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National Crime Victim Law Institute

United States v. Keifer, No. 11-3942 (6th Cir. Nov. 5, 2012) (order).

November 09, 2012

Defendant created the fictitious McPherson Property Group and induced the victim-investor into purchasing worthless shares of the company.  Additionally, defendant opened bank and merchant accounts under 56 different names and received payment from numerous entities for work never performed.  The federal government eventually charged defendant with two counts of bank fraud, one count of uttering a forged and counterfeit security, and one count of fraud and related activity in connection with access devices.  The government later moved to dismiss the forged security charge, and defendant ultimately pled guilty to the bank fraud and fraud with access devices charges.  The district court ordered defendant to pay restitution to multiple victims, including the victim-investor.  Defendant appealed the restitution order, and the victim-investor moved under the Crime Victims’ Rights Act (CVRA), U.S.C. § 3771, to intervene in the appeal.  On appeal, defendant argued that the victim-investor was not entitled to restitution because restitution must be based on conduct related to the offense of conviction, and the government had dismissed the count that was most closely associated with the victim’s loss.  The appellate court rejected defendant’s argument, noting that it broadly construes what constitutes conduct involved in the offense of conviction.  And in so doing, the court will look to the plea agreement, plea colloquy, and other statements made by the parties to determine the scope of the offense of conviction for purposes of restitution.   After examining the record in the case, the appellate court found that the victim-investor was directly harmed by defendant’s conduct and entitled to restitution.   Defendant also argued that the restitution amount should have been offset by the “overly generous” salary he paid to the victim-investor and the other benefits the victim-investor had obtained at the expense of McPherson Property Group.  The court rejected this argument as well, stating that “[n]othing in the detailed provisions of the statute [the Mandatory Victims’ Restitution Act, U.S.C. § 3663A] contemplates that a defendant guilty of criminal fraud can escape mandatory restitution by requiring district courts to conduct mini-trials on the possible contributory negligence of the very persons victimized by the defendant.”  As such, the court held that the district court did not abuse its discretion in determining the amount of restitution.  The court then denied the victim-investor’s motion to intervene in the appeal, noting that the appellate courts have routinely rejected victim entitlement to appellee status under the CVRA.