In U.S. v. Huff, No. 08-16272 (June 25, 2010), the Court rejected the argument that the government proved multiple hub-and-spoke conspiracies, not a single conspiracy, but vacated a restitution order.
Rejecting Huff’s conspiracy argument, the Court noted that the evidence showed that the defendants interacted with one another and with their co-conspirators. This was not a case where the conspirators were unaware of others’ activity. Thus, the evidence established a single conspiracy.
The court affirmed the calculation of an $86,938.03 loss amount for sentence enhancement purposes. The Court rejected the argument that the loss amount should be limited by the amount of the kickback the defendant received. The Court noted that the amount of the bribe a defendant receives can be the loss amount, but only if it is not possible to calculate the net benefit of the improper benefit garnered by the defendant. Here, the benefit resulting from the illegal scheme exceeded the amount of Huff’s kickbacks.
Turning to restitution, the Court noted that the district court imposed $86,938.03 in restitution – the same as the loss amount. However, a defendant’s culpability does not always equal the victim’s injury. Further, the district court did not adequately explain how it reached its restitution figure. The Court noted two major ambiguities in the record. First, while some orders placed by the victim were the subject of the fraud, other orders were actually filled – and these orders must be offset against the restitution amount. Second, the restitution amount might have intended to include the kickbacks received by another co-defendant. But restitution is limited to the amount wrongfully taken by the defendant. If restitution was ordered in the co-defendant’s case, this would result in a windfall double-recovery for the victim. The Court therefore remanded for a limited resentencing on the issue of restitution.