In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

No. 13‐1349

UNITED STATES OF AMERICA,

Plaintiff‐Appellee,

v.

YAIR BERKOWITZ,

Defendant‐Appellant.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 09 CR 144 — Virginia M. Kendall, Judge.

____________________

ARGUED SEPTEMBER 25, 2013 — DECIDED OCTOBER 22, 2013

____________________

Before WOOD, Chief Judge, and FLAUM and SYKES, Circuit

Judges.

FLAUM, Circuit Judge. Yair Berkowitz, together with a host

of others, participated in a massive tax fraud scheme with

the object of filing false tax returns in the names of over 3,000

unknowing, incarcerated, or deceased people. The scheme

netted over $10 million in refund payments from the IRS and
2 No. 13‐1349

state tax agencies before it was discovered. Yair1 is the son of

the scheme’s mastermind, and was a player in the conspiracy

by 2003. He was arrested in 2009 and pleaded guilty to one

count of wire fraud in 2011. At sentencing, the district court

followed the Presentence Report’s (“PSR”) recommendation

and ordered Yair to pay more than $4 million in restitution

along with his prison sentence; his restitution liability was

joint and several along with his co‐defendants. Yair appeals

only the amount of the restitution award. We find the award

appropriate and affirm the district court.

I. Background

A. Facts

The Berkowitz family has had run‐ins with the IRS be‐

fore. Yair’s father, Marvin, has a long history of running

schemes to defraud state and federal tax authorities.2 His

sons and many other confederates have all been involved at

various points and in various capacities. Yair began partici‐

pating in his father’s exploits in 1999 or 2000. Yair acquired

the taxpayer information of dead people and used it to help

prepare fraudulent tax returns seeking refunds from the IRS.

In 2000, he traveled to Miami to get the same type of taxpay‐

er information for federal prisoners.  

The scheme prosecuted in this case began in 2003 and

was broken up in 2009. Fifty‐eight different individuals re‐

                                                  1 Several members of the Berkowitz family were involved in this tax

fraud scheme, so we refer to them by their first names.

2 In 2003, authorities learned of another of Marvin’s schemes and he

fled to Israel to avoid prosecution. Marvin, Yair’s brother Yehuda, and

several others were indicted for tax fraud conspiracy in that case.
No. 13‐1349 3

ceived federal or state refund checks as part of the conspira‐

cy. Participants in the fraud filed more than 3,000 false state

and federal tax returns claiming refunds. For his part, Yair

received pre‐addressed, pre‐stamped tax returns from

Marvin in Israel. Yair mailed the returns from various U.S.

postal codes so as not to arouse IRS suspicion. He controlled

accounts where the proceeds were deposited and addresses

where checks were mailed. When refund checks issued, Yair

traveled to various locations to pick them up from and make

cash payments to co‐conspirators. He would then mail the

checks to Marvin in Israel or otherwise disperse the pro‐

ceeds.

In 2006, IRS agents interviewed Yair and told him that

money he had received from Marvin was obtained by fraud.

Yair denied any knowledge of the scheme at this time. He

proceeded to ratchet down his direct involvement, as did the

dozen or so people he was directly controlling in the collec‐

tion of the fraudulent returns. But Yair continued to receive

money from Marvin and other co‐conspirators after 2006

and met with an undercover IRS agent about expanding the

fraud in early 2007. The scheme was eventually uncovered,

leading to the arrest of Yair (along with many co‐

conspirators) on August 3, 2009.

B. Procedural History

A grand jury returned a fifty‐one count indictment on

August 4, 2009, charging Yair, Marvin, and nine others with

conspiracy to defraud the IRS, wire fraud, and mail fraud.

Yair was named in several counts, but pleaded guilty only to

Count 51, wire fraud. The conduct alleged in this count was

a February 12, 2006 PayPal transfer of $250 from an account

in Chicago to a different account in Minneapolis. In the plea
4 No. 13‐1349

agreement, Yair accepted responsibility for his part in the

conspiracy and acknowledged his awareness of his father’s

fraudulent activities. The district court sentenced Yair to six‐

ty‐two months imprisonment, followed by two years of su‐

pervised release. Yair challenges neither of these punish‐

ments, only the $4,069,091.96 in restitution imposed by the

court.

The district court calculated the restitution award using

loss figures provided in the PSR. The Government argued

that the intended losses from the overall scheme were rough‐

ly $65 million and that the actual losses were around $10

million. But the PSR recommended—and the government

agreed—to narrow these amounts for Yair. The PSR conclud‐

ed that when the universe of losses was limited to the dozen

or so people that Yair interacted with or directed regularly in

the course of the scheme, the intended loss amount was

around $19 million and the actual loss $4,069,091.06.

Yair objected to these amounts at sentencing, both for the

purposes of calculating his offense level and for fixing the

restitution amount. He claimed that the loss amount was not

reasonably foreseeable to him, an argument which the dis‐

trict court rejected after weighing the arguments from both

sides. The court did not reweigh the evidence when it im‐

posed restitution, however, because the analysis would have

been duplicative of the calculations it already performed.

II. Discussion

Ordinarily, we would review the district court’s authority

to issue a restitution order de novo and its calculation of res‐

titution amount for abuse of discretion. United States v. Rand,

403 F.3d 489, 493 (7th Cir. 2005). But here we engage in the
No. 13‐1349 5

even more deferential plain‐error review. Yair’s objections in

the district court to the restitution award were nonspecific,

but his objections to loss amount (which should mirror the

objections to restitution in this case) argued only that the

numbers were too large because they included losses not

foreseeable to him. His arguments on appeal have a different

flavor: Yair now contends that the district court exceeded its

statutory authority in awarding restitution because the court

charged him for conduct not attributable to him, and be‐

cause it did not adequately demarcate the contours of the

scheme or make the necessary findings of fact connecting

Yair’s conduct to the loss. Because these arguments are dif‐

ferent from the one raised below, we will overturn the dis‐

trict court only if we find error that would deprive Yair of his

“substantial rights.” United States v. Randle, 324 F.3d 550, 555

(7th Cir. 2003).  

Federal courts enjoy no inherent power to order restitu‐

tion—they may only do so where authorized by statute. Id.

The relevant statute in this case is the Mandatory Victims

Restitution Act of 1996 (“MVRA”). 18 U.S.C. § 3663A. As the

name suggests, this law requires the district court to award

restitution in certain circumstances. Restitution under the

MVRA functions as a civil remedy “engraft[ed] ... onto a

criminal statute,” and is therefore calculated by looking sole‐

ly to the victim’s loss and not to the perpetrator’s ability to

pay. United States v. Martin, 195 F.3d 961, 968 (7th Cir. 1999).

The MVRA specifically defines the “victims” to whom

restitution must be made:

[A] person directly and proximately harmed as

a result of the commission of an offense for

which restitution may be ordered including, in
6 No. 13‐1349

the case of an offense that involves as an ele‐

ment a scheme, conspiracy, or pattern of crimi‐

nal activity, any person directly harmed by the

defendant’s criminal conduct in the course of

the scheme, conspiracy, or pattern.

§ 3663A(a)(2). Under certain circumstances, the government

can be a victim under the MVRA. United States v. Sapoznik,

161 F.3d 1117, 1121 (7th Cir. 1998).  

Yair contends that the restitution order is excessive. First,

he argues that it charges him for the conduct of others, in‐

stead of limiting the award to losses attributable to his spe‐

cific conduct in furtherance of the scheme. But notable in the

statutory language is the expansiveness of restitution au‐

thorized for crimes involving a “scheme, conspiracy, or pat‐

tern.” An individual convicted of such a crime is jointly and

severally liable for the losses caused by his or her co‐

conspirators. See, e.g., United States v. Dokich, 614 F.3d 314,

318 (7th Cir. 2010). For this reason, we have squarely rejected

the theory that co‐conspirator restitution liability under the

MVRA is as limited as Yair contends. Moreover, the PSR and

the district court limited Yair’s liability to losses resulting

from his actions and from the actions of those he controlled

or worked with regularly. Thus, the restitution order here is

linked to his specific participation in the scheme, even if we

were to accept Yair’s limited view of co‐conspirator restitu‐

tion liability.

Yair next argues that the district court’s restitution award

lacked statutory authority because the judge did not make

sufficient factual findings to support it. We disagree. It is

true that the court engaged in no protracted discussion of

restitution at sentencing and that it adopted the findings of
No. 13‐1349 7

the PSR. But Yair overlooks the court’s earlier discussion of

the same figures when it was calculating Yair’s offense level.  

In compiling a PSR for crimes causing a loss, the proba‐

tion office calculates both the intended loss and the actual

loss caused by the scheme, and offenders are sentenced to

imprisonment based on the greater of these amounts.3 The

district court pulled the restitution amount from the PSR’s

actual loss calculation. There is nothing untoward about do‐

ing so, and it was Yair’s burden to demonstrate the PSR’s un‐

reliability. United States v. Artley, 489 F.3d 813, 821 (7th Cir.

2007). Nor is it uncommon for the amount of the restitution

award to mirror actual loss. Dokich, 614 F.3d at 319–20 (not‐

ing that where a defendant intends a large amount of loss he

should be sentenced according to that amount but ordered

to pay restitution according to the actual loss). The district

court did not engage in a lengthy discussion of the restitu‐

tion order, but it was not required to do so, especially when

Yair did not raise any specific objections to the restitution

calculation at the time of sentencing. See United States v. Has‐

sebrock, 663 F.3d 906, 925 (7th Cir. 2011). We decline Yair’s in‐

vitation to impose a requirement on district courts to rehash

their offense level findings at the restitution phase where no

                                                  3 District courts can get into trouble if they rely unquestioningly on

these figures, however, because the loss amount for sentencing considers

not just the conduct underlying the conviction but “relevant conduct”

accompanying it. Calculations for restitution are not so permissive. Rand,

403 F.3d at 494. They are rigidly compartmentalized to the actual losses

resulting from the conduct of the convicted offenses. Hughey v. United

States, 495 U.S. 411, 422 (1990). At Yair’s sentencing, the district court

engaged in no such error; all losses are attributable to the scheme for

which Yair pleaded guilty.
8 No. 13‐1349

new objections are raised and a simple “ditto” explains the

award.

III. Conclusion

We find no error in the district court’s calculation of the

restitution amount, and therefore AFFIRM Yair’s sentence.