United States v. Smathers
879 F.3d 453
| 2d Cir. | 2018Background
- In 2005 Jason Smathers pleaded guilty to conspiring to steal and sell an AOL customer list; he was sentenced and ordered to pay $84,000 restitution (court calculated by trebling Smathers’s $28,000 sale), though the judgment also listed total loss as $300,000.
- AOL pursued civil litigation (the Hawke matter) against other spammers (including Bournival and Hawke) and obtained settlements/default judgments and some collections (reports referenced ~$95,000 and a Hummer), though Smathers was not a party to that civil suit.
- Smathers sought, first in 2007 and later in 2015–2016, credit against his criminal restitution under 18 U.S.C. § 3664(j)(2) for amounts AOL recovered from third parties, alleging those recoveries compensated the same loss he caused.
- The district court in 2007 allowed Smathers to file a motion with affidavits/competent proof; Smathers did not supply evidentiary support until his 2016 pro se motion, which contained no competent proof tying civil recoveries to Smathers’s specific loss or showing AOL was fully compensated.
- The government opposed, noting Smathers bore the burden to prove entitlement to credit; the district court denied Smathers’s 2016 motion as unsubstantiated, finding no showing recoveries were for the same loss or that AOL was fully compensated.
- Smathers appealed, arguing the district court erred in placing the burden on him and in denying a hearing; the Second Circuit affirmed.
Issues
| Issue | Smathers' Argument | Government/Court Argument | Held |
|---|---|---|---|
| Whether district court erred by placing burden on defendant to prove civil recoveries were for same loss and equaled/exceeded his loss | Burden should be on government to show credits do not apply; defendant argued court imposed "full burden" on him | MVRA assigns certain burdens to government but permits court to allocate other burdens; defendant seeking offset has the affirmative goal and access to proof | Court affirmed: district court did not abuse discretion in placing burden on Smathers to prove offsets |
| Whether AOL's civil recoveries reduced or extinguished Smathers's restitution | Recoveries (reports of settlements/default judgments and collections) compensated same loss and exceed $84,000, so restitution should be reduced/eliminated | No competent proof linking those civil recoveries to the specific loss caused by Smathers or showing AOL was fully compensated for Smathers-caused loss | Court held Smathers failed to show civil recoveries were for the same loss or that AOL was fully compensated; no credit granted |
| Whether the June 2016 order denying credit was appealable (final) | N/A (jurisdictional challenge implicit) | A denial based on lack of proof that terminates the motion is a final, appealable order under §1291 | Court held the June 2016 Order was final and appealable |
| Whether district court erred by denying hearing or otherwise acting unfairly | Requested appointment of counsel and hearing to develop proof; argued lack of fairness | Court had previously instructed Smathers to submit affidavits/evidence and he repeatedly failed to do so; record allowed denial without further hearing | Court held no abuse: denial without further hearing was appropriate given lack of competent evidence |
Key Cases Cited
- United States v. Nucci, 364 F.3d 419 (2d Cir.) (MVRA interpreted to prevent victim recovering more than actual loss)
- United States v. Elson, 577 F.3d 713 (6th Cir.) (burden of proving offsets lies with defendant seeking credit)
- United States v. Stanley, 309 F.3d 611 (9th Cir.) (MVRA does not permit duplicative recovery)
- United States v. Dawson, 250 F.3d 1048 (7th Cir.) (limitations on cumulative recoveries under MVRA)
- United States v. Boccagna, 450 F.3d 107 (2d Cir.) (deferential abuse-of-discretion review of restitution orders)
- United States v. Reifler, 446 F.3d 65 (2d Cir.) (standards for reviewing restitution orders)
- United States v. Yalincak, 853 F.3d 629 (2d Cir.) (orders granting §3664(j)(2) credit can be final and appealable when they conclusively determine entitlement)
- United States v. Sheinbaum, 136 F.3d 443 (5th Cir.) (defendant bears burden to prove offsets he provided)
- United States v. Malone, 747 F.3d 481 (7th Cir.) (defendant best positioned to prove returned compensation)
- United States v. McGinn, 787 F.3d 116 (2d Cir.) (credit inappropriate until victim actually receives offsetting funds)
- United States v. Technodyne LLC, 753 F.3d 368 (2d Cir.) (party with affirmative goal and access to proof typically bears burden)