Court Opinion

ID: 2656261
Source: CourtListenerOpinion
Date Created: 2014-03-11 19:13:58.444742+00
Date Added: 2024-06-11T12:59:49.328458
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                              No. 13-4083

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

YOUSSEF HAFEZ ABDELBARY,

                Defendant - Appellant.

Appeal from the United States District Court for the Western
District of Virginia, at Roanoke.  Samuel G. Wilson, District
Judge. (7:10-cr-00067-SGW-1)

Argued:   December 12, 2013                 Decided:   March 11, 2014

Before TRAXLER, Chief Judge, and DIAZ and FLOYD, Circuit Judges.

Affirmed by published opinion.    Chief Judge Traxler wrote the
majority opinion, in which Judge Floyd joined. Judge Diaz wrote
a dissenting opinion.

ARGUED: Paul Graham Beers, GLENN, FELDMANN, DARBY & GOODLATTE,
Roanoke, Virginia, for Appellant.    Joseph W.H. Mott, OFFICE OF
THE UNITED STATES ATTORNEY, Roanoke, Virginia, for Appellee. ON
BRIEF: Timothy J. Heaphy, United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Roanoke, Virginia, for Appellee.
TRAXLER, Chief Judge:

     Youssef Abdelbary appeals a district court order requiring

him to pay restitution as part of his sentence for bankruptcy

fraud.   Finding no error, we affirm.

                                I.

     Abdelbary was convicted of wire fraud, money laundering,

currency structuring, bankruptcy fraud, and perjury.     This is

the second appeal in this case, and many of the facts relevant

to this appeal are set out in our first decision.      See United

States v. Abdelbary, 496 Fed. App’x 273, 2012 WL 5352515 (4th

Cir. 2012).

                                A.

          Youssef Abdelbary owned and operated a gas
     station and convenience store in Dublin, Virginia.
     Abdelbary leased the property and bought the gas he
     sold from Jordan Oil. While running this business,
     Abdelbary used a branch of the Carter Bank and Trust
     in Christiansburg, Virginia, where he made more than
     one hundred transactions, each involving more than
     $10,000. At the time of the first deposit of this
     size, Ralph Stewart, a local manager for Carter Bank
     and Trust, explained to Abdelbary about the currency
     transaction reports (“CTRs”) that had to be filed on a
     transaction involving more than $10,000.

          Abdelbary’s relationship with Jordan Oil grew
     contentious in late 2007 and early 2008. When
     Abdelbary failed to make a payment due to Jordan Oil
     in early February 2008 for gas it had delivered,
     Jordan Oil ceased its deliveries to Abdelbary. Jordan
     Oil sued soon thereafter to collect the money that
     Abdelbary owed, which totaled about $250,000. The
     following day, Abdelbary began withdrawing currency in
     amounts less than $10,000. Over the next eight days,
     Abdelbary withdrew $59,879.31 from his account in

                                 2
    eleven transactions. The litigation against Jordan Oil
    continued through the spring of 2008. Eventually, at
    the end of May, this litigation concluded when Jordan
    Oil obtained a final judgment against Abdelbary for
    $247,759.79    and   Abdelbary’s    counterclaim   was
    dismissed.

         The next month, Abdelbary engaged in a series of
    credit card transactions in which he charged his
    personal credit cards at his store in multiple equal
    amounts in a span of a few minutes. The value of these
    purchases was credited to the account at Carter Bank
    and Trust that Abdelbary used for his business, and he
    then withdrew this money, totaling $52,350, from that
    account in amounts less than $10,000.

          Abdelbary met with a bankruptcy attorney in July
    2008.    Abdelbary  initially  told   this   bankruptcy
    attorney that he wanted to get back at Jordan Oil, but
    Abdelbary eventually concluded that he would file for
    bankruptcy. When Abdelbary submitted his bankruptcy
    filing, he denied having made any gifts within one
    year or having transferred any property within two
    years of the filing. Additionally, Abdelbary stated at
    the bankruptcy creditors’ meeting that he had not
    transferred any assets to a family member. Despite
    these statements, Abdelbary had sent $76,000 to his
    brother in Egypt during those previous two years.[1]

                               B.

         Based on these events, Abdelbary was charged in a
    twenty-count indictment with wire fraud, 18 U.S.C. §
    1343, money laundering, 18 U.S.C. § 1956(a)(1)(B)(i)
    and (ii), currency structuring, 31 U.S.C. § 5324(a)(1)
    and (3) and § 5324(d), bankruptcy fraud, 18 U.S.C. §
    152(3), and perjury, 18 U.S.C. § 1623. A jury
    convicted Abdelbary on all counts.

         After the jury returned its verdict, the district
    court granted Abdelbary’s Rule 29 motion for judgment
    of acquittal on the wire fraud and money laundering
    counts. The district court read the indictment as
    requiring the Government to prove beyond a reasonable

    1
       The bankruptcy court eventually denied Abdelbary’s Chapter
7 petition.

                               3
      doubt that Abdelbary incurred the credit card charges
      in June 2008 with the intention of filing for
      bankruptcy and thus not repaying those companies. The
      district court held that the Government had not met
      this burden and therefore dismissed those counts of
      the indictment.

           At sentencing, the district court sentenced
      Abdelbary to twenty-four months in prison. The court
      entered   a   criminal   forfeiture   judgment    against
      Abdelbary for $112,229.31 and also ordered Abdelbary
      to pay restitution to Jordan Oil of $84,079.35 for
      attorney’s   fees   incurred   during   the   bankruptcy
      proceeding.   The   district   court  cited    both   the
      voluntary, 18 U.S.C. § 3663, and mandatory, 18 U.S.C.
      § 3663A, restitution provisions during the hearing
      without ever specifying the provision on which it was
      relying.

Id. at 274-75 (footnote omitted).

      On appeal, we affirmed Abdelbary’s conviction for currency

structuring,    reversed          the    judgment    of    acquittal      on    the   wire

fraud   and    money        laundering      convictions,          and    remanded     for

reinstatement       of    the     jury   verdict    and    entry    of    the   judgment

against Abdelbary.           See id. at 279.              Additionally, we vacated

the   restitution        award     and    remanded    for    further      proceedings,

holding that the district court had not specified whether the

award   was   pursuant       to    the    Victim    and    Witness      Protection    Act

(“VWPA”),     see    18      U.S.C.      § 3663,     or     the    Mandatory      Victim

Restitution Act (“MVRA”), see 18 U.S.C. § 3663A, and the court

had   overlooked         making    the    factual    findings      required      by   the

appropriate act.          See Abdelbary, 496 Fed. App’x at 279.

                                            4
       On remand, the district court sentenced Abdelbary to 27

months’ imprisonment.         The parties disagreed, as they did during

Abdelbary’s first sentencing, regarding whether Abdelbary should

be required, as part of his sentence for the bankruptcy fraud

offenses, to make restitution to Jordan Oil for the attorneys’

fees   it   incurred   in    the    bankruptcy      proceeding.      The     parties

agreed that the MVRA governs the question.                     See 18 U.S.C. §

3663A(c)(1)(A)(ii) (providing that MVRA applies to “an offense

against property under this title . . ., including any offense

committed by fraud or deceit”).                The district court found as a

factual matter that the attorneys’ fees at issue “were incurred

as a result of the bankruptcy fraud,” J.A. 523, and Abdelbary

did not dispute that point.              However, Abdelbary argued, as he

had during his initial sentencing, that Jordan Oil could not

recover     its    attorneys’       fees       incurred   in   the     bankruptcy

proceeding as part of restitution.                  Abdelbary maintained that

attorneys’ fees could never be included as compensable costs as

part of restitution under the MVRA.                  He alternatively argued

that attorneys’ fees were not includable based on the facts of

this case as Jordan Oil was not a victim of Abdelbary’s offense

since Abdelbary failed in his attempt to discharge his debts in

bankruptcy.       Abdelbary maintained that Jordan Oil’s incurrence

of   attorneys’    fees     was    at   most   a   consequential     loss,    not   a

                                           5
direct one, and thus the fees were not compensable as part of

restitution. 2

       The government disagreed and urged the district court to

again require Abdelbary to pay Jordan Oil restitution in the

amount      of     the    attorneys’        fees       it    incurred      as       a    result   of

Abdelbary’s bankruptcy fraud offenses.                             The government denied

that       there    was     any      sort     of       “blanket         prohibition        against

attorneys’ fees as a class of expense” and argued that they were

includable         as    part   of    restitution            so   long    as    they      resulted

directly from the crime.                    J.A. 525.             The government asserted

that Jordan Oil’s fees resulted directly and proximately from

the    bankruptcy         fraud      because       Jordan         Oil    incurred        the   fees

defending        its     rights      in     the       same    proceeding        –       Abdelbary’s

       2
       A question has been raised as to whether Abdelbary argued
during resentencing that the district court had failed to find
but-for causation.   See post, at 23 n.2 (citing J.A. 525-26,
528-29). But the district court noted during resentencing that
it had already found during the first sentencing “that these
attorney fees were incurred as a result of the bankruptcy
fraud.” J.A. 523. Abdelbary offered no challenge whatsoever to
that determination.    In the above-cited pages of the joint
appendix, Abdelbary simply argued that the attorneys’ fees were
consequential, rather than direct, damages.     See J.A. 525-26
(“[W]e do not concede that Jordan Oil is even a victim for
mandatory restitution purposes, because the victim has to be the
direct victim of the alleged offense.    They’re not the direct
victim . . . . I think if there’s a victim there, Judge, it’s
the bankruptcy trustee, not Jordan Oil.”); J.A. 528-29 (“Mullins
says that consequential damages, such as attorneys’ fees, are
not recoverable. . . . [The fees are] not a direct damage. As
a matter of law, that’s a consequential damage. . . .    They’re
trying to get attorneys’ fees; that’s a remote, inconsequential
damage. That’s not an intended – a direct loss.”).

                                                  6
bankruptcy – in which the fraud occurred.                      In other words, the

position of the government was that in order to avoid paying

Jordan Oil and its other creditors, Abdelbary tried to hide his

money, assert insolvency, and file for bankruptcy.                         Jordan Oil

was then forced to obtain legal representation to keep its claim

against      Abdelbary    alive.          As        the     bankruptcy     proceedings

progressed, Abdelbary persisted in his lies about his assets and

what he had done with his money.                    The lies he told became the

bases for his convictions for bankruptcy fraud and required the

continuation of the bankruptcy proceedings that caused Jordan

Oil’s litigation expenses to reach $84,079.35.                          The government

distinguished the facts of the present case from those in which

a   victim     suffers    a    loss   and       then        sometime     later    incurs

attorneys’ fees attempting to recover from the defendant.

     The district court rejected Abdelbary’s arguments, agreed

with the government, and again ordered Abdelbary under the MVRA

to pay $84,079.35 to Jordan Oil in restitution, representing the

amount of the legal fees Jordan Oil incurred during bankruptcy

proceedings.      The district court found that the attorneys’ fee

expenditures      “were       directly        and         proximately     caused”      by

Abdelbary’s bankruptcy fraud insofar as Jordan Oil incurred the

fees defending its rights in the very same proceeding in which

the bankruptcy fraud occurred.                 J.A. 534.        The district judge

specifically     stated   that     “I’m       not    thinking     of    this     as   fee-

                                          7
shifting.       I’m thinking of it as a direct harm from the filing

of this.      As [the government] has indicated, [Jordan Oil was]

essentially dragged into bankruptcy court.”                        J.A. 533-34.

                                                 II.

       Abdelbary      now    argues         on   appeal     that   the    district    court

erred   in    requiring          him   to    pay       Jordan   Oil’s    attorneys’     fees

incurred in the bankruptcy proceeding as part of restitution.

We disagree.

       In the sentencing context, we review findings of fact for

clear error and questions of statutory construction de novo.

See United States v. Moore, 666 F.3d 313, 320 (4th Cir. 2012).

We review the application of the court’s factual findings in

this context for abuse of discretion.                      See id.

       Some background concerning the enactment of the VWPA and

the MVRA is helpful to an understanding of the issue Abdelbary

raises.      Although restitution has long been authorized at common

law,    there     was       no     statutory           authorization      for   requiring

restitution      as    part       of   a     criminal      sentence      outside   of    the

probation context prior to the enactment of the VWPA, see S.

Rep. No. 97-532, at 30 (1982); United States v. Amato, 540 F.3d
153, 159 (2d Cir. 2008).               Congress enacted the VWPA in 1982, see

Pub. L. 97-291, 96 Stat. 1248 (currently codified at 18 U.S.C.

                                                  8
§ 3663). 3      Under the VWPA, as originally enacted, restitution

could be made only to a “victim” of the offense of conviction

and only for specified types of losses that were “caused by the

specific      conduct     that       is    the       basis    of    the    offense    of

conviction.”        Hughey v. United States, 495 U.S. 411, 413 (1990). 4

Even concerning victims who have suffered the specified type of

losses, the decision whether to order restitution under the VWPA

is discretionary.        See 18 U.S.C. § 3663(a)(1).

       As originally enacted, the VWPA identified particular types

of   losses    that     could   be   included        in    restitution     for   certain

types      crimes   involving    damage         to   or    loss    or   destruction   of

property, see 18 U.S.C. § 3663(b)(1), and other types of losses

that could be included for crimes involving bodily injury, see

18 U.S.C. § 3663(b)(2), (3).                 In 1994, Congress added to the

types of losses that could be included under the VWPA by adding

subsection (b)(4).         See Violence Against Women Act of 1994, Pub.

L. No. 103-322, Title IV, § 40504, 108 Stat. 1796, 1947 (1994).

That       subsection     provides        that,      for     any    type    of    crime,

       3
       The VWPA was originally codified at 18 U.S.C. §§ 3579-80
but was later recodified so that § 3579 now appears as § 3663
and § 3580 now appears as § 3664. See Hughey v. United States,
495 U.S. 411, 413 n.1 (1990).
       4
       “Federal courts do not have the inherent authority to
order restitution, but must rely on a statutory source to do
so.” United States v. Davis, 714 F.3d 809, 812 (4th Cir. 2013)
(internal quotation marks and alteration omitted).

                                            9
restitution orders may be used to “reimburse the victim for lost

income    and    necessary        child    care,    transportation,           and      other

expenses    related        to    participation       in      the   investigation          or

prosecution of the offense or attendance at proceedings related

to the offense.”       18 U.S.C. § 3663(b)(4).

     In     1996,    Congress       enacted      the      MVRA     as    part     of    the

Antiterrorism and Effective Death Penalty Act of 1996, see Pub.

L. No. 104-132, 110 Stat. 1214 (1996).                    The MVRA made payment of

restitution as part of a criminal sentence mandatory for certain

categories of offenses that directly and proximately caused a

victim to suffer either a physical or a pecuniary loss.                                  See

MVRA § 202, 110 Stat. at 1227; United States v. Squirrel, 588
F.3d 207, 212 (4th Cir. 2009).                   While the VWPA’s substantive

requirements are codified at 18 U.S.C. § 3663, the MVRA’s are

primarily    set     out    at    18    U.S.C.     § 3663A. 5        Section        3663A’s

structure    mirrors       that    of     § 3663,      and    much      of   § 3663A     is

identical       or   nearly        identical        to       language        in     § 3663.

Additionally, the MVRA amended § 3663’s definition of “victim”

to match the definition in § 3663A, which is, as is relevant

here, “a person directly and proximately harmed as a result of

     5
       The procedure for imposing restitution under both statutes
is set out in 18 U.S.C. § 3664. See 18 U.S.C. § 3556.

                                           10
the   commission   of    an   offense     for        which   restitution    may       be

ordered.”   18 U.S.C. § 3663A(a)(2); see 18 U.S.C. § 3663(a)(2).

      Section   3663A(b),     like      its    VWPA    counterpart,      § 3663(b),

specifically    identifies       the   types     of    losses    includable      in    a

restitution     award    under    the     MVRA.         This    appeal   primarily

concerns 18 U.S.C. § 3663A(b)(1), which provides:

      (b) The order of restitution shall require that such
      defendant−

        (1) in the case of an offense resulting in damage to
        or loss or destruction of property of a victim of
        the offense−

         (A) return the property to the owner of                           the
         property or someone designated by the owner; or

         (B) if return of the property under subparagraph
         (A) is impossible, impracticable, or inadequate,
         pay an amount equal to−

          (i) the greater of−

            (I) the value of the property on the date of the
            damage, loss, or destruction; or

            (II) the value of the property on the date of
            sentencing, less

          (ii) the value (as of the date the property is
          returned) of any part of the property that is
          returned . . . .

Here, the district court found that Jordan Oil was a “victim” of

Abdelbary’s     offense       because         his     offenses     directly       and

proximately     caused    Jordan        Oil     to     expend    $84,079.35       for

attorneys’ fees, see 18 U.S.C. § 3663A(a)(2), such than an award

in the amount of those fees was proper under subsection (b)(1).

                                         11
On this basis, the court ordered Abdelbary to make restitution

to Jordan Oil in that amount.

     Abdelbary     does    not     challenge    the    district     court’s

determination that Jordan Oil incurred the attorneys’ fees as a

result of his bankruptcy fraud.           Abdelbary maintains, though,

that the restitution order was erroneous because attorneys’ fee

expenditures     are   never     compensable   under   the   MVRA   as   is

demonstrated by our decision in United States v. Mullins, 971
F.2d 1138 (4th Cir. 1992). 6        We conclude, however, based on the

     6
       Abdelbary also contends that the district court erred in
concluding that Jordan Oil was a victim because the district
court specifically found that Jordan Oil did not suffer an
actual loss, within the meaning of the MVRA, as a result of the
offense.   See United States v. Harvey, 532 F.3d 326, 339 (4th
Cir. 2008) (explaining that a restitution order must be based on
a victim’s actual loss). In support of his contention that the
district court found no actual loss, Abdelbary points to page 5
of the amended judgment, wherein the court listed “$0.00” as
Jordan Oil’s “[t]otal [l]oss.” J.A. 565. However, we conclude
that the listing of “0.00” as Jordan Oil’s total loss on the
amended judgment at most amounted to an administrative error.
The sentencing transcript makes clear that the district court
actually found as a fact that Abdelbary’s conduct underlying his
offenses directly and proximately caused Jordan Oil to expend
$84,079.35 in attorneys’ fees.   We therefore conclude that the
notation on the amended judgment does not affect the validity of
the restitution order.   Cf. United States v. Osborne, 345 F.3d
281, 283 n.1 (4th Cir. 2003) (“It is normally the rule that
where a conflict exists between an orally pronounced sentence
and the written judgment, the oral sentence will control.”);
United States v. Morse, 344 F.2d 27, 30 (4th Cir. 1965) (“[W]e
should carry out the true intention of the sentencing judge as
this may be gathered from what he said at the time of
sentencing.”).

(Continued)
                                     12
district court’s findings, that the fees were includable under

subsection § 3663A(b)(1). 7

     In    Mullins,   the    defendant       was    convicted      of   aiding       and

abetting the commission of wire fraud, which involved obtaining

$45,000 worth of kitchen equipment.                  See id. at 1140.                The

district     court    ordered     the   defendant        to    pay      $42,500       in

restitution as part of his sentence under the VWPA.                     See id.       As

is   relevant    here,      the   defendant         argued    that      the     amount

improperly    included      consequential          damages    in     the      form   of

     We do not read page 13 of Abdelbary’s opening brief to
challenge the district court’s failure to find but-for causation
at sentencing.   In our view, the cited page is simply part of
Abdelbary’s argument that Jordan Oil was not a “victim” within
the meaning of the MVRA because the court’s listing of “$0.00”
as Jordan Oil’s “[t]otal loss” constituted a factual finding
that Jordan Oil suffered no loss as a result of the bankruptcy
fraud. In the cited page of Abdelbary’s brief, Abdelbary argues
that a finding of no loss would not have been clearly erroneous
because Jordan Oil’s attorneys’ fees were at most consequential,
rather than direct, damages.      See Appellant’s Brief at 13
(“Abdelbary’s goal was to obtain a judicial discharge of his
indebtedness to Jordan Oil and other creditors. Causing Jordan
Oil to incur attorney’s fees was not an element of the offense.
Jordan Oil’s legal bills were at most an indirect consequence of
Abdelbary’s offense. . . .       A restitution award may only
compensate for a victim’s actual damages resulting directly from
an essential conduct element of the offense.      Indirect losses
and consequential damages are not compensable ‘losses’ under the
MVRA.” (emphasis added)).     For the reasons explained in the
remainder of our opinion, Abdelbary’s argument is incorrect.
     7
       Because we conclude that the fees were includable under
subsection (b)(1), we do not address Abdelbary’s argument that
the district court correctly determined that the fees were not
includable under subsection (b)(4).

                                        13
attorneys’ fees and other amounts expended by the equipment’s

owner in repossessing the equipment.                   See id. at 1146.             In

analyzing the scope of the losses includable in the restitution

order,    we    observed   that   18      U.S.C.     § 3663(b)(1)      –   which     is

essentially identical to its MVRA counterpart 8 – described the

amount    of    restitution   the    district        court    was    authorized     to

award.     See id.      Construing this language, we concluded that

“[i]n    cases    involving   the        damage,    loss,     or    destruction     of

property, restitution must be limited to that which the statute

authorizes: return of the property, or payment of the property’s

value, either on the date of damage or loss or on the date of

    8
         18 U.S.C. § 3663(b)(1) provides:

    (b) The order may require that such defendant−

         (1) in the case of an offense resulting in damage to or
         loss or destruction of property of a victim of the
         offense−

          (A) return the property to the owner of the property or
          someone designated by the owner; or

          (B) if return of the property under subparagraph (A) is
          impossible, impractical, or inadequate, pay an amount
          equal to the greater of−

           (i) the value of the property                 on    the    date    of    the
           damage, loss, or destruction, or

           (ii) the value           of    the      property    on    the     date    of
           sentencing,

               less the value (as of the date the property is
               returned) of any part of the property that is returned
               . . . .

                                          14
sentencing, less the value of any part of the property that is

returned.”         Id. at 1147.             Regarding Mullins’s consequential-

damages argument, we “h[e]ld that an award of restitution under

the VWPA cannot include consequential damages such as attorney’s

and investigators’ fees expended to recover the property” that

was the target of the crime.                Id.

     Abdelbary       contends        that    Mullins     is   consistent      with      the

“American Rule,” under which each party is responsible for his

own attorney’s fees and the related rule that courts are not

authorized to deviate from the American Rule unless an express

contractual or statutory provision specifically provides for an

attorneys’ fee award.              See Fox v. Vice, 131 S. Ct. 2205, 2213

(2011); Crescent City Estates, LLC v. Draper (In re Crescent

City Estates, LLC), 588 F.3d 822, 825-26 (4th Cir. 2009).                                He

claims     that     in    light      of     Mullins     and   the     American       Rule,

§ 3663(b)’s        MVRA       counterpart,        § 3663A(b),       should     not      be

construed     to    authorize         the    restitution      ordered       here.       We

disagree.

     Initially,          we    note       that    the    American      Rule       has    no

application       here.       That    rule    provides    that      “[i]n   the     United

States, the prevailing litigant is ordinarily not entitled to

collect a reasonable attorneys’ fee from the loser.”                              Alyeska

Pipeline    Serv.    Co.      v.   Wilderness      Society,     421 U.S. 240,      247

(1975).     But we are not reviewing a question of entitlement to

                                             15
fee shifting as between parties to a case − that would be a

matter for the bankruptcy court.                Rather, what is before us is

the separate question of what losses can be includable as part

of criminal restitution.               See United States v. Scott, 405 F.3d
615, 619 (7th Cir. 2005) (“The line between criminal restitution

and common law damages is important to maintain.”).                       In this

context, there is no reason to presume that Congress intended to

preclude the inclusion of amounts expended on attorneys’ fees as

part of restitution in the exceptional scenario in which the

fees were the direct and proximate result of the defendant’s

crime.

      Rather,   this      case    is    governed   by   the   rule   explained   in

United States v. Elson, 577 F.3d 713 (6th Cir. 2009):

      Generally, attorney fees incurred in civil litigation
      against the defendant for the same acts at issue in
      the criminal proceedings are consequential damages
      that are not recoverable.    However, where a victim’s
      attorney fees are incurred in a civil suit, and the
      defendant’s overt acts forming the basis for the
      offense of conviction involved illegal acts during the
      civil trial, such as perjury, such fees are directly
      related to the offense of conviction and therefore are
      recoverable as restitution under the MVRA.

Id. at 728 (citation omitted); see also United States v. Havens,

424 F.3d 535,   539    (7th    Cir.    2005)   (holding    that   restitution

under the MVRA for identity-fraud victim could include “[f]ees

paid to counsel or other experts for dealing with the banks and

credit agencies in the effort to correct her credit history and

                                           16
repair the damage to her credit rating”).                        We note that this

explanation of the applicable causation rule concerning the MVRA

is in line with other circuits’ applications of the VWPA as

well.     See United States v. DeGeorge, 380 F.3d 1203, 1221-22

(9th    Cir.    2004)     (holding    that     when    the      defendant’s     offense

“included his perjury and other conduct during the civil trial”

then “the insurance company’s expenses in the civil trial were

directly,       not     tangentially,        related       to    [the    defendant’s]

offenses” and thus includable as part of restitution under the

VWPA); United States v. Mikolajczyk, 137 F.3d 237, 245-46 (5th

Cir. 1998) (holding that when the filing of a fraudulent lawsuit

is part of the offense, the “costs of defending the lawsuit were

a direct and mandatory result of [the defendant’s act], not a

voluntary action taken . . . to recover property or damages”

even though “[t]he VWPA does not generally authorize recovery of

legal    fees    expended       to   recover    stolen       property”);    see   also

Government of Virgin Is. v. Davis, 43 F.3d 41, 46 (3d Cir. 1994)

(stating that “[t]he plain language of the VWPA, as well as the

reasoning       adopted    by    other   courts       of   appeal,      leads   us   to

conclude that absent specific statutory authority for an award

of attorneys’ fees, the amount of restitution ordered under the

VWPA may not include compensation for legal expenses unless such

costs are sustained as a direct result of the conduct underlying

the offense of conviction” (emphasis added)).

                                          17
      This rule is also entirely consistent with Mullins.                                  That

is so because the attorneys’ fees the Mullins victim expended in

an attempt to recover property taken earlier fall within the

general rule that such fees are not the direct and proximate

result    of     the       defendant’s       criminal        conduct    but     are    merely

consequential damages.               In fact, an examination of exactly how

the   applicable           statutory      language       applies     to    the    facts     in

Mullins also reveals how the present case falls outside of the

general rule that attorneys’ fees are not includable.

      Subsections 3663(b)(1) and 3663A(b)(1) apply “in the case

of an offense resulting in damage to or loss or destruction of

property of a victim of the offense.”                        18 U.S.C. §§ 3663(b)(1),

3663A(b)(1).          And, to be a victim under § 3663 or § 3663A, an

entity     must       be     “directly       and       proximately      harmed”       by    the

defendant’s offense.               18 U.S.C. §§ 3663(a)(2), 3663A(a)(2).                    In

light    of     (a)(2)’s         direct-and-proximate            requirement,      we      have

applied the same requirement in (b)(1) such that “the amount of

any restitution due [the victim] under the MVRA is the amount of

actual loss to [the victim] directly and proximately caused by

[the defendant’s] offense conduct.”                      United States v. Wilkinson,

590 F.3d 259,        268    (4th    Cir.     2010)     (emphasis      added).         The

property       lost    or        destroyed    in       Mullins    was     the    $45,000     in

restaurant equipment, not the fees later incurred to recover the

equipment.        That       is,    the   only        loss   directly     and    proximately

                                                 18
caused by the wire-fraud offense was the loss of the restaurant

equipment, and restitution was thus permitted only as to that

loss.     Because the statute does not authorize restitution for

consequential damages, the inclusion of the amount of attorneys’

and investigators’ fees expended to repossess the equipment were

improper in Mullins.

        In the present case, however, unlike in Mullins, the causal

relationship       the    government         sought     to   establish     between     the

crime and the incurrence of the fees was not based simply on the

fact that the fees were incurred to prevent harm from, or to

remedy     harm     caused      by,    the     defendant’s         criminal     conduct.

Rather, the government sought to prove that the fees incurred

were directly and proximately caused by Abdelbary’s bankruptcy

fraud because the fraud occurred in the context of Abdelbary’s

bankruptcy proceeding and Jordan Oil incurred the fees defending

its interests against Abdelbary’s fraud in that same proceeding.

See   Elson, 577 F.3d   at    728;    DeGeorge, 380 F.3d    at   1221-22;

Mikolajczyk, 137 F.3d at 245-46.                  Since the offense directly and

proximately caused Jordan Oil to incur the fees, the offense

“result[ed] in damage to or loss or destruction of property of a

victim of the offense,” 18 U.S.C. § 3663A(b)(1) − the property

being     the     money    that       Jordan      Oil    expended     on    the    fees.

Accordingly,       the    district     court      properly     determined       that   the

amount of attorneys’ fees Jordan Oil incurred in the bankruptcy

                                             19
case       as   a   result   of   Abdelbary’s   offense   is   includable   as

restitution under the MVRA.          See 18 U.S.C. § 3663A(b)(1)(B). 9

                                       III.

       For the foregoing reasons, the district court’s restitution

order is affirmed.

                                                                     AFFIRMED

       9
       Abdelbary argues that the district court concluded that it
had authority under subsections (a)(1) and (a)(2) of § 3663A to
include the fees, but did not find that they were includable
under subsection (b)(1).      That the district court did not
specifically identify (b)(1) as the source of its authority is
beside the point, however, as the court made the critical
finding that Jordan Oil’s incurrence of the fees was the direct
and proximate result of Abdelbary’s offense.

                                        20
DIAZ, Circuit Judge, dissenting:

      The majority concludes that attorneys’ fees are recoverable

as restitution under the MVRA “in the exceptional scenario in

which    the    fees     were    the    direct      and   proximate         result    of    the

defendant’s crime.”              Maj. Op. at 16.               Although I agree, in

theory,     that    attorneys’          fees    may     be    part     of    an    award     of

restitution under the statute, I take issue with the finding

that all of the fees incurred by Jordan Oil were directly and

proximately      caused     by    Abdelbary’s          offense       conduct.         Such    a

conclusion       takes     too     broad        a      view    of     what        constituted

Abdelbary’s criminal offense.

      The      Supreme    Court        has    instructed       that    “restitution          as

authorized by [the MVRA] is intended to compensate victims only

for   losses     caused     by    the    conduct        underlying      the       offense    of

conviction.”       Hughey v. United States, 495 U.S. 411, 416 (1990)

(emphasis      added).      In    the        context    of    crimes    involving      false

statements, this court has noted that “Hughey and the text of

the [MVRA] do not allow us to stretch the ‘offense’ involved in

a perjury conviction to include any other conduct . . . to which

the     defendant’s       perjurious          statement       may     have     borne       some

relationship.”         United States v. Broughton-Jones, 71 F.3d 1143,

1149 (4th Cir. 1995); see also United States v. Blake, 81 F.3d
498, 506 (4th Cir. 1996) (“[T]he factual connection between [the

defendant’s] conduct and the offense of conviction is legally

                                               21
irrelevant for the purpose of restitution.”).                        The only relevant

considerations for restitution purposes are “the elements of the

offense of conviction and the specific conduct underlying these

elements.”      United States v. Freeman, __ F.3d __, No. 12-4636,

2014 WL 185572,    at    *10    (4th    Cir.       Jan.   17,    2014)    (internal

quotation marks omitted).

       Abdelbary was convicted of three counts of violating 18

U.S.C. § 152(3), which prohibits a person from “knowingly and

fraudulently mak[ing] a false . . . statement under penalty of

perjury . . . in or in relation to any case under title 11.”                                He

was also convicted of two counts of violating 18 U.S.C. § 1623,

which    prohibits     a   person     from       “knowingly     mak[ing]       any    false

material declaration” while under oath.                    The conduct underlying

these    convictions       consisted       of:      (1)    Abdelbary’s         fraudulent

representation in his Statement of Financial Affairs that he did

not    transfer   any      assets    during       the    two   years     preceding         the

bankruptcy     petition;       (2)     his       fraudulent       statement,          at     a

creditors meeting, that he had not transferred any assets to any

family    members;      and   (3)    his    fraudulent         denial,    at    the    same

meeting, of having transferred any assets within the previous

five years.

       The district court did not make a specific finding that

Abdelbary’s fraudulent statements--i.e., his offense conduct--

caused Jordan Oil to incur attorneys’ fees.                      Instead, the court

                                            22
seemed to base the restitution award on a finding that Jordan

Oil was harmed by the very fact that it had to participate in

bankruptcy proceedings at all.                          For example, the court stated,

“I’m       thinking       of     it    as   a     direct    harm    from   the   filing     of

this. . . . [Jordan Oil was] essentially dragged into bankruptcy

court.”         J.A. 533-34. 1

       In       my     view,      the       district        court    improperly       ordered

restitution          on    the    basis      of    Abdelbary’s      “relevant    conduct”--

pursuing        a    discharge         in   bankruptcy--rather        than   the    specific

conduct underlying his offense of conviction.                          See Freeman, 2014
WL 185572, at *6 (“[T]hese [restitution] statutes do not allow

restitution          for       relevant       conduct,      a    related   offense,    or   a

factually relevant offense, but rather the offense, which can

only       be   read      to    mean    the     offense     of    conviction.”     (internal

quotation marks omitted)). 2                      There is nothing in the record to

       1
       The majority makes a similar error, stating “the fees
incurred were directly and proximately caused by Abdelbary’s
bankruptcy fraud because the fraud occurred in the context of
Abdelbary’s bankruptcy proceeding . . . .”    Maj. Op. at 19
(emphasis added).
       2
        Although the majority believes otherwise, Abdelbary
challenged the district court’s failure to find but-for
causation at sentencing, see, e.g., J.A. 525-26, 528-29, and on
appeal, see, e.g., Appellant’s Br. at 13 (arguing that
“[c]ausing Jordan Oil to incur attorney’s fees was not an
element of the offense,” and emphasizing that “[a] restitution
award may only compensate for a victim’s actual damages
resulting directly from an essential conduct element of the
offense”).

                                                   23
suggest      that    Abdelbary    could    not    have   filed    for    bankruptcy

absent the fraudulent representations regarding his assets.                       And

for    all    we    know,   Abdelbary     may    well    have   qualified    for    a

discharge if he had not lied about the transferred assets.                         In

that       case,   Jordan   Oil   still    would    have   been     “dragged    into

bankruptcy court” and incurred attorneys’ fees to protect its

judgment.

       To drive the point home, consider 18 U.S.C. § 157, which

criminalizes the filing of a bankruptcy petition in connection

with a scheme to defraud. 3               Had Abdelbary been convicted of

violating      that     provision,   the    government      would    have   had    an

arguable case that all of the fees Jordan Oil incurred in the

bankruptcy proceedings were attributable to Abdelbary, as the

very filing of a bankruptcy petition would have constituted his

offense      conduct,    and   the   entire      proceedings     would   have   been

tainted.       But Abdelbary was neither charged with nor convicted

of violating 18 U.S.C. § 157, and, under this court’s precedent,

there is no basis for ordering restitution for conduct for which

he was not convicted.

       3
       “A person who, having devised or intending to devise a
scheme or artifice to defraud and for the purpose of executing
or concealing such a scheme or artifice or attempting to do so
. . . files a petition under title 11 . . . shall be fined under
this title, imprisoned not more than 5 years, or both.”       18
U.S.C. § 157(1).

                                          24
      I    recognize        that    Abdelbary’s           untruthfulness      may      have

exacerbated the fees Jordan Oil had to expend to defend its

interests      in    bankruptcy.         Perhaps      Abdelbary’s     petition        would

have been dismissed much earlier had he not misrepresented his

financial affairs, thus saving Jordan Oil time and expense.                             But

the   government         never      attempted        to     demonstrate      a      causal

connection       between     Abdelbary’s       fraudulent       statements       and   the

aggravation of Jordan Oil’s fees, and the district court made no

factual findings to that effect. 4                In other words, the government

failed    to     show    that      “even    had     [Abdelbary]     been    completely

truthful       about    these      matters,       [Jordan    Oil]   would     not      have

suffered    the      same   harm.”         Freeman,    2014 WL 185572,      at    *10.

Because    the      district     court     clearly    erred    when   it    found      that

Abdelbary’s criminal conduct directly and proximately caused all

of Jordan Oil’s attorneys’ fees, I would reverse that portion of

the   district         court’s      judgment       ordering     Abdelbary        to    pay

$84,079.35 in restitution.

      I respectfully dissent.

      4
       Jordan Oil also incurred fees representing the interests
of other creditors during the bankruptcy proceedings. See J.A.
470 (“Jordan Oil . . . took the lead in objecting to Defendant’s
discharge for the benefit of itself and Defendant’s other
creditors. . . . [N]o other creditors objected to Defendant’s
discharge.   Jordan Oil bore the burden and expense for the
benefit of all . . . .”).    I do not believe Abdelbary can be
responsible for the fees Jordan Oil voluntarily incurred
defending other creditors’ debts.

                                             25