Lagos v. United States
138 S. Ct. 1684
SCOTUS2018Background
- Sergio Lagos ran Dry Van Logistics and used false invoices to obtain loans from General Electric Capital (GE). Dry Van later went bankrupt after the fraud was discovered.
- GE conducted a private investigation and participated in the bankruptcy proceedings, incurring nearly $5 million in professional fees (attorneys, accountants, consultants).
- Lagos pleaded guilty to federal wire fraud; the District Court ordered him to pay restitution to GE, including the $5 million in investigation and bankruptcy-related fees.
- The Fifth Circuit affirmed the restitution order, interpreting 18 U.S.C. §3663A(b)(4) to cover private investigation and civil/bankruptcy proceeding expenses.
- The Supreme Court granted certiorari to decide whether §3663A(b)(4)’s references to “investigation” and “proceedings” are limited to government investigations and criminal proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §3663A(b)(4) covers private investigation costs | Government: statute covers expenses "incurred during participation in the investigation . . . of the offense" and should include costs when victim shares results with prosecutors | Lagos: statute’s wording and context limit "investigation" to government criminal investigations; private-investigation costs not covered | Held: "investigation" means government criminal investigations; private investigation costs are not covered |
| Whether §3663A(b)(4) covers expenses from civil/bankruptcy proceedings related to the offense | Government: "proceedings related to the offense" can include noncriminal proceedings such as bankruptcy | Lagos: "proceedings" in context refers to criminal proceedings; civil/bankruptcy proceedings are not covered | Held: "proceedings" limited to criminal proceedings; civil/bankruptcy expenses not covered |
| Whether sharing private-investigation results with government makes those costs "incurred during participation in the investigation" | Government: sharing information links private-investigation costs to the government investigation, making them necessary expenses | Lagos: costs incurred before participation in any government investigation are not "incurred during participation" and thus not covered | Held: merely sharing results does not convert preparticipation private-investigation costs into reimbursable government-investigation expenses |
| Whether a broad reading is required by the MVRA’s remedial purpose | Government: MVRA’s purpose is full restitution; ambiguity should favor victims | Lagos: statute’s text, structure, and categories show Congress limited covered items; other statutes provide broader language when intended | Held: remedial purpose does not override the statute’s textual limits; MVRA lists specific covered expenses and is to be read narrowly |
Key Cases Cited
- United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (1906) (syllabus is not part of Court’s opinion)
- Dolan v. United States, 560 U.S. 605 (2010) (discussing MVRA purpose to ensure victims receive restitution)
- Yates v. United States, 574 U.S. _ (2015) (use of noscitur a sociis to construe statutory terms)
- United States v. Papagno, 639 F.3d 1093 (D.C. Cir. 2011) (MVRA §3663A(b)(4) does not cover private investigation costs)
- United States v. Elson, 577 F.3d 713 (6th Cir. 2009) (held MVRA coverage extends to private investigation costs)
- United States v. Hosking, 567 F.3d 329 (7th Cir. 2009) (broad reading covering private costs)
- United States v. Stennis-Williams, 557 F.3d 927 (8th Cir. 2009) (broad reading covering noncriminal proceedings)
- United States v. Amato, 540 F.3d 153 (2d Cir. 2008) (broad reading of §3663A(b)(4))
- United States v. Gordon, 393 F.3d 1044 (9th Cir. 2004) (broad reading of statute)