the MVRA and if the third party compensated the victim for some or all of the vict im’s loss.”); United States v. She pard, 269 F.3d 884, 886 (7th Cir. 2001) (h olding that a third party that settled vict im’s l osses was not “the victimof this crime”). Because third-par ty providers of compen sation are not themselves “victi ms” for the purp oses of the MVRA, any losses suffer ed by those parties in the course of compensating a victi m cannot increase a district court’s calculat ion of the defe ndant’s re stitut ion oblig ations under § 3663A(b). Indee d, § 3664 expr essly provides that a third party’s compen satory payments should notaffect the deter minat ion of the res titution am ount. See 18 U.S .C. § 3664(f)(1)(B). Rather, wher e a third party has alre ady reimbursed the victi m’s losses, § 3664(j)(1) simpl y shifts paymentof the re stitut ion amount cal culated under § 3663A(b) directly to that party. See United States v. Fr azier, 651 F.3d 899, 906 (8th Cir. 2011) (“[T]he compen sation provided by a third party merely shifts the

15payment of a portion of the re stitut ion to that third party for

reimbursement . . . .”). Accordingly, we have re cognized that any restituti on paid by a defendan t to a third party insurer cann ot excee d the amount the defendant could lawful ly be or dere d to pay the original vi ctim . In United States v. Gol omb, a district court order ed a defe ndant convicted of transpor ting stol en che cks to pay his victi m $80,909 in restituti on, but failed to consider that the victi m’s bank was likely already in the proce ss of compens ating i ts loss. See 811 F.2d 787, 791-92 (2d Cir. 1987). In li ght of the victi m’s im minent reimbursement from a third-party source , we held that the district court’s “restituti on order should be modified to provide that if the [victim ] has be en compens ated in fullor in party by [the] Ban k, then Golomb shall pay [the] Bank the amount [the bank] paid the [victim ] ( not to exceed $80,909 ).” Id. at 792 (emphasis added); see also Frazier , 651 F.3d at 906 (“[T]o

4

Golomb was decided b efore the passage of the MVRA and involved a 4 restitution award under the VWPA. Howeve r, be cause the “pr ovisions of the VWPA and the MVRA are ne arly identicalin authorizi ng an award of restitution,” we have recognized that past case law i nterpr eting one statute applies to parallelprovisions of the other . Cuti, 778 F.3d at 94 (i nternal quotati on marks omitt ed); see also Gushlak , 728 F.3d at 194 n.6 (“In setting forth the legal standards gove rning awards unde r the MVRA, we re ly al so on case s applying materiall y identicalprovisions of another feder al restituti on statute, the Victi m and Witness Protection Act, 18 U.S.C. § 3663.”). 16the exten t [the third parties] are f ound to have provided compens ation for the

[victi m’s] losses . . . , this amount does not increase the total am ount of the restitution order.”); Sh epard, 269 F.3d at 887 (“Although . . . the [provider of compensation under § 3664(j)(1)] be came subrogated to [the victim’s] rights against the [defendant], it obtained no entitlements other than those [ the victim ] had to convey, and that entitlement i s lim ited to what [the victim ] lost.”). In this case, Thompson defraude d the Earde nsohns of $65,143.47. He subse quentlyreturne d $30,400 of their lost proper ty. Under the plain text of § 3663A(b), his total restitut ion li abili ty under the MVRA is thus the value of the stolen prope rty ($65,143.47) minus the value of what he returne d to the victi ms ($30,400), equali ng $34,743.47. The fact that Wells Fargo and Citibank, as thirdparty providers of compensation, have already paid the Earde nsohns a cumul ative $43,284.47 – $8,541 more than what Thompson himself can be asked to pay – does not affect Thompson’s legal liabi li ty under the MVRA. The sole effect of that compensation is to divert payment of Thompson’s remaining obligati on, since the Ear densohn s have b een fully compensated by the b anks and Thompson’s re payments, from the Earde nsohns to the banks themse lves.

17The govern ment protests that deducting Thompson’s $30,400 re payment

from his remaining obli gations to Well s Fargo and C itibank willhave the anomalous effect of forcing the Earde nsohns to use their own funds to r epay the banks – a sc enario that both depr ives the Earde nsohns financial ly and viol ates § 3664’s provision that “[n]o victi m shallbe r equired to partici pate in any phase of a res titution order.” 18 U.S.C . § 3664(g)(1). In fact, it wil l do no such thing. As neither the Ear densohn s nor the banks ar e parties to the cr iminal proceeding, the government is corr ect that the district court l acks power to compel the Eardens ohns to pay any money to the ban ks. Whether the Earde nsohns have been unjustlyenriched b y rece ivi ng both re payments from Thompson and compensation from the banks is a question of state law, to be resolved, if the banks choo se to pursue the matter, by the state courts. To the extent that cre diti ng the full val ue of Thompson’s $30,400 payments to the Eardens ohns against his res titution am ount mi ght at some point result i n the Earde nsohns ’ having to repay Citibank or Wells Fargo some por tion of their prior re imbursements, that possibili ty does not unfairly force the Ear densohn s to compensate the b anks from their “own” pr operty. It simpl y corre cts for the banks’ initialoverpayment of the Ear densohn s in li ght of new information about

18the status of their missing funds. Nor does that possibili ty viol ate § 3664(g)(1)’s

admoniti on that a victi m may not be forced to “participate” in a restituti on order

. Where a victi m who has previously beencompensated by a third par ty for lost proper ty subsequently regains some portion of that prope rty, any duty she might have to return the insurer ’s money arises n ot as a “phase” of a r estituti on procee ding, but purely through the victim ’s own contractual or other relationship with the insurer . See , e.g., United States v. Andre ws, 600 F.3d 1167, 1173-74 (9th Cir. 2010) (C li fton, J., concurr ing) (“[U]nder [state] law, [a third-party provider of co mpensation] is entitl ed to rece ive the money it al ready paid the victi m . . . if and when he is reimburse d by defen dant . . . .”). Any dispute between the Eardens ohns and We ll s Fargo and C itibank about the ex tra $8,541 gained by the Earde nsohns and lost by the banks is a matter to be s ettled between those par ties or res olved under state law, and does n ot affect Thompson’s re stitut ion oblig ations under the MVRA. In short, bec ause a defe ndant’s re stitut ion li abili ty under the MVRA is capped at the actual loss incurred by his victims, and because third-party providers of compensation do not qual ify as “vict ims” whose losses can e xpand that restituti on amount, the district cou rt err ed in its restituti on calculation by

19failing to subtract the en tirety of Thompson’s previous payments to the

Eardens ohns fr om the amount due to hi s victim s. On re mand, Thompson’s restitution am ount should be lim ited to the $34,743.47 that remained of the Eardens ohns’ or igi nal losses after he returne d $30,400 of the stolen funds, to be divi ded pro r ata between We ll s Fargo and C itibank in propor tion to their compensation payments. CONCLUSION For the for egoing reason s, the district court’s judgment i s VACATED an d the case is REMAND ED to the district court for further procee dings.

20