In United States v. Edwards, No. 11-15953, (11th Cir. Sept. 6, 2013), the U.S. Court of Appeals for the Eleventh Circuit made clear that a district court may order restitution for acts of related conduct—even if the criminal charges related to that conduct have already been dismissed.
There, the defendants, Edwards and Frontier Holdings, Inc. had been charged with multiple counts of wire fraud, money laundering, and mail fraud for their involvement in a high yield investment scheme. The charged scheme involved soliciting potential victims through investment conferences or by referrals. The victims were promised high yield returns on their investment. The defendants advertised the investment as risk free. Instead of investing the money, Edwards used the money for his own personal expenditures.
At trial, the district court dismissed certain counts. At sentencing, however, the district court still ordered restitution to victims whose injuries related to counts that had been dismissed. The defendants appealed, arguing, among other things, that the restitution ordered on dismissed counts was error.
The Eleventh Circuit, in an expansion of the law on victims’ rights, ruled that the lack of conviction on the conduct in question did not automatically preclude the district court from finding an injury sufficient to order restitution relating to that conduct. The Court stated that “[w]hile a conviction is required to trigger restitution under the MVRA [Mandatory Victims Restitution Act, codified at 18 U.S.C. § 3663A], once the defendant is convicted, a ‘court may order restitution for acts of related conduct for which the defendant was not convicted.’” citing United States v. Dickerson, 370 F.3d 1330, 1341 (11th Cir. 2004). The court further noted that, as long as the injury is related to an offense of which the defendant was convicted, restitution can be ordered.
The Eleventh Circuit articulated that, in determining whether conduct is “related,” courts should consider whether the victim and the purpose of each scheme was the same, whether the schemes involved the same modus operandi, and whether the schemes involved common participants.
Trial counsel should be mindful of Edwards and its implications in criminal cases, when negotiating plea agreements, or at restitution hearings—especially when defendants have assets. Counsel must also be aware of the potential scope of restitution and be prepared to express why uncharged and even dismissed conduct is unrelated and not properly subject to restitution.