United States v. Ferdman
2015 U.S. App. LEXIS 2346
| 10th Cir. | 2015Background
- Ferdman and three co-conspirators stole Sprint phones by impersonating corporate account representatives at Sprint stores in AZ, CA, and NM, then resold some phones; Ferdman was arrested after a May 2011 Albuquerque incident.
- Ferdman pleaded guilty to conspiracy and substantive offenses under 18 U.S.C. §§ 371 and 1029; district court sentenced him to 15 months custody.
- The district court ordered restitution under the MVRA of $48,715.59 to Sprint, calculated from Sprint’s asserted “retail unsubsidized price” for 86 phones (plus shipping and investigative costs).
- Sprint’s loss claim was submitted to probation as an unsworn two‑page letter and sales receipts; no affidavits, invoices, or documentary proof of replacement/wholesale cost or lost sales/profits were provided.
- Ferdman objected and requested an evidentiary hearing, arguing Sprint’s replacement/wholesale cost (not retail price) better approximated actual loss; the court denied the hearing and adopted the PSR.
- The Tenth Circuit vacated the restitution award and remanded, holding the Government failed to meet its MVRA burden to prove actual loss by a preponderance of the evidence.
Issues
| Issue | Plaintiff's Argument (Government/Sprint) | Defendant's Argument (Ferdman) | Held |
|---|---|---|---|
| Whether retail unsubsidized price of stolen goods is an appropriate measure of "value" under the MVRA absent proof of lost sales or profits | Retail price is an appropriate measure for stolen retail merchandise and the PSR/receipts support that value | Retail price overstates Sprint’s actual loss; replacement/wholesale cost (or other proof) is the proper measure absent proof that Sprint lost retail sales/profits | Court vacated restitution: Government must prove actual loss; unsworn letter + receipts insufficient to show lost retail sales or profits |
| Whether the Government satisfied its burden of proof under 18 U.S.C. § 3664(e) when the PSR relied on an unverified Sprint letter and receipts | PSR and Sprint’s statement provide sufficient evidence; an evidentiary hearing unnecessary | Government failed to meet its burden; requested evidentiary hearing was required | Held that the Government failed to present adequate evidence; denial of evidentiary hearing and restitution award was an abuse of discretion |
| Whether estimated investigative, travel, shipping, and GPS costs may be awarded based on Sprint’s estimates in an unverified letter | Those estimated costs reasonably flow from the offense and may be included | Estimates are unsubstantiated; may duplicate retail valuation; need documentary support | Held estimates unsupported by affidavits/receipts are insufficient; Government must substantiate such expenses |
| Whether a district court may infer lost retail sales for fungible goods from mere fact of theft without proof of supply‑chain impact | Government: theft of items from retail prevents their sale to others; courts may use retail price | Ferdman: phones are fungible and readily replaceable; without proof of depletion or diverted sales, retail value is speculative | Held that for fungible/replacable goods, the Government must present some evidence of lost sales or supply‑chain impact; otherwise replacement/wholesale cost is the more accurate measure |
Key Cases Cited
- Paroline v. United States, 134 S. Ct. 1710 (2014) (describing restitution as primarily remedial and emphasizing MVRA proof requirements)
- United States v. Shengyang Zhou, 717 F.3d 1139 (10th Cir. 2013) (standards of review for MVRA restitution)
- United States v. James, 564 F.3d 1237 (10th Cir. 2009) (MVRA requires restitution be based on victim’s actual loss)
- Hughey v. United States, 495 U.S. 411 (1990) (restitution aims to restore victims to pre‑loss position)
- United States v. Gallant, 537 F.3d 1202 (10th Cir. 2008) (MVRA allows reasonable determination rooted in actual loss; distinguishes Guidelines loss estimates)
- United States v. Hudson, 483 F.3d 707 (10th Cir. 2007) (counterfeit‑goods restitution must be based on net lost profits, not total retail price; government must prove actual loss)
- United States v. Wilfong, 551 F.3d 1182 (10th Cir. 2008) (discussing valuation approaches for stolen retail goods)
- United States v. Fair, 699 F.3d 508 (D.C. Cir. 2012) (Government bears burden to prove actual loss under MVRA)
- Illinois Cent. R.R. Co. v. Crail, 281 U.S. 57 (1930) (for fungible goods, market value is convenient but replacement/wholesale cost may be more accurate)