ORDER
The opinion filed November 3, 2010 [
On slip opinion page 18160 [624 F.3d at 1250 ], replace footnote 3 with the following: “The government filed an information against Kiritchenko. As part of a plea deal, he testified for the government at Lazarenko’s trial.”
With this amendment, Kiritehenko’s petition for rehearing is DENIED. The current deadline for filing petitions for rehearing and rehearing en banc remains in effect.
OPINION
Defendant Pavel Ivanovich Lazarenko, former Prime Minister of Ukraine, was convicted of money laundering and conspiracy to commit money laundering.
See United States v. Lazarenko,
FACTUAL AND PROCEDURAL HISTORY
This appeal is the latest in a series related to Lazarenko’s now-infamous exploitation of his political power in Ukraine.
See Lazarenko,
In a proceeding separate from the main sentencing proceeding, Kiritchenko sought restitution under the Mandatory Victims Restitution Act of 1996 (“MVRA”), 18 U.S.C. § 3663A, and the Victim and Witness Protection Act of 1982 (“VWPA”), 18 U.S.C. § 3663 (collectively, “restitution statutes”). 1 Lazarenko opposed restitution. The government appearеd at the proceedings but repeatedly declined to provide input. As noted by the district court, the government “neither endorsefd] nor objected] to Kiritchenko’s request for restitution.”
The district court held that Kiritchenko was a “victim” under the MVRA and VWPA and therefore was entitlеd to restitution. The court ordered Lazarenko to pay Kiritchenko more than $19 million in restitution. Lazarenko timely appeals. On appeal, the government now opposes restitution.
STANDARDS OF REVIEW
“A restitution order is reviewed for an abuse of discretion, provided that it is within thе bounds of the statutory framework. Factual findings supporting an order of restitution are reviewed for clear error. The legality of an order of restitution is reviewed de novo.”
United States v. Marks,
DISCUSSION
The MVRA provides that, “when sentencing a defendant convicted of an offense described in subsection (c), the court shall order, in addition to ... any other penalty authorized by law, that the defendant make restitutiоn to the victim of the offense.” 18 U.S.C. § 3663A(a)(l). 2 Subsec *1250 tion (c) describes, among other crimes, “an offense against property under this title, ... including any offense committed by fraud or deceit.” Id. § 3663A(c)(l)(A)(ii). The parties (and we) all agree that Lazarenko’s convictions qualify as an offense аgainst property. The question, then, is whether Kiritchenko qualifies as a “victim.”
Kiritchenko’s relationship to Lazarenko’s criminal activity is somewhat complex. According to the government, Lazarenko used his political power to crush Kiritchenko’s business competition. In exchange, Kiritchenko paid Lazarenko kickbacks from his enormous profits. Both profited handsomely from the arrangement. The government’s indictment charged Lazarenko with conspiring to launder money with Kiritchenko, and the jury found the existence of that cоnspiracy. 3 As part of the proof of money laundering, however, the government was required to prove that Lazarenko obtained the money through some specified unlawful conduct. The government alleged, and the jury found, that Lazarenko obtained the money illegally by means of extortion: Lazarenko extorted money from Kiritchenko. 4 In sum, in the money-laundering scheme, Kiritchenko was both a victim and a participant.
This situation is exceedingly rare. With most crimes, a person is plainly either a victim or a co-conspirator (or neither). It is only in the most unusual circumstances that a person can be considered to be both at the same time. We turn, then, to the bizarre question whether Kiritchenko — a co-conspirator in the crimes of conviction — is nevertheless also a “victim” under the restitution statutes.
Perhaps because the situation is so unusual, the restitution statutes do not speak to this issue. The MVRA defines the term “victim” as follows:
For the purposes of this section, the term “victim” means a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant’s criminal conduct in the coursе of the scheme, conspiracy, or pattern.
18 U.S.C. § 3663A(a)(2). 5 That definition looks only to whether the person was harmed; it does not consider whether the person also was a co-conspirator. Under the plain text of the MVRA and VWPA, therefore, co-conspiratоrs have just as much right to restitution as do innocent victims.
*1251
But courts have recognized that Congress could not have intended that result. Otherwise, the federal courts would be involved in redistributing funds among wholly guilty co-conspirators, where one or more co-conspirators may hаve cheated their comrades. Indeed, the Second Circuit has held that an order of restitution from one co-conspirator to another was “an error so fundamental and so adversely reflecting on the public reputation of the judicial procеedings that we may, and do, deal with it
sua sponte.” United States v. Reifler,
The question, then, is the scope of restitution to a co-conspirator. Guided by our decision in
Sanga,
In Sanga, the defendant was convicted of a conspiracy to smuggle aliens from the Philippines to Guam. Id. The district court ordered restitution to one of the aliens whom the defendant had smuggled, named Quinlob, and the defendant appealed. Id. at 1333-34. After Quinlob arrived in Guam, the defendant instructed her that she would be his live-in maid. Id. at 1334. When she said that she wished to return to the Philippines instead, he took away her passport and airline ticket and threatened to kill her. Id. at 1334-35. After two years of servitude, “working аpproximately fourteen hours a day, seven days a week,” the defendant “forced her to have sex with him” so that, in exchange, she could work elsewhere. Id. at 1335.
The defendant argued that, as co-conspirator to the alien smuggling, Quinlob was not entitled to restitution.
Id.
at 1333-34. We agreed that Quinlob was a very limited co-conspirator, having agreed to, and having acted to facilitate, her own smuggling into Guam.
Id.
at 1334-35. But we found that, considering all the facts of that case, Quinlob was not barred from recovery simply by virtue of having been a co-conspirator initially. We noted that “Quinlob was not named as a conspirator in the indictment.”
Id.
at 1334. And we held that “[a]ny criminal complicity in the conspiracy which Quinlob might bear stopped at the point at which she became the object of, rather than a particiрant in[,] the criminal goals of the conspirators.”
Id.
at 1335. Because Quinlob “did not willingly participate in the criminal behavior by which she was victimized,” we distinguished the dicta in
Weir,
*1252 Kiritchenko latches onto our statement that Quinlob could receive restitution because she “did not willingly participate in the criminal behavior by which she was victimized.” Id. Kiritchenko argues that, because he did not willingly participate in Lazarenko’s extоrtion (of Kiritchenko), then he is entitled to restitution, just as Quinlob was entitled to restitution for the defendant’s post-smuggling mistreatment of her. More generally, Kiritchenko argues that we should adopt the rule that a co-conspirator/victim is entitled to restitution whenever the harm arоse from criminal conduct in which he or she did not participate. We disagree.
Our decision in Sanga did not hinge solely on Quinlob’s non-participation in the victimizing behavior. Our analysis was informed by the fact that Quinlob was not named as a co-conspirator in the indictment; that she had a very minor role in the conspiracy; and that her persecution began after the completion of her small part of the conspiracy. Although she was technically a co-conspirator, her very small role was unconnected to the overall conspiracy; indeed, had she known the full extent of the conspiracy — that she would be forсed to be a slave and rape victim— she would not have entered the conspiracy.
Here, by contrast, the government named Kiritchenko as the primary co-eonspirator in the indictment. Kiritchenko willingly participated in most of the conspiracy, unlike in
Sanga.
Indeed, Kiritchenko knowingly participated in the conspiracy even though he knew that his own
past
“victimization” was the basis of the laundered money, unlike in
Sanga,
where Quinlob immediately sought to withdraw from the conspiracy and return to the Philippines once she discovered the true purpose of the conspiracy. And Kiritchenko, unlike Quinlob, profited greatly from the overall criminal enterprise.
Cf. United States v. Hunter,
We agree with the Second Circuit that, as a generаl rule, an order of restitution to a co-conspirator is a “fundamental” error that “adversely reflects] on the public reputation of the judicial proceedings.”
Reifler,
We hold that, as а general rule, a participant in a crime cannot recover restitution. The circumstances here do not constitute exceptional circumstances warranting departure from that general rule. Accordingly, we reverse the district court’s decision to the contrary, and we vacate the restitution order.
REVERSED; restitution order VACATED.
Notes
. There are other restitution statutes, including the Crime Victims’ Rights Act, 18 U.S.C. § 3771. Except where otherwise noted, we use the term "restitution statutes” to refer to the MVRA and the VWPA only.
. The VWPA uses similar text but, instead of the mandatory phrase "shall order ... restitution,” 18 U.S.C. § 3663A, the VWPA instructs that the court "may order ... restitution,” 18 U.S.C. § 3663. The definition of the term “victim” is the same for both statutes.
United
*1250
States v. Brock-Davis,
. The government filed an information against Kiritchenko. As part of aplea deal, he testified for the government at Lazarenko’s trial.
. The district court found that Kiritchenko was not a willing participant in thе extortion, and that factual finding is not clearly erroneous.
.Lazarenko argues that money laundering generally is considered a victimless crime but, even if that assertion is true in some sense, the restitution statutes define "victim” broadly.
See Brock-Davis,
. Kiritchenko points out that the VWPA limits restitution for victims of certain drug crimes with the following сlause: "in no case shall a participant in an offense under such sections be considered a victim of such offense under this section.” 18 U.S.C. § 3663(a)(1)(A). There is no conflict between that clause and Lazarenko’s interpretation of the statute as generally barring restitution for participants of crimes, except in rare circumstances. The quoted clause means that, for those specified drug crimes, there is no exception for rare circumstances: All participants, even minor participants, are barred from restitution. The quoted clause is not superfluous and does not change the (undisputed) fact that the plain text of the MVRA leads to the absurd result that federal courts would redistribute funds among co-conspirators.