Opinion ID: 2978318
Heading Depth: 4
Heading Rank: 2

Heading: Offset for McPeak’s return of judgments

Text: Elson also argues that co-defendant McPeak’s agreement to return the judgments “in question to the government” satisfied Elson’s restitution obligation. (Def.’s Br. 1112; Def.’s Reply Br. 3-4). More specifically, Elson asserts that because the “property” taken from the victims was judgments, the victims have been made whole by McPeak’s return of the judgments. The government interprets Elson’s argument as asserting that the restitution order permits “double recovery,” and responds by noting that “there has been no recovery by the victims resulting from McPeak’s agreement to transfer the civil judgments to the government.” (Gov’t Br. 46-47.) Neither the record nor the parties’ briefs disclose which judgments McPeak returned. Elson cites only to the district court’s restitution opinion which notes that the court approved McPeak’s agreement with the government pursuant to which McPeak would satisfy his restitution obligation by turning over to the government “[c]ertain judgments against Schultz which the [g]overnment estimates to be worth between $6 [million] and $10 [million].” (J.A. 150 n.4.) Significantly, Elson does not argue that the judgments McPeak delivered to the government include the judgments previously held by the victims at issue here—Bourke and St. Paul. As with the attorney-fee claim, if St. Paul and Bourke have received compensation for their losses, the district court should offset the restitution obligation by the amount received, assuming that the compensation is for the same loss that is the subject of the restitution obligation. E.g., United States v. Crawford, 169 F.3d 590, 593 (9th Cir. 1999). Here, even though McPeak has returned the judgments, the victims who sold the judgments remain uncompensated for the loss—the difference between the judgment’s value and the amount that they received in exchange for the judgment—caused by the Schultz conspiracy. Under the applicable statutory provisions, a victim must have “received compensation” for a court to consider the offset allowance provided in § 3664(j)(1). Further, Elson has not met his burden of showing that the No. 07-3778 United States v. Elson Page 29 government has collected on the returned judgments and distributed the proceeds to the victims. Accordingly, § 3664(j)(2), which provides that the restitution amount “shall be reduced by any amount later recovered as compensatory damages for the same loss” does not apply. Because “funds the victims have not received cannot reduce or offset the amount of losses the defendant is required to repay,” Bright, 353 F.3d at 1123, the district court lacked authority to reduce Elson’s restitution obligation by the value of the judgments returned. Elson further argues that, because McPeak’s restitution obligation was deemed satisfied by McPeak’s return of certain judgments, his obligation also should be discharged “since Elson and McPeak functioned together in the conspiracy.” (Def.’s Br. 11.) However, McPeak entered into a specific agreement with the government regarding restitution prior to the district court’s entry of the restitution order. Thus, as the district court noted in its restitution order, “the findings in th[e] order [relating to Elson’s restitution] do not pertain to [McPeak],” and McPeak was not ordered to pay restitution jointly and severally with Elson and the other co-defendants. (J.A. 150 n.6.) Moreover, Elson has not provided any details regarding the agreement between McPeak and the government, nor has he offered any reason to believe that McPeak’s payment of his restitution obligation through the return of judgments should discharge Elson’s obligation to pay restitution to the victims of the conspiracy. Accordingly, we conclude that Elson is not entitled to an offset of his restitution obligation.