UNITED STATES оf America, Plaintiff-Appellee, v. Robert S. GORDON, Defendant-Appellant.
No. 03-10322.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted July 15, 2004. Filed Dec. 30, 2004.
Before: FERNANDEZ, PAEZ, and CLIFTON, Circuit Judges. CLIFTON, Circuit Judge:
In contrast, Rutherford initiated the killing of Benjamin by strangling, and Beardslee assisted. The most logical explanation for the split verdict is that the jurors considered the mitigating factors significant as to the crime in which Rutherford was present, but did not consider those factors sufficiently mitigating for Geddling‘s murder, when Rutherford was absent. However, we need not resort to inference or conjecture. The plain fact is that the jury differentiated between the circumstances surrounding the two crimes; therefore, it was the difference between the crimes that was crucial, not the commonality of any particular aggravating factor. As such, it is not possible to conclude that the common special circumstance of witness-killing was a substantial factor in the jury‘s decision to impose the death penalty for the murder of Geddling but not for the murder of Benjamin.
For these reasons, we are not left with grave doubt about whether the jury‘s consideration of the invalid special circumstances had a substantial and injurious effect on the jury‘s verdict. Even if the two witness-killing and one multiple-murder special circumstances had been removed from consideration, as they should have been, the presentation of evidence and argument during the penalty phase would not have been materially different. Further, the jury‘s verdict of life without parole for one murder and the imposition of the death penalty for the other indicates that the invalid special circumstance applicable to both crimes did not substantially influence the jury‘s ultimate verdict. We affirm the judgment of the district court denying Beardslee‘s petition for a writ of habeas corpus.
AFFIRMED.
Kevin V. Ryan, San Jose, CA; Hannah Horsley, San Jose, CA; and David R. Callaway, San Jose, CA, for the plaintiff-appellee.
CLIFTON, Circuit Judge:
This case presents the disappointing story of a promising federal appellate law
The primary and overarching goal of the MVRA is to make victims of crime whole. In achieving this objective, Congress intended district courts to engage in an expedient and reasonable restitution process, with uncertainties resolved with a view toward achieving fairness to the victim. Guided by these principles, we hold that the district court‘s restitution analysis for the embezzled shares, including its fairly sophisticated “date of the loss” calculation, was not an abuse of discretion. Nor did the district court abuse its discretion in declining to account for brokerage house commissions or for awarding restitution for costs incurred by Cisco during its participation in the criminal investigation. Finally, we conclude that the district court did not abuse its discretion in awarding prejudgment interest in regards to the embezzled cash and shares of the companies Terayon and Cabletron. The district court did, however, abuse its discretion in awarding prejudgment interest for the other embezzled securitiеs. We therefore affirm in part, reverse in part, and remand for entry of a new order of restitution.
I. BACKGROUND
A. Statutory Framework
The MVRA makes restitution mandatory for particular crimes, including those offenses which involve fraud or deceit. See
B. Factual Background and Procedural History
Robert Gordon attended Stanford Law School, where he was an associate managing editor of the Stanford Law Review. Upon graduating from law school, Gordon served as a law clerk for a judge on the U.S. Court of Appeals for the Seventh Circuit. Prior to his employment at Cisco,
Gordon was employed at Cisco from September 1995 to April 2001. He started at Cisco as a director in the Corporate Finance Department and, in 1999, transferred to the Business Development Group. Through late 1997 until April 2001, Gordon obtained stock certificates from companies in which Cisco had acquired an interest and, instead of depositing those certificates with Cisco‘s treasury department, transferred them to two brokerage accounts he had established. He then sold the embezzled shares and used the proceeds to make stock trades using information gained from his insider position with Cisco.
In addition, under Gordon‘s guidance, Cisco loaned $15 million to Spanlink, a start-up company in which Cisco had previously invested. Cisco was not aware, however, that Gordon personally had previously lent Spanlink $5 million, posing as a venture capital investor and using funds previously embezzled by him from Cisco, and that Gordon had received 50,000 shares of Spanlink “Series B” Preferred Stock in return for arranging that loan. After Spanlink received the $15 million, Gordon redeemed the preferred shares for $10 million, turning a $5 million profit for himself.
In April 2001, Cisco discovered that shares were missing from one of the accounts from which Gordon had embezzled stock. Cisco‘s officers spoke to Gordon about the missing shares. They asked him for his laptop computer. Gordon said his laptop was at home, but he agreed to bring it to Cisco the following day. Gordon was told that he should not erase anything from the hard drive. Yet as confirmed by subsequent forensic analysis, Gordon went home that night and used an “evidence eliminator” software program to delete files from his computer. Further analysis established that Gordon had run that program at least five times to overwrite deleted files.
Discovering that Gordon had embezzled certain shares, Cisco launched an internal investigation to determine the extent of the embezzlement. This involved identifying all the transactions in which Gordon had been involved during his five years with the company. As a result of this investigation, Cisco identified five additional embezzlements totaling more than $13 million in losses to Cisco. Two of these embezzlements involved Cisco‘s investments in another technology company called Terayon.
In April 2001, the government charged Gordon with wire fraud, and in May 2001, an indictment alleging two counts of wire fraud was returned. Gordon pled guilty to a superseding information alleging two counts of wire fraud, one count of insider trading, and one count of forfeiture count. Under the plea agreement, Gordon agreed to pay restitution totaling $14,114,372.38 to Cisco and $343,173.40 to the government, and to forfeit the amounts alleged in the forfeiture count. Gordon also agreed to waive his right to appeal his “convictions, the judgment, and orders of the Court,” in addition to the right to appeal his sentence. The government reserved the right in the plea agreement to argue for additional restitution for Cisco‘s “lost opportunity” costs for the Terayon shares, investigation costs, and prejudgment interest.
The district court sentenced Gordon to a term of 66 months in prison. The court scheduled a further hearing pursuant to
- $12,593,902.23 for the embezzled Terayon shares;
- prejudgment interest of $2,424,913.32; and
- reimbursable investigation costs totaling $1,038,477.00.1
Both the Final Order of Restitution and Final Order of Forfeiture were incorporated into the Amended Judgment. Gordon timely appealed.
II. DISCUSSION
A. Waiver of Right to Appeal
We review de novo the question of whether a defendant has validly waived his statutory right to appeal. United States v. Anglin, 215 F.3d 1064, 1066 (9th Cir.2000). A defendant‘s right to appeal is statutory, rather than constitutional, in nature. Id. Knowing and voluntary waivers of appellate rights in criminal cases are “regularly enforce[d].” Id. “The sole test of a waiver‘s validity is whether it was made knowingly and voluntarily.” Id. at 1068; see also United States v. Baramdyka, 95 F.3d 840, 843 (9th Cir.1996) (noting that the “proper enforcement of appeal waivers serves an important function in the judicial administrative process by preserving the finality of judgments and sentences imposed pursuant to valid plea agreements“) (quotation marks and citation omitted).
The government argues that because Gordon waived the right to appeal the “orders of thе Court” in his plea agreement, he waived his right to appeal the restitution order. At Gordon‘s plea colloquy, the district court also emphasized its view that Gordon had waived the right to appeal the restitution order. We disagree. Gordon lacked sufficient notice to waive his right to appeal the restitution award. As we held in United States v. Phillips, 174 F.3d 1074 (9th Cir.1999), while “[i]t is true that a court can impose restitution when the plea agreement is silent as to the amount of restitution as long as the amount is based on actual damages[,] .... [a]llocating actual damages in this manner ... carries with it a requirement of notice to the defendant.” Id. at 1076. “Notice was absent in this case due to the ambiguous nature of the plea agreement.” Id. Gordon‘s “plea agreement was unclear about exactly what the amount of actual damages would be” for such contested issues as the embezzled Terayon shares, prejudgment interest, and investigation costs. Id. Gordon therefore did not waive his right to appeal these contested amounts.
Moreover, “[e]ven if [Gordon] had voluntarily and knowingly waived his general right to appeal, this wаiver would not affect his ability to appeal a violation of the [MVRA].” Id. A “restitution order which exceed[s] its authority under the [MVRA] is equivalent to an illegal sentence.” Id. (citation omitted). “[S]uch a restitution order [is] in excess of the maximum penalty provided by statute and, therefore, the waiver of appeal [is] inapplicable to it.” Id. (quotation marks omitted).
“A restitution order is reviewed for an abuse of discretion, provided that it is within the 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. Stoddard, 150 F.3d 1140, 1147 (9th Cir.1998) (citations omitted).
The largest item that Gordon challenges is the district court‘s restitution award for the embezzled Terayon shares. Gordon argues that in calculating Cisco‘s losses for the Terayon shares, the district court applied an incorrect “date of the loss” under the MVRA. He also contends that the district court erroneously disregarded the alleged fraudulent inflation of Terayon shares, which he posits constituted an “intervening cause” of Cisco‘s Terayon related loss. In addition, Gordon argues that the district court abused its discretion in failing to subtrаct brokerage house commissions costs from its restitution award, in including Cisco‘s investigation costs as part of its total losses, and in awarding prejudgment interest for the embezzled securities and cash.2
1. Terayon Shares
Cisco acquired 896,834 Terayon shares in 1995. In December 1998, Gordon, without Cisco‘s consent, sold short 54,525 of Cisco‘s Terayon shares. He deposited the $1,635,692 in proceeds from the sale into his brokerage account. In June 1999, Gordon embezzled an additional 100,000 Terayon shares from Cisco‘s account. He later deposited the shares into his brokerage account and eventually sold them for a total of $3,478,732.93.
a. “Date of the Loss” Provision
Before Gordon‘s embezzlement was discovered, Cisco sold all of its holdings of Terayon stock. Specifically, Cisco sold all of its shares between July 21, 1999 and March 6, 2001. During this period, the price of Terayon jumped from $46 per share on July 21, 1999 to a high of $285.26 per share on March 9, 2000.3 The stock price dramatically declined, however. On March 6, 2001, the day Cisco liquidated the last of its Terayon shares, the stock‘s closing price was $5.47 per share. Cisco, which had no knowledge that Gordon had taken some of its Tеrayon holdings, would have sold these shares as well except for Gordon‘s wrongdoing.
In situations where the return of stolen or embezzled property is impossible, impracticable, or inadequate, the MVRA requires defendants to pay victims “the greater of (I) the value of the property on the date of the damage, loss, or destruction; or (II) the value of the property on the date of sentencing.”
gues that the “date of the loss” should have been the date that the Terayon shares were embezzled, or the “taking date,” with a corresponding loss valuation of $6,523,192, more than $6 million less.
The MVRA offers no further elaboration on the “date of the loss” provision. Because it is unclear whether the district court‘s average stock price valuation method is consistent with the text of the statute, we “must consider ‘[t]he purpose, the subject matter, the context [and] the legislative history’ of this statute.” United States v. Miguel, 49 F.3d 505, 507 (9th Cir.1995) (quoting Pfizer, Inc. v. Government of India, 434 U.S. 308, 313, 98 S.Ct. 584, 54 L.Ed.2d 563 (1978) (alterations in original)). As there is no discussion within the MVRA‘s legislative history regarding the “date of the loss” provision, we turn to the remedial principles underlying the MVRA and restitution generally.6
Guided by the remedial purposes underlying the MVRA, other circuits have granted district courts a degree of flexibility in accounting for a victim‘s complete losses. For example, in Simmonds, the Third Circuit concluded that the district court did not abuse its discretion in calculating the value of the victims’ furniture destroyed in a fire under
Similarly, other circuits interpreting the MVRA have permitted a degree of flexibility in making victims of securities fraud whole by allowing district courts to place the risk of downward fluctuations in stock prices on defendants rather than victims. In United States v. Rhodes, 330 F.3d 949 (7th Cir.2003), the Seventh Circuit affirmed the district court‘s restitution order under the MVRA, which ordered the defendant, who defrauded a number of investors, to pay his former employer “the amount of money Magna Investments had to dole out in order to make its customers whole as a result of [the defendant‘s] fraud.” Id. at 953. The defendant argued that the district court‘s order was improper under the MVRA because his former employer “immediately liquidated the unauthorized investments [the defendant] had made, thereby incurring losses caused by a dip in the values оf those investments and the fact that at least some of the investments were sold before their maturation date.” Id. Rejecting this argument, the Seventh Circuit reasoned that the defendant should bear the risk of declining stock prices, not the victim: “[the defendant], rather than the victims, should bear the risk of forces beyond his control.... [T]o the extent that the interest rates have come into play in calculating the amount of loss, they have done so due to [the defendant‘s] own conduct.” Id. (quoting district court opinion); cf. Nelson, 687 F.2d at 281 (holding that “where a person with knowledge of the facts wrongfully ... acquires property ... of fluctuating value, such as stock, the injured party may be awarded an amount equal to the highest value reached by the stock within a reasonable time after the tortious act” (emphasis added)).
Because Cisco lacked knowledge as to Gordon‘s activities, it was unable to liquidate the embezzled Terayon shares throughout this period. The district court therefore concluded that Gordon, rather than Cisco or the government, should bear the risk associated with the fluctuations in Terayon‘s share value.
A brief examination of the “taking” date, the alternative “date of the loss” proposed by Gordon, illustrates the reasonableness of the district court‘s restitution method in making Cisco “whole” under the MVRA. On the date of Gordon‘s first “taking” of 54,525 shares, December 14, 1998, Terayon‘s day-high value was $30.12 per share. On the date of Gordon‘s second taking of 100,000 shares, June 24, 1999, Terayon‘s day-high value was $48.88 per share. But it is undisputed that (1) Cisco did not know on these dates that the shares had been taken, (2) Cisco did not intend to sell any Terayon shares on these dates, and (3) Cisco did sell all of its Terayon shares, mostly for prices higher than these, before Gordon‘s embezzlement was detected. Under those circumstances it is plain that limiting the restitution amount to the value of the shares on the date Gordon secretly stole them would underestimate Cisco‘s loss. But for Gordon‘s misconduct, Cisco would have sold those shares at higher prices and would have made substantially more money. The “taking” date is an appropriate “date of the loss” for the other securities that Cisco did not completely liquidate because it is too speculative to conclude that Cisco would have sold those securities absent Gordon‘s wrongdoing. In the Terayon context, however, the district court sensibly concluded that the “taking” date would have prevented the district court from accounting for Cisco‘s total losses.
That said, it is important to note that the legislative history of the VWPA demonstrates that Congress intended the restitution process to be quick and reasonable. See S.Rep. No. 97-532, at 31 (1982), reprinted in 1982 U.S.C.C.A.N. 2515, 2537 (“[W]here the precise amоunt [of restitution] owed is difficult to determine, [
To be clear, we do not hold that the district court was required to undertake this particular restitution exercise in determining the “date of the loss” for the embezzled Terayon shares.8 Rather, we only hold that the district court did not abuse its discretion in doing so.
b. Intervening Cause
Gordon argues in the alternative that the district court abused its discretion in including in its determination of the average Terayon share value the price of Terayon stock between July 21, 1999 and July 12, 2000 because, he contends, during that period Terayon‘s share price was fraudulently inflated. He cites a pending class action lawsuit in support of his assertion that a “dramatic spike” in Terayon‘s share price coincided with false statements by Terayon insiders. Gordon describes the spike as an “intervening cause” to Cisco‘s loss. He does not allege that Cisco was involved or aware of such alleged false statements.
“[T]he main inquiry for causation in restitution cases [is] whether there was an intervening cause and, if so, whether this intervening cause was directly related to the offense conduct.” United States v. Meksian, 170 F.3d 1260, 1263 (9th Cir.1999). The purported “intervening cause” in this case—the alleged fraudulent inflation of the price of Terayon stock—is not an “intervening cause” because it did not “cause” the loss to Cisco, but merely adversely affected the value of the property that Gordon embezzled. Though the extent of Cisco‘s loss may have been affected by outside forces, Gordon‘s conduct—and his alone—directly resulted in the loss. Cf. Rhodes, 330 F.3d at 953 (“‘[The defendant], rather than the victims, should bear the risk of forces beyond his control ....‘” (quoting district court opinion)); Meksian, 170 F.3d at 1263 (reversing a restitution order and concluding that the loss to thе lender was caused not by the defendant‘s false tax returns but “by the contaminated nature of the loan property” and by the lender‘s reliance on an inaccurate environmental risk report prepared by a third party). Moreover, even if Gordon‘s claims regarding an inflated stock price were true, there is no reason to believe that, absent Gordon‘s conduct, Cisco would have been prevented from selling the Terayon shares and realizing whatever premium may have been generated by such alleged fraudulent behavior. The market prices were available to Cisco, no matter how the market prices came to be.
It would have been unreasonable, in any event, to expect the district court to dis-
We therefore conclude that the district court did not abuse its disсretion in declining to take into account the alleged fraudulently induced spike in the value of Terayon shares.
2. Brokerage House Commissions
Gordon contends that to be an accurate approximation of the “lost opportunity” loss, the restitution amount would have to be based on the net proceeds to Cisco after brokerage commissions costs. Without accounting for brokerage commission costs, the restitution order arguably compensates Cisco for more than it ultimately lost. See United States v. Quillen, 335 F.3d 219, 222 (3d Cir.2003) (noting that restitution under the MVRA “must be limited to ‘an amount pegged to the actual losses suffered by the victims of the defendant‘s criminal conduct‘“) (quoting United States v. Barany, 884 F.2d 1255, 1260-61 (9th Cir.1989)).
The record is insufficient, however, to allow a court to deduct accurately the commissions from the restitution award. The pages of the record Gordon points to are merely receipts from various brokerages houses that show the commission paid on sales of certain blocks of shares. Nothing within the record provides a commission percentage rate for a particular brokerage house or a detailed list of which securities wеre bought and sold through which houses.
Given that Congress intended the restitution process to be expedient and reasonable, with courts resolving uncertainties with a view toward achieving fairness to the victim, we hold that the district court did not abuse its discretion in declining to account for the brokerage house commissions.
3. Investigation Costs
Gordon also argues that the district court abused its discretion in ordering him to pay Cisco‘s investigation costs.
(b) The order of restitution shall require that such defendant—
....
(4) in any case, reimburse the victim for lost income and necessary child сare, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.
Id. (emphasis added).10
“This circuit has adopted a broad view of the restitution authorization [for
The district court reasonably concluded that Cisco‘s investigation costs, including attorneys’ fees, were necessarily incurred by Cisco in aid of the proceedings. Cisco‘s investigation costs were a direct and foreseeable result of Gordon‘s actions. The record demonstrates that Cisco‘s investigation costs were incurred in response to five grand jury subpoenas and a number of government requests requiring Cisco to analyze vast amounts of documentation and electronic information. Cisco was required to retrieve every item regarding its investments in 20 companies that were the subject of possible insider trading by Gordon, and over 40 companies that were identified as candidates for Gordon‘s possible embezzlement of Cisco-owned shares or proceeds. Cisco was forced to identify and reconstruct hundreds of sales and acquisitions from which Gordon might have been able to embezzle proceeds. Gordon purposefully coverеd his tracks as he concealed his numerous acts of wrongdoing from Cisco over a period of years. As the victim, Cisco cannot be faulted for making a concerted effort to pick up his trail and identify all the assets he took amid everything he worked on.
The district court carefully analyzed Cisco‘s requests. Cisco‘s investigation included a forensic analysis of Gordon‘s computer to determine whether the “eliminated” evidence could be restored. The district court reduced the award for this analysis, finding that the evidence “does not support fully the extraordinary expense associated with Cisco‘s attempt to recover data from Defendant‘s laptop computer,” and made other reductions, finding that “several categories for which expenses are claimed are at least to some extent overlapping or duplicative.” Indeed, the district court ultimately ordered reimbursement for $1,038,477 of the total of $1,268,022 for which Cisco had sought reimbursement.
We therefore conclude that the district court did not abuse its discretion in awarding restitution for Cisco‘s investigation costs.
4. Prejudgment Interest
The district court awarded prejudgment interest on all assets, both cash and stock. For all assets excluding the Terayon shares, the district court set the interest accrual date as the date the assets were taken by Gordon, and the in-
Though the MVRA is silent on the issue of prejudgment interest, we have held that the VWPA “authorizes restitution for a victim‘s ‘actual losses‘” and that “[f]oregone interest is one aspect of the victim‘s actual loss.” United States v. Smith, 944 F.2d 618, 626 (9th Cir.1991) (interpreting the VWPA) (emphasis added). A number of other circuits have likewise held that restitution under the MVRA or the VWPA may include prejudgment interest. See United States v. Shepard, 269 F.3d 884, 886 (7th Cir.2001) (construing Government of Virgin Islands v. Davis, 43 F.3d 41, 47 (3d Cir.1994)) (construing VWPA); United States v. Hoyle, 33 F.3d 415, 420 (4th Cir.1994) (construing VWPA); United States v. Patty, 992 F.2d 1045, 1050 (10th Cir.1993) (construing VWPA); United States v. Rochester, 898 F.2d 971, 983 (5th Cir.1990) (construing VWPA).13
Gordon‘s first argument is unavailing. “Prejudgment interest reflects the victim‘s loss due to his inability to use the money for a productive purpose, and is therefore necessary to make the victim whole.” Patty, 992 F.2d at 1050 (emphasis added). In Smith we held that this proposition is particularly true when the victim is a financial institution because “[f]oregone interest is one aspect of the victim‘s actual loss.” Smith, 944 F.2d at 626. We in no way limited this holding to financial institutions, however. Indeed, other circuits have allowed restitution for prejudgment interest to other parties, such as individuals and family estates. See Shepard, 269 F.3d at 886 (awarding prejudgment interest where “the money came from an interest-bearing account” of a defrauded 87-year-old woman); Davis, 43 F.3d at 43, 47 (allowing prejudgment interest where the embezzled cash came from “the estate of James Merrills Rice“).
As a corporation, Cisco is likewise eligible for prejudgment interest restitution. While Cisco would not necessarily have placed its stock proceeds in an interest bearing account had Gordon not embezzled the securities, “interest” is simply a proxy for a “lost opportunity.” See Davis, 43 F.3d at 47 (“Lost interest translates into lost opportunities, as it reflects the victim‘s inability to use his or her money for a productive purpose.“). The district court‘s award of prejudgment interest reflects the “productive purposes” for which a profit maximizing entity like Cisco uses its cash reserves.14
Gordon‘s second argument, however, has merit. While the district court appropriately included prejudgment interest for the embezzled cash and the Terayon and Cabletron15 shares, both of which Cisco completely liquidated, the court abused its discretion in awarding prеjudgment interest for the other securities. As Cisco acknowledged, it had no intention of completely liquidating the other securities from the date of their taking to the date of judgment. Indeed, it was for this reason that the district court determined that the “date of the loss” for the other securities was the date of the misappropriation. Be-
We therefore conclude that the district court abused its discretion with regard to its award of prejudgment interest on all securities excluding the Terayon and Cabletron shares.
III. CONCLUSION
Congress passed the MVRA to make victims of crime whole. Mindful of this overarching objective, we arе also cognizant of Congress‘s desire that the restitution process be expedient and reasonable, with courts resolving uncertainties with a view toward achieving fairness to the victim. We thus hold that the district court‘s restitution analysis for the embezzled Terayon shares, including its fairly sophisticated “date of the loss” calculations, was not an abuse of discretion.16 Nor did the district court abuse its discretion in declining to account for the brokerage house commissions or in awarding restitution for costs incurred by Cisco during its participation in the criminal investigation. Finally, we conclude that the district court did not abuse its discretion in awarding Cisco prejudgment interest in regards to the embezzled cash and shares of the companies Terayon and Cabletron.17 The dis-
trict court did, however, abuse its discretion in awarding prejudgment interest for the other embezzled securities.
AFFIRMED IN PART, REVERSED IN PART, and REMANDED. Each party to bear its own costs.
FERNANDEZ, Circuit Judge, concurring and dissenting:
I concur in the majority opinion, with the exception of parts II, B-1 and II, B-4, as to which I dissent.
Congress did, no doubt, want to help make victims of crimes whole when it enacted
No doubt, courts can massage and explicate the “date of loss” concept, but no authority supports doing what the district
United States v. Angelica, 859 F.2d 1390, 1394 (9th Cir.1988) (internal quotation marks and citations omitted).The VWPA grants the sentencing judge substantial discretion over the entire process leading to an ultimate restitution order. As part of the process, the judge must decide in a particular case, whether the imposition of the order will unduly complicate or prolong the sentencing process. Here, the district court determined the amount of restitution based upon evidence presented at trial and in a presentence report showing the value of the diamonds at the time they were initially purchased by the victims.... While the district court has discretion in ordering restitution, the award must be within the statutory framework. Because the amount of restitution ordered in this case was based neither on the value of the diamonds on the date of loss, nor on their value at the date of sentеncing, the restitution order was beyond the authority
granted by the statute. Although valuing the diamonds as of the date of loss or sentencing may present a difficult determination for the district court, the choice of two possible dates of valuation is stated unambiguously in [the VWPA]. We must therefore remand to the district court for valuation of the diamonds on one of those two dates.
It seems to me that when an item is stolen from someone, that is the date upon which the person lost it. The concept that he lost it on some other date to be determined in the future, perhaps many years later, does not take account of the normal use of language. Usually we think of something as “lost” when it has been parted with or when it has gone out of our possession. That is the date that we suffer our loss.
Of course it can be argued that if the person had kept the item it would have been worth a lot more a few years later, or a lot less, or at some point more and at a later point even less, but that is decidedly not the date that the property was lost; it is not the date that Congress selected. Congress sеlected the date that the loss truly occurred; that is when the property was lost to the victim.
Nor am I able to accept the proposition that the property is not lost until the victim knows that it is gone. When a diamond is stolen from a victim‘s jewelry box, or a share of stock from his portfolio, it is lost to him, whether he knows that or not. Surely the date that he loses the piece of property should not depend upon the sophistication of his inventory process, or upon his memory of precisely where it ought to be at some precise time. It is undoubtedly lost on the date it is taken from him, regardless of how quickly he discovers that.
Finally, the thought that a district court can choose to adopt the complex system of deciding loss that was adopted by the district court in this case, or can choose to adopt some other view of when a loss takes place, does not help very much. Discretion in the legal world is not the unfettered right to do whatever you like. We have always been admonished that, at the very least, the asymptotes bounding judicial discretion are compоsed of a proper assessment of the facts and the law. See, e.g., Koon v. United States, 518 U.S. 81, 97-100, 116 S.Ct. 2035, 2046-47, 135 L.Ed.2d 392 (1996); Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2461, 110 L.Ed.2d 359 (1990); Retail Flooring Dealers of Am., Inc. v. Beaulieu of Am., LLC, 339 F.3d 1146, 1150 (9th Cir.2003); Montrose Chem. Corp. of Cal. v. Am. Motorists Ins. Co., 117 F.3d 1128, 1133 (9th Cir.1997); United States v. Schlette, 842 F.2d 1574, 1577 (9th Cir.1988); cf. Olvera v. Giurbino, 371 F.3d 569, 573-74 (9th Cir.2004) (saying that it has discretion but must exercise it in a particular way). Thus, a judge who does not wish to engage in the complex exercise approved of here will have to try it out first—entertain it in order to see if it can be discretionarily rejected.2 He may even have to consider other more complex possibilities. That, again, is far from calculating the values on one of the two easily determined discreet dates selected by Congress.3
In addition, I see no basis for considering prejudgment interest to be a part of criminal restitution where an item of property was taken, and we are referred to no case where that has been done. In fact, absent other facts, it is rank speculation to say that if a person had the asset, whatever it was, he would have kept it, or earned interest on it, or earned interest on the equivalent of its value.
In fact, every similar case that I have discovered deals with a situation where the property taken was “money,” and that money was being loaned at a given interest rate or was contained in an interest bearing account or instrument when it was taken. See, e.g., United States v. Morgan, 376 F.3d 1002, 1014 (9th Cir.2004) (contractual interest on credit card charges); United States v. Smith, 944 F.2d 618, 620, 626 (9th Cir.1991) (defendant falsified loan applications and subsequently defaulted on inadequately secured loans); see also United States v. Shepard, 269 F.3d 884, 886 (7th Cir.2001) (money stolen from interest-bearing account); Government of Virgin Islands v. Davis, 43 F.3d 41, 46-47 (3d Cir.1994) (fraudulently acquired certificates of deposit); United States v. Hoyle, 33 F.3d 415, 416-18, 420 (4th Cir.1994) (student loan fraud); United States v. Patty, 992 F.2d 1045, 1047-48, 1049-50 (10th Cir.1993) (bank loan fraud); United States v. Rochester, 898 F.2d 971, 982-83 (5th Cir.1990) (restitution included outstanding balance and accrued interest on bank loan); cf. United States v. Simpson, 8 F.3d 546, 548, 552 (7th Cir.1993) (affirming a restitution award that included interest on some victims’ losses from fraudulent investment schemes where swindler had, inter alia, misrepresented guaranteed rate of return); United States v. Stephens, 374 F.3d 867, 869-70 (9th Cir.2004) (restitution order for past due child support payments may include prejudgment interest where state law mandates that interest be paid on delinquent child support obligations). Indeed, where the misappropriated property, although cash or cash equivalent, was not interest bearing property, other circuits have determined that restitution does not properly include prejudgment interest because “a criminal penalty does not bear interest,” and the courts were hesitant to infer additional criminal penalties beyond those specifiсally provided by statute. See United States v. Rico Industries, Inc., 854 F.2d 710, 711-12, 714 (5th Cir.1988) (reversing order to pay prejudgment interest on amount ordered to be paid as restitution for criminal kickback scheme); United States v. Sleight, 808 F.2d 1012, 1014-15, 1020 (3d Cir.1987) (same).4 In a true money-at-interest case, the interest can be said to be a part of the property taken on the date of the loss itself, or, at worst, on the date of sentencing. Either the miscreant
Of course, nothing I have said is intended to detract from or denigrate a victim‘s multitudinous remedies in a typical civil case. But a typical civil case is designed to explore the many nuances involved in determining just how much damage was inflicted upon the victim by the wrongdoer. As we all know, that can involve months and years of litigation, expensive discovery proceedings, motion proceedings, and all of the other things that go into the mix of arriving at a just result in a civil case. That is not this case. In fine, we should not inflict this sort of thorny complexity upon all of the district courts in this circuit, even if a few district judges enjoy embracing this genus of legal cacti.
Thus, I concur, except in the portions already indicated, as to which I respectfully dissent.
CLIFTON
UNITED STATES CIRCUIT JUDGE