United States v. Zangari
2012 U.S. App. LEXIS 7847
| 2d Cir. | 2012Background
- Zangari, a securities broker, participated in stock-loan schemes involving Paloma and SASI, with Clinton Management as finder; kickbacks flowed to Zangari via Sherlock.
- The Information charged conspiracy to violate the Travel Act; Zangari pleaded guilty and forfeited $65,600, with restitution to be determined by the district court.
- The PSR used Zangari's gain from kickbacks as the measure of loss for both sentencing guideline calculations and MVRA restitution.
- The district court imposed restitution of $65,600, based on Zangari's gain, and entered judgment.
- On appeal, Zangari argued restitution was improper because victims suffered no loss; the government urged the PSR-supported gain approach as loss.
- The Second Circuit held that restitution may not be based on the defendant's gain; however, because the error was unpreserved, the court declined to correct it under Rule 52(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May MVRA restitution use the defendant's gain as loss? | Zangari | Zangari | No; restitution may not substitute gain for loss. |
| Is there a direct correlation between the victim's loss and the defendant's gain here? | GOV | Zangari | No direct correlation; gains cannot measure losses for restitution. |
| If error exists in restitution, is it plain error warranting correction under Rule 52(b)? | GOV | Zangari | Yes, the error was plain, but not corrected because the burden of demonstration for prejudice was not met. |
Key Cases Cited
- United States v. Boccagna, 450 F.3d 107 (2d Cir. 2006) (restoration must reflect actual loss, not gain)
- United States v. Marino, 654 F.3d 310 (2d Cir. 2011) (restitution tied to victim's actual loss)
- United States v. Germosen, 139 F.3d 120 (2d Cir. 1998) (VWPA restitution requires actual loss showings)
- Harvey v. United States, 532 F.3d 326 (4th Cir. 2008) (defendant's gain cannot substitute for loss for restitution)
- United States v. Pescatore, 637 F.3d 128 (2d Cir. 2011) (unpreserved error review under Olano framework)
- Marcus v. United States, 130 S. Ct. 2159 (2010) (plain error review requires four Olano prongs)
- Olano v. United States, 507 U.S. 725 (1993) (defining standard for plain error under Rule 52(b))
- United States v. Liu, 200 Fed. Appx. 39 (2d Cir. 2006) (restoration analyses in prior VWPA guidance; not controlling here)