Opinion ID: 814677
Heading Depth: 3
Heading Rank: 3

Heading: The $482 Million Restitution Order

Text: Defendants allege that the district court did not adequately explain its conclusions in support of the $482 million restitution award. Specifically, Defendants argue that the district court never explicitly stated that restitution was mandatory, never explained how it determined that the Bank of China qualified as a victim, and never justified the $482 million award. We agree and remand for reconsideration. UNITED STATES V . XU 51 “A restitution order is reviewed for an abuse of discretion, provided that it is within the bounds of the statutory framework. Factual findings supporting an order of restitution are reviewed for clear error. The legality of an order of restitution is reviewed de novo.” United States v. Marks, 530 F.3d 799, 811 (9th Cir. 2008) (internal quotation marks omitted). The district court’s valuation methodology is reviewed de novo. United States v. Bussell, 504 F.3d 956, 964 n.9 (9th Cir. 2007). The district court engaged in a cursory analysis of the legal and factual basis for the restitution award before concluding that the evidence at trial supported a finding “by clear and convincing evidence that the loss to the Bank of China resulted from the underlying scheme to defraud in excess of $480 million.” The $482 million restitution amount is for the most part consistent with the statement of offense conduct in the Presentence Report. However, Defendants contested those facts, and the district court rejected the presentence report’s factual findings to the extent they were inconsistent with the district court’s findings. Although we may uphold a restitution order when the district court fails to make pertinent factual findings, the basis of the court’s calculations must be clear for us to do so. United States v. Yeung, 672 F.3d 594, 604 (9th Cir. 2012). The basis for the district court’s calculations are not clear here. “Restitution can only be based on actual loss.” United States v Stoddard, 150 F.3d 1140, 1147 (9th Cir. 1998) (internal citations omitted). A restitution order must also be “based on losses directly resulting from a defendant’s offense.” Bussell, 504 F.3d at 964 (internal quotation marks omitted). We have previously noted the difficulties inherent in relying on loss determinations for purposes of Guidelines 52 UNITED STATES V . XU calculations during the calculation of restitution amounts, see United States v. Gossi, 608 F.3d 574, 581–82 (9th Cir. 2010), and have held that such reliance is improper, Yeung, 672 F.3d at 604. The transcript of the sentencing hearing reveals that the district court referred to its Guidelines calculations in making factual findings regarding the amount of actual loss suffered by the Bank of China. This reference is especially inappropriate given the previously discussed inability to trace Defendants’ fraudulent activity to actual bank losses. Therefore, because the district court did not provide sufficient grounds to support the $482 million figure, we remand for reconsideration regarding the legal and factual basis for the restitution order. See United States v. Waknine, 543 F.3d 546, 557–58 (9th Cir. 2008).