United States v. Gregory Fair
403 U.S. App. D.C. 39
| D.C. Cir. | 2012Background
- Fair pled guilty to copyright infringement and mail fraud for selling pirated Adobe software on eBay with upgrade codes.
- He earned approximately $1.4 million from these sales; offense level anticipated between $400,000 and $1 million for guideline purposes.
- MVRA restitution was ordered to Adobe Systems for the victim’s losses; district court set restitution at $743,098.99 after subtracting seized funds.
- Government presented a spreadsheet of over 7,000 sales totaling $767,465.99 as a ‘reasonable calculation of restitution’; Fair argued for actual loss, not his gain.
- Fair contended MVRA requires actual loss and urged offset of costs or potential benefits to Adobe; government argued losses include other harms but did not quantify actual loss.
- Court vacated the restitution order, holding the government failed to prove the victim’s actual loss or that Fair’s gain reasonably estimated that loss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| MVRA requires actual loss, not defendant’s gain | Fair: restitution must reflect actual loss, not gain. | Fair: government may not substitute gain for loss. | MVRA requires actual, provable loss, not defendant's gain. |
| Whether the government proved Adobe's actual loss | Adobe: loss can be inferred from diverted sales and profits. | Government lacked data on diverted sales and margins. | Insufficient evidentiary basis to determine Adobe's actual loss. |
| Whether Fair’s restitution could be based on his gross revenue | Restitution may use revenue as proxy for loss. | Gross receipts do not equal victim’s actual loss; cannot rely on gain. | Restitution cannot be based on Fair’s gross revenue under MVRA. |
| Remand scope for restitution | Remand may allow new evidence for actual loss. | Remand should be on existing record; no new evidence unless special circumstances. | No special circumstances for reopening record; vacate restitution. |
Key Cases Cited
- United States v. Papagno, 639 F.3d 1093 (D.C. Cir. 2011) (MVRA is compensatory; government bears burden to prove loss)
- United States v. Singletary, 649 F.3d 1212 (11th Cir. 2011) (requires factual articulation of losses for appellate review)
- United States v. George, 403 F.3d 470 (7th Cir. 2005) (loss-based restitution; victim’s loss not defendant’s gain)
- Chalupnik, 514 F.3d 748 (8th Cir. 2008) (victim’s actual loss must be proven; profits not substitute loss)
- United States v. Beydoun, 469 F.3d 102 (5th Cir. 2006) (diverted-sales theory; actual loss requires proof of diverted profits)
- United States v. Hudson, 483 F.3d 707 (10th Cir. 2007) (lost profits on displaced sales as loss; gross proceeds inappropriate)
- United States v. Kuo, 620 F.3d 1158 (9th Cir. 2010) (clear MVRA limitations; burden on government to prove actual loss)
- United States v. Leonzo, 50 F.3d 1086 (D.C. Cir. 1995) (remand limits; no second bite at the apple without special circumstances)
- United States v. Whren, 111 F.3d 956 (D.C. Cir. 1997) (remand procedures; waiver/no new arguments unless relevant to remand)
- United States v. McCoy, 313 F.3d 561 (D.C. Cir. 2002) (contextualizes remand limits under Whren and related rules)
- United States v. Yeung, 672 F.3d 594 (9th Cir. 2012) (distinction between MVRA loss and guideline calculations)
- United States v. Gallant, 537 F.3d 1202 (10th Cir. 2008) (MVRA requires actual loss; avoid relying on profit)