Opinion ID: 808490
Heading Depth: 3
Heading Rank: 2

Heading: The MVRA’s statutory goal

Text: The MVRA’s overriding purpose is “to compensate victims for their losses.” United States v. Pescatore, 637 F.3d 128, 138 (2d Cir. 2011) (internal quotations omitted). And [b]ecause the MVRA mandates that restitution be ordered to crime victims for the “full amount” of No. 10-3794 13 losses caused by a defendant’s criminal conduct, see 18 U.S.C. § 3664(f)(1)(A); United States v. Reifler, 446 F.3d at 134 . . . , it can fairly be said that the “primary and overarching” purpose of the MVRA “is to make victims of crime whole, to fully compensate these victims for their losses and to restore these victims to their original state of well-being.” United States v. Boccagna, 450 F.3d 107, 115 (2d Cir. 2006) (quoting United States v. Simmonds, 235 F.3d 826, 831 (3d Cir. 2000). Our holding is consistent with the goals of the MVRA, as well as the concept of restitution. The offset amount for purposes of restitution is the cash recouped following the disposition of the collateral. Otherwise the victims would not be made whole again because the eventual sales proceeds could be, as they were in this case, woefully inadequate to fully compensate the victims for their loss and to put them in the position they would have been absent the fraud. Robers claims otherwise, asserting that our reading of the MVRA makes him the insurer of real estate values and improperly holds him responsible for declines in the real estate market. Robers then posits that the victims’ losses in this case were caused by the collapse of the real estate market and not his fraud. Therefore holding him responsible for the further decline in the real estate values—after the victims acquired title to the houses—violates the underlying purpose of the MVRA. Not so. Contrary to Robers’s argument, his fraud actually caused the losses at issue here. Absent his fraudu14 No. 10-3794 lent loan applications, the victim lenders would not have loaned the money in the first place. Likewise the mortgage notes would not have been extended, not paid, and then defaulted upon. And the banks would not have had to foreclose on and then resell the real estate in a declining market at a greatly reduced value. The decline in the real estate market does not mitigate his fraud. Robers lied about several things—his intent to reside in the house as his primary residence, his promise to pay the mortgage, his inflated income, and his exaggerated asset value. Absent Robers’s fraud, the decline in the real estate market would have been irrelevant: Assuming he actually qualified for the loans, he would be living in the house and making the mortgage pay- ments out of the income he claimed to be earning. If his assets had the value he claimed, he would not want to risk using them to satisfy any deficiency following a foreclosure sale. The declining market only became an issue because of Robers’s fraud. See Yeung, 672 F.3d at 603 n.5 (“[H]ere Yeung created the circumstances under which the harm or loss occurred through her use of false information that induced the Long Beach Trust to purchase the loan. Because the Long Beach Trust’s loss is directly related to Yeung’s offense, the declining value of the real estate collateral, even if attributable to general financial conditions, does not disrupt the causal chain, and the victims of the fraud are entitled to restituNo. 10-3794 15 tion.”) (internal citation omitted). 6 Essentially Robers wants a bailout, leaving the victims of his fraud to suffer the consequences of his deceit. Robers, not his victims, should bear the risk of market forces beyond his control. See United States v. Rhodes, 330 F.3d 949, 954 (7th Cir. 2003) (“[The defendant], rather than the victims, should bear the risk of forces beyond his control.” (quoting district court opinion)). If the real estate values increased, thereby allowing the creditor to resell the houses at a higher amount than owed, the bank would not be entitled to a restitution award. Similarly, if the increased sales price merely reduced the bank’s loss, it would obviously be error for the district court to order restitution based on the earlier lower market value because “[t]he VWPA and MVRA ensure that victims recover the full amount of their losses, but nothing more.” United States v. Newman, 144 F.3d 531, 542 (7th Cir. 1998). See also United States v. Smith, 156 F.3d 1046, 1057 (10th Cir. 1998) (“[A] district court may not order restitution in an amount that exceeds the loss caused by the defendant’s conduct. Such a restitution order would amount to an illegal sentence. [T]he imposition of an illegal sentence constitutes plain error.”) (internal quotations omitted). Thus, what Robers truly seeks is a one-way ratchet. But “the ‘intended beneficiaries’ of the MVRA’s procedural mechanisms ‘are the 6 Contrary to our holding, Yeung held that the offset value for purposes of restitution is the collateral’s value at the time title transfers to the loan holder. See infra at 25-28. 16 No. 10-3794 victims, not the victimizers.’ ” United States v. Moreland, 622 F.3d 1147, 1172 (9th Cir. 2010) (quoting United States v. Grimes, 173 F.3d 634, 639 (7th Cir. 1999)).7