ORDER UNDER SEAL1

ROBERT J. CONRAD, Jr., District Judge.

THIS MATTER is before the Court for determination of restitution which was deferred at the time of sentencing. (Doc. No. 380: Judgment at 4). Upon consideration of the supplemental briefing by the parties and the entire record of this case, the Court declines to order restitution for the reasons stated below.

First, the government requests $2.125 million for Arch Insurance Company for half the cost of settlement of shareholder litigation against Beazer Homes USA, Inc. (Doc. No. 379: Supp. Filing at 1). Arch requests additional restitution for attorney and expert fees in that litigation. (Id. at 2). The defendant argues that his conduct was not the direct and proximate cause of Arch's payments in the civil class action. (Doc. No. 382: Response at 4). Under the Mandatory Victim Restitution Act (MVRA), a victim is a person directly and proximately harmed as a result of the commission of a qualifying offense and a defendant must pay the value of the property loss. 18 U.S.C. § 3663A(a)(2) and (b)(1). Consequential damages are not recoverable. United States v. Abdelbary, 746 F.3d 570, 578 (4th Cir. 2014).

Here, the shareholder litigation involved a host of allegations, some related to the defendant's conduct, some completely separate. (See In re: Beazer Homes USA, Inc. Securities Litigation, 1:07-cv-725, Doc. No. 84: Amended and Consolidated Class Action Complaint). Although the government suggests half of the settlement costs are attributable to the defendant, on the record before the Court, there is insufficient information to apportion the loss amount resulting directly and proximately from the defendant's criminal conduct as compared to other alleged violations of federal securities law. Additionally, litigation expenses are not recoverable unless the criminal conduct occurred during court proceedings. Abdelbary, 746 F.3d 578-79. Therefore, the Court is unable to award restitution to Arch.

Second, the government seeks nearly $23.5 million in restitution for Beazer. While the government notes that a corporation may be considered a victim and a participant in crimes arising out of the same facts, United States v. Crop Growers Corp., 954 F.Supp. 335, 343-44 (D.D.C. 1997), for purposes of restitution, 18 U.S.C. § 3663(a)(1)(A) expressly states that "in no case shall a participant in an offense be considered a victim." See also United States v. Reifler, 446 F.3d 65, 127 (2d Cir. 2006) (restitution order requiring one co-conspirator to pay another restitution was beyond the authority conferred by the MVRA). Here, Beazer was named as an unindicted co-conspirator in Rand's indictment. (Doc. No. 3 at 1). In a separate case, Beazer entered a deferred prosecution agreement on an information that included the "cookie jar" accounting scheme, (Case. No. 3:09-cr-113, Doc. No. 2), which has now been dismissed upon satisfaction of the agreement, (Id., Doc. No. 8: Order). On the facts of this case, Beazer cannot be considered a "victim" for purposes of restitution because it participated in the offense.

IT IS, THEREFORE, ORDERED that the Court will not require the defendant to pay restitution as requested by the government. An amended judgment will issue promptly.

The Clerk is directed to certify copies of this order to the defendant, counsel for the defendant, to the United States Attorney, the United States Marshals Service, and the United States Probation Office.