Court Opinion

ID: 9491349
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:11:44.321135+00
Date Added: 2024-06-11T17:54:41.088751
License: Public Domain

FERGUSON, Circuit Judge,
concurring and dissenting.
I concur in the majority opinion except for Part C. I dissent because the district court properly ordered restitution in the amount of $116,223.00. The defendant took a business opportunity away from the bank, made a *1148profit, and therefore should make restitution of the profit.
Although the majority details at length the fraud, escrow, property purchases, and profit dealings of the defendant, they fail to understand that the defendant misappropriated not only $30,000 from the bank but wilfully and deliberately took away a business opportunity. The district court understood exactly what the defendant did and therefore made the restitution order which the majority now rejects.
The district court correctly considered the profit the defendant made from his misappropriation of funds as part of the actual loss suffered by the Gold River Bank. The defendant violated 12 C.F.R. § 571.9 (1989) which requires officers and directors of banks to obtain regulatory approval before taking a business opportunity away from a bank. This regulation addresses the serious consequence self-dealing has had on the health of financial institutions in this country. “Problem banks and insider abuses have been virtually synonymous. Nothing appears more often in the fever charts of sick financial institutions than self-dealing ailments.” See generally H.R.Rep. No. 1383, 95th Cong., 2d Sess. 10, reprinted in 1978 U.S.Code Cong. & Admin. News 9273, 9282.
The district court found that the initial cash amount misapplied by the defendant in his fraudulent scheme was $30,000, and used that figure in determining the offense level for the purpose of his sentencing pursuant to U.S.S.G. § 2Fl.l(b)(l)(E).
However, the Victim and Witness Protection Act (“VWPA”) 18 U.S.C. §§ 3663-3664, governs restitution in criminal cases, not the sentencing guidelines. As we stated in United States v. Catherine, 55 F.3d 1462, 1465 (9th Cir.1995), “The different method of calculating loss in each case is due to the different purposes behind the statues.” See also United States v. Gilberg, 75 F.3d 15, 23 n. 7 (1st Cir.1996) (Loss calculations under U.S.S.G. § 2F1.1 are based on criteria different from the VWPA criteria). Therefore, we are bound to determine restitution according to VWPA criteria.
The VWPA states that a district court may award an amount equal to the greater of: (1) the value of the property on the date of the damage, loss, or destruction; or (2) the value of the property on the date of sentencing. Here, the defendant took a business opportunity away from the bank and with that misappropriation made a profit of $116,223. Congress has stated with certainty that defendants may be required by an order of restitution to disgorge the profit that they made from the theft of victims’ property. The business opportunity had reached a value far in excess of $30,000. As we held in United States v. Sablan, 92 F.3d 865, 870 (9th Cir.1996), “a restitution order must be based on losses directly resulting from the defendants criminal conduct.” Here the loss directly resulting from the misappropriation of the business opportunity was the profit made by the defendant.
I therefore dissent. The district court was correct in its determination that the defendant should not be permitted to profit from his crime.