United States v. Youssef Abdelbary
2014 U.S. App. LEXIS 4504
| 4th Cir. | 2014Background
- Abdelbary owned a gas station, incurred a ~$250,000 judgment from supplier Jordan Oil, then engaged in cash withdrawals and credit-card transactions to avoid detection; he later filed bankruptcy and made false statements about transfers and gifts.
- He was convicted on multiple counts including bankruptcy fraud and perjury; some convictions were previously reinstated on appeal.
- At sentencing the district court ordered criminal forfeiture and, under the Mandatory Victim Restitution Act (MVRA), required Abdelbary to pay Jordan Oil $84,079.35 for attorneys’ fees incurred in the bankruptcy proceedings.
- Abdelbary argued attorneys’ fees are not recoverable restitution under the MVRA (relying on Mullins and the “American Rule”) and alternatively that Jordan Oil was not a victim because Abdelbary failed to obtain a discharge.
- The district court found (and Abdelbary did not dispute) that Jordan Oil incurred the fees as a direct and proximate result of Abdelbary’s bankruptcy fraud and ordered restitution under § 3663A(b)(1).
- The Fourth Circuit affirmed, holding that attorneys’ fees can be included under the MVRA where the fees were the direct and proximate result of the offense (not merely consequential).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorneys’ fees incurred in bankruptcy proceedings may be awarded as restitution under the MVRA | Government: yes — no blanket prohibition; fees are recoverable if directly and proximately caused by the crime (here, fees arose from defending against Abdelbary’s bankruptcy-fraud in the same proceeding). | Abdelbary: no — attorneys’ fees are nonrecoverable consequential damages (Mullins/American Rule); Jordan Oil not a “victim” because Abdelbary’s bankruptcy filing (not his false statements) caused the fees. | Affirmed: fees are recoverable under MVRA § 3663A(b)(1) when they are the direct and proximate result of the offense (not merely consequential). |
Key Cases Cited
- United States v. Mullins, 971 F.2d 1138 (4th Cir. 1992) (VWPA restitution cannot include consequential damages like attorney fees for recovering stolen property)
- Hughey v. United States, 495 U.S. 411 (1990) (restitution limited to losses caused by the conduct underlying the offense)
- United States v. Elson, 577 F.3d 713 (6th Cir. 2009) (attorney fees are recoverable under MVRA when incurred due to illegal acts during the civil proceeding that form the basis of the criminal conviction)
- United States v. DeGeorge, 380 F.3d 1203 (9th Cir. 2004) (VWPA restitution may include civil-trial expenses where defendant’s perjury and other conduct during the civil trial directly relate to the offense)
- United States v. Mikolajczyk, 137 F.3d 237 (5th Cir. 1998) (costs of defending a fraudulent civil suit are a direct result of the underlying offense and may be recoverable)
- United States v. Havens, 424 F.3d 535 (7th Cir. 2005) (MVRA restitution can include fees paid to repair identity-related harm where fees directly relate to the offense)
- United States v. Scott, 405 F.3d 615 (7th Cir. 2005) (distinguishing criminal restitution from common-law damages)
- United States v. Wilkinson, 590 F.3d 259 (4th Cir. 2010) (MVRA requires restitution equal to actual loss directly and proximately caused by the offense)
- United States v. Freeman, 741 F.3d 426 (4th Cir. 2014) (restitution limited to losses caused by the elements and specific conduct underlying the offense of conviction)