GERSHON, District Judge.
Defendant Luis Adorno, a former Supervisory Construction Project Manager at the City of New York Housing and Preservation Department ("HPD"), has pled guilty to a single-count Information charging bribery concerning a program receiving Federal funds, in violation of 18 U.S.C. § 666(a)(1)(B) (the "Information"). The City of New York (the "City") seeks an award of restitution under the Mandatory Victim Restitution Act, 18 U.S.C. § 3663A (the "MVRA"). Specifically, the City seeks payment of restitution in the amount of 25% of Adorno's salary for 2008 and 2009, the years in which the offense was committed.
Under the MVRA, a defendant who is convicted of certain types of offenses must "make restitution to the victim of the offense." 18 U.S.C. § 3663A(a)(1). The purpose of the MVRA is "essentially compensatory: to restore a victim, to the extent money can do so, to the position he occupied before sustaining injury." United States v. Boccagna, 450 F.3d 107, 115 (2d Cir.2006). The district court's "statutory authority to award restitution under the MVRA is limited to awards to victims of the offense of conviction." United States v. Archer, 671 F.3d 149, 170 (2d Cir.2011).
Application of the MVRA is "accordingly limited to the actual, provable loss suffered by the victim and caused by the offense conduct. Awarding restitution in excess of the victim's actual loss would be punitive in nature and thus fall outside the scope of the MVRA." U.S. v. Fair, 699 F.3d 508, 512 (D.C.Cir.2012) (emphasis added).
In order to ascertain whether restitution should be awarded under the MVRA in the present case, it is necessary to determine, first, whether bribery amounts to an offense against property (including one committed by fraud or deceit), and further, whether the City has suffered an identifiable loss caused by Adorno's conduct—i.e., whether the City is a victim as contemplated by the statute.
Turning, first, to the question of whether bribery constitutes an offense against property within the MVRA, the government and the City argue that Adorno's salary constitutes the "property" of the City, as his employer, and that the City lost some of this property as a result of Adorno's conduct, to wit: By accepting a bribe in exchange for assisting a construction contractor in obtaining additional work from HPD, Adorno failed to provide honest and faithful services to his employer.
The arguments advanced by the City and the government depend upon an assumption that the bribery was committed in such a way as to deprive the City of Adorno's honest services. However, as the Probation Department recognizes, while the extent to which Adorno committed honest services fraud is potentially relevant conduct under the United States Sentencing Guidelines, this is not the offense to which Adorno has pled, and it thus appears that the government and the City may be "seeking restitution for losses caused by an unprosecuted offense rather than the offense of conviction, something [they] may not do." Archer, 671 F.3d at 170 (2d Cir.2011).
Both the City and the government rely primarily on United States v. Bahel, 662 F.3d 610 (2d Cir.2011), to support their contention that bribery requires restitution under the MVRA. In Bahel, an employee of the United Nations was convicted of honest services fraud under 18 U.S.C. §§ 1341, 1343 and 1346, and bribery under 18 U.S.C. § 666(a)(1)(B). The United States Court of Appeals for the Second Circuit affirmed the district court's award of restitution for the amount of Babel's salary, concluding that the salary "was plainly `property' that belonged to the
Where the offense of conviction is limited, as it is here, to bribery, it is not clear that the MVRA applies. In United States v. Battista, 575 F.3d 226 (2d Cir.2009), the Second Circuit declined "to answer the open question of whether the language `committed by fraud or deceit' in Section 3663 A(c)(1)(A)(ii) refers to the elements of an offense or the manner in which the defendant commits the offense."
Even if the Second Circuit were to answer the question left open in Battista and permit the court to look at the manner in which the crime was committed, then, on the facts of this case, it would be improper to award restitution under the MVRA. The Information charges Adorno with the solicitation, demand, and acceptance of payments and business interests, with the intent to be influenced and rewarded in connection with business, in violation of 18 U.S.C. § 666(a)(1)(B). While Adorno's official conduct may have, in fact, been influenced, a conviction for bribery does not require such a showing. See United States v. Pretty, 98 F.3d 1213, 1219 (10th Cir.1996) (18 U.S.C. § 666(a)(1)(B) "requires only intent to be influenced, rather than actual influence"), cert. denied, 520 U.S. 1266, 117 S.Ct. 2436, 138 L.Ed.2d 197 (1997). And, on the record before this court, the extent to which Adorno was influenced, and the impact of such influence on HPD's projects, cannot be determined. Put another way, aside from the assertion that Adorno deprived the City of his honest services, neither the City nor the government offers a basis upon which to conclude that, in this case, the offense of conviction is one that was committed by fraud or deceit, or that his offense caused a loss to the City within the meaning of the MVRA.
This is such a case. There are issues both as to the cause and the amount of the City's losses. That is, as noted above, there are issues as to whether the bribery in fact caused a loss to the City within the meaning of the MVRA, and there are issues as to how to calculate the loss if we assume the bribery in fact caused a loss.
In Sapoznik (see n. 6, supra), the court chose to award as restitution to a victim employer a percentage of the defendant's salary, even while acknowledging the arbitrariness of estimating a percentage of salary. See 161 F.3d at 1121-22. However, in this case, the parties' submissions make clear that any estimate would be too arbitrary to sustain and that a hearing to achieve a non-arbitrary result would involve protracted proceedings that, even if conducted, might well not produce a non-arbitrary result.
The City seeks 25% of Adorno's salary for the two-year period during which the bribe was paid, but, other than its contention that "this amount is consistent with the case law awarding a reasonable approximation of the difference in the value of services actually rendered and the value of the services of an honest, faithful employee," it offers no basis for picking this percentage as reflective of its "loss." (City Letter, February 6, 2013, at 3.) Similarly, after acknowledging at the February 19, 2013 hearing that there was "no way of really coming up with a reasonable" number and suggesting that it was "within the court's discretion to decide what would be appropriate" (Hr'g Tr., Feb. 19, 2013, at 8), the government subsequently suggested that the award be based on the percentage of projects corrupted by the bribes, out of the total number of projects supervised by the defendant, or on the court's estimate of the difference between the value of honest services and Adorno's dishonest services. As for the defendant, he argues that no actual loss has occurred, insofar as there is no evidence that Adorno's performance of his duties actually caused a loss, and that the subject building projects amount to only about 10%, and not 25%, of the total number of projects Adorno supervised (a matter that the court cannot determine on the current record). He suggests that the amount of time he spent on the projects would be a fairer estimate; he also notes, however, that he has no records to support that analysis, as the records are within the City's control.
In sum, recognizing the principles and values of the MVRA, but also the limitations involved in making a legitimate and fair calculation of restitution in this case,
SO ORDERED.
Over Battista's opposition (the other defendants did not dispute the applicability of the MVRA to their offenses of conviction), the district court concluded that the NBA was a victim of the offense to which Battista pled and that such offense was covered by the MVRA; alternatively, the court concluded, restitution was appropriate under the Victim and Witness Protection Act of 1982 (the "VWPA"), 18 U.S.C. § 3663(a)(1)(A). Donaghy, 570 F.Supp.2d at 420-23.
In reaching this conclusion, the district court held that the phrase, "committed by fraud or deceit," as it appears in the MVRA, refers not to the elements of an offense, but rather, to "the manner in which the defendant commits the offense." Id. at 421. Since the manner in which Battista's wagering conspiracy was carried out depended upon Donaghy's fraud, the district court found that Battista was subject to the MVRA. Id. Upon appeal by Battista, the Second Circuit affirmed the award, but declined to answer the "open question," as set forth above, since it concluded that restitution was properly awarded under the VWPA. See Battista, 575 F.3d at 230-31.
United States v. Sapoznik, 161 F.3d 1117, 1121-22 (7th Cir.1998), focused on the propriety of the amount, and not the fact, of restitution. In that case, the Seventh Circuit concluded that the district court did not abuse its discretion by awarding restitution in an amount equal to one-quarter of the salary of a police chief who had pled guilty to bribery under the RICO statute, 18 U.S.C. § 1962(c). Sapoznik, 161 F.3d at 1121. While the Court's conclusion relies upon the assumption that bribery is included within the MVRA, it is not clear, from the decision, whether there was ever any challenge to that, as there is no discussion of it.
