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 Law Office of 

GEORGE H. SOLTERO

State Bar No. 012362 

6281 N. Oracle Road No 37092 

Tucson, Arizona 85740 

(520) 405-4906 

gsoltero@solterolaw.com 

Attorney for Defendant 

 IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

United States Of America, 

 Plaintiff, 

v. 

Jorge Antonio Williams-Araiza 

 Defendant. 

CR 16-0184-TUC-RM (LAB) 

HEARING MEMORANDUM TO 

THE COURT ON PROVABLE 

CLAIM AND “ACTUAL LOSS” IN 

RESTITUTION

 

 

Defendant Jorge Antonio Williams-Araiza, through counsel, 

respectfully submits the following Hearing Memorandum to the Court on Provable 

Claim and “Actual Loss” in Restitution. 

Co-counsel J. Bert Vargas, on behalf of Javier Ramirez-Villegas, and Cocounsel Jesus Romo Vejar, on behalf of Anwar Barragan-Flores, join in this 

Hearing Memorandum as to law set out, but not in the analysis as it pertains 

specifically to Williams-Araiza. 

On February 15, 2018, a Restitution Hearing was conducted by this court. The 

Government produced a Summary Chart setting out the fraud various financial 

institutions could recognize. The court gave the parties five days to submit a Hearing 

Case 4:16-cr-00184-RM-LAB Document 248 Filed 02/23/18 Page 1 of 7
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Memorandum addressing the following issue: Can the court issue an order of 

Restitution where the victims have not requested reimbursement? 

The Mandatory Victims Restitution Act does not allow a court to issue a 

reinstitution order to an unidentified victim, who has not requested a specific amount 

for a provable actual loss, 18 USC 6343, 6343A, and 6364. 

BACKGROUND FACTS: 

The Mandatory Victims Restitution Act requires the Probation Officer (not 

the Government) to contact and identify victims, and also demonstrate that they 

suffered a provable “actual loss” for which they are claiming restitution. The 

Presentence Report indicates that their victim advocate attempted to contact 1,800 

possible victims (PSR paragraph 18); the first step in a restitution analysis as 

required by statute. The Presentence Report did not indicate how many of the 

1,800 people responded to the victim advocate. The Presentence Report did set out 

there were fifty-four possible victims of Williams-Araiza’s conduct; eleven banks 

and forty- three individuals (PSR paragraph 15). The PSR did not indicate how 

many, if any, of the fifty-four potential victims responded to the victim advocate. 

PSR at paragraph 19 concludes that “loss for each victim remains unknown.” As 

not a single victim responded to the Probation department’s attempts to contact 

victims, the PSR advised the court that a restitution hearing should be set 90-days 

in the future (PSR paragraph 19). 

 Starting from these reference points, this court must now examine if any of 

Williams-Araiza’s fifty-four potential victims discussed in the PSR have a 

provable “actual loss.” A person can be the victim of identity theft, but not have 

an actual loss. The PSR does not distinguish between a potential victim, and an 

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actual victim who has a provable claim of actual loss as required by the Mandatory 

Victims Restitution Act. Nor does the PSR set out any victim who may have 

already been made whole by other means. 

Only those who can establish they actually lost money have an “actual loss.” 

The Mandatory Victims Restitution Act requires that identified victims establish 

the provable dollar amount of their loss. If a person has a charge on their credit 

card and the credit card company voids the charge because of identity theft, then 

the card-holder has not suffered an “actual pecuniary loss.” 

In the same way, if a credit card company’s fraud department is advised by a 

card-holder that there is a fraudulent use of the card and the company immediately 

voids the charge, then the credit card company may, or may not, have an actual 

loss. The credit card company is required to establish through reliable means the 

amount they actually paid the vendor (minus any discount generally factored 

between the amount of the charge and what the card company actually pays the 

vendor). It is also well known that financial institutions insure against credit card 

fraud with large secondary insurers like American International Group (AIG). The 

company pools those losses, then is reimbursed by their insurer. Further, when a 

financial institution has incurred a loss, they will then claim that amount of loss 

against profits, thereby mitigating the actual loss. The problem is, an “actual loss” 

to the credit card company may be much less than the amount of potential fraud 

recognized. 

This court’s paramount concern must not be focused with potential fraud as 

identified by the Government at the Restitution hearing, but only with “Identifiable 

victims” who have borne a provable “actual loss.” The process as set out in the 

Mandatory Victims Restitution Act necessarily involves several steps and is not 

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simply satisfied by submitting a summary chart to the court adding up the 

cumulative amount of potential fraud. 

LAW 

PROXIMATE CAUSE: 

 Williams-Araiza respectively asks the court to limit his obligation to 

the provable claims for which he is the proximate cause of the actual loss. The 

court has discretion as to whether it should find defendants jointly and severally 

responsible in restitution, or apportion the restitution. 18 U.S.C. 3664 (h); United 

States v. Booth, 309 F.3d 566 (9th Cir. 2002). However, pursuant to the Mandatory 

Victims Restitution Act, restitution can only be awarded for losses for which the 

defendant’s conduct was the actual and proximate cause. United States v. 

Kennedy, 643 F.3d 1251(9th Cir. 2011) (See also, United States v. May, 706 F.3d 

1209(9th Cir. 2013), the defendant’s conduct must be the proximate cause of the 

specific loss.) The government must show that the defendant’s conduct 

proximately caused the loss for which restitution is awarded and it did so in an 

exact amount. United States v. Tsosie, 639 F.3d 1213(9th Cir. 2011) 

Williams-Araiza (along with Ramirez-Villegas) is identified in PSR 

paragraph 12, as a “shopper.” He did not participate in manufacturing the cards, or 

the scheme to acquire the information. Williams-Araiza should not be held 

responsible in restitution for losses attributable to other, more centrally culpable 

defendants. United States v. Lloyd, 807 F.3d 1128 (9th Cir. 2015) 

// 

// 

// 

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PROOF OF LOSS: 

At the restitution hearing conducted on February 15, 2018, not a single 

victim was identified by the Probation Officer as required by statute. The 

Government did compile and produce a summary chart of fraud identified by 

financial institutions. The Government’s Exhibits were admitted over strong 

objections by all co-defendants. A summary chart (Exhibit 5) based on hearsay and 

lacking proper foundation should not have been admitted by the court. More 

important, the summary chart produced by the Government does not show any 

provable “actual loss” by any victim. 

Pursuant to the Mandatory Victims Restitution Act, the correct measure of 

loss in restitution is the victim’s actual loss. United States v. Fu Sheng Kuo, 620 

F.3d 1158(9th Cir. 2010) The victim may not recover more than their actual loss. 

United States v. Rizk, 660 F.3d 1125(9th Cir. 2011) General financial information 

will not support a claim for loss. United States v. Brock-Davis, 504 F.3d 991 (9th

Cir. 2007) 

Evidence supporting a restitution order must be specific and reliable. 

Summary and conclusory affidavits from victims does not reliably establish the 

amount of restitution. United States v. Waknine, 543 F.3d 546,557(9th Cir. 2008), 

(The analysis in Waknine from pages 555-59 is the law of the circuit on proof of 

restitution claims by affidavits), (See also United States v. Kennedy, 643 F.3d 

1251 (9th Cir. 2011), a three step-method of examining a restitution claim is set out 

in a meticulous opinion by Judge Ikuta). Even a spreadsheet claiming restitution, 

but lacking a specific explanation of loss, is not sufficient. United States v. Tsosie 

at 122-23(9thCir.2011). 

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In this case, not a single claim for restitution has been presented from any 

identifiable victim. Identifying fraud is not proof of “actual loss.” Further, there is 

not any reliable proofs of “actual loss” that has been presented to this court through 

the Probation Officer as required by statute, or boot-strapped into the record by the 

Government. 

CONCLUSION 

In the restitution hearing conducted by this court on February 15, 2018, the 

government compiled, produced and submitted a summary chart of fraud identified 

by various financial institutions. However, the Mandatory Victims Restitution Act 

concerns itself with identifying victims, and provable “actual loss.” The 

Mandatory Victims Restitution Act only allows restitution to be ordered when 

there is an identifiable victim who has incurred a provable actual loss. 

Ordering restitution without identifying victims and demonstrating provable 

actual loss would violate the Mandatory Victims Restitution Act and the 

Defendants’ Due Process rights guaranteed under the Sixth Amendment to the 

United States Constitution. 

ANSWER: 

As neither the Probation Officer, nor the Government has identified any 

victim who has incurred a provable actual loss -- not even a single request to be 

made whole -- pursuant to the Mandatory Victims Restitution Act, restitution 

cannot be ordered by this court. 

// 

//

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RESPECTFULLY SUBMITTED: February 23, 2018.

 /s/ George H. Soltero 

 GEORGE H. SOLTERO 

 Attorney for Williams-Araiza 

Case 4:16-cr-00184-RM-LAB Document 248 Filed 02/23/18 Page 7 of 7