United States v. Shawn Swor
2013 U.S. App. LEXIS 17852
| 9th Cir. | 2013Background
- Swor, a mortgage broker, helped found DTF Consulting Group in Feb 2008 with Dan Two Feathers and Terrence Paulin to promote leveraged investment schemes.
- DTF used a fraudulent $1.5 billion letter of credit to entice investors and promoted extremely high returns.
- Swor introduced Eric Schultz to Two Feathers in Mar 2008; Schultz did not immediately invest but remained in contact.
- DTF collapsed after the letter of credit episode; Swor severed ties with Two Feathers and Paulin in Jun 2008, and Swor had personally received about $208,018 from DTF investors.
- Two Feathers later promoted a new front entity, TLT Holdings; Schultz invested $200,000 in TLT; Schultz’s investors were harmed in that scheme.
- Swor pled guilty to one count of investment fraud; the district court ordered $747,345.11 in MVRA restitution; the court’s causal linking to Schultz’s losses and Swor’s role were challenged on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Swor’s restitution may include Schultz’s losses from the TLT scheme. | The loss was caused by Swor’s introduction of Schultz to Two Feathers, creating the but-for link. | The chain is too attenuated due to intervening events and a separate, later scheme. | Abuse of discretion; vacate the restitution amount and remand to amend not to exceed $580,548.02. |
| Whether Swor qualified for a minor role reduction. | Swor’s conduct was not minor compared to others in the scheme. | Swor’s role was insufficiently egregious to deny a minor role reduction. | Swor did not establish minor role; sentence affirmed in part, vacated in part, and remanded. |
Key Cases Cited
- United States v. Lazarenko, 624 F.3d 1247 (9th Cir. 2010) (restitution context; governs how to calculate proximate causation and causation limits)
- United States v. Gamma Tech Indus., Inc., 265 F.3d 917 (9th Cir. 2001) (causal nexus must be direct and not too attenuated)
- United States v. Kennedy, 643 F.3d 1251 (9th Cir. 2011) (proximate cause for restitution; but-for is insufficient; require direct proximate link)
- United States v. Vaknin, 112 F.3d 579 (1st Cir. 1997) (causal chain must be direct; intervening events matter)
- United States v. Speakman, 594 F.3d 1165 (10th Cir. 2010) (proximity and causation in MVRA restitution context)
- United States v. Robertson, 493 F.3d 1322 (11th Cir. 2007) (causal linkage for restitution; intervening acts considered)