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Date: 12-05-2021
Case Style:
United States of America v. Ojin Kim
Case Number: 18-51024
Judge: JAMES L. DENNIS
Court:
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
On appeal from The United States District Court
for the Western District of Texas
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Description:
New Orleans, LA - Criminal defense lawyer represented defendant with a one count of criminal copyright infringement charge.
The Odessa Police Department and the Ector County Sheriff’s Office, in
conjunction with the FBI, investigated illegal game rooms in Odessa, Texas
that were the source of numerous complaints of crime and violence in the area.
The FBI’s investigation focused on the distributors of counterfeit gaming
software. Pursuant to this investigation, Odessa officers and FBI agents
executed a search warrant at OK Marketing Game Room in Odessa in
February 2016. The game room contained several “Life of Luxury” (“LOL”)
video slot machine games. The LOL game machines contained motherboards,
which include memory chips that hold the software for the games. Scientific
Games Corporation is a legitimate business that produces and sells LOL game
machines and owns the copyright to LOL software stored on the motherboard
of each LOL machine. The computer motherboards seized from OK Marketing
Game Room were found to contain memory chips with counterfeit Scientific
Games labels, which indicated infringing copies of the gaming software in
violation of federal copyright laws.
During the search, officers also located an empty box with a return
address from Ozz Microsystem—located on Kinghurst Street in Houston,
Texas—a company eventually connected to Ojin Kim. A Confidential Human
Source (CHS) knowledgeable in game room operations and gaming equipment
purchased 24 counterfeit LOL motherboards from Ojin Kim and his codefendant, Hans Kim.
In July 2016, the Ector County Sheriff’s Office executed a search warrant
at a different game room in Odessa, the Best/Blue, and seized the motherboard
from each gaming machine at that location, many of which were LOL
motherboards. The owner of Best/Blue, Ok Cha Muraki, told the deputies that
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3
she purchased motherboards from Kim. Muraki said that Kim told her that
the motherboards had been made in China, which explained why they were
sold cheaply for only $300–$400 each. Muraki further reportedly stated that
she owed Kim more than $200,000 for prior purchases of gaming equipment,
including motherboards. On November 21, 2016, the FBI seized ten LOL
motherboards from the Ozz offices in Houston. On the same day, the FBI
interviewed Kim, who admitted that he knowingly sold counterfeit copies of
LOL software.
Kim pleaded guilty to one count of criminal copyright infringement. In
the factual basis of his plea agreement, Kim agreed that he caused a financial
loss to Scientific Games of $30,000, which was calculated by multiplying 24,
the number of counterfeit LOL motherboards that the CHS purchased from
Kim, by the retail value of $1,250 per motherboard. Kim also agreed to pay
restitution to “include all amounts discovered through investigation into his
criminal activity as described and set out in the Indictment.” Additionally,
Kim’s plea agreement stated:
The Defendant waives the right to appeal any aspect of the
conviction and sentence, and waives the right to seek collateral
relief in post-conviction proceedings, including proceedings under
28 U.S.C. § 2255. This waiver does not apply to ineffective
assistance of counsel or prosecutorial misconduct of constitutional
dimension of which the Defendant did not have knowledge at the
time of sentencing.
The presentence report (PSR) stated that Kim was accountable for the
sale of 485 counterfeit motherboards for a total loss of $606,250. The probation
office arrived at this figure through two separate calculations. First, mirroring
the plea agreement, the PSR stated that Kim was accountable for a loss of
$30,000 based on the counterfeit motherboards he sold to the CHS. This
calculation multiplied the approximate retail value of a LOL motherboard,
$1,250, by 24, the number of motherboards purchased by the CHS from Kim
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No. 18-51024
4
and his co-defendant. Second, the PSR stated that Kim was responsible for the
sale of an additional 461 counterfeit motherboards for a loss of $576,250. To
arrive at this number, the probation office relied on the statement by Muraki,
owner of the Best/Blue game room, that she owed Kim $200,000. The PSR
stated that this $200,000 “could have bought 461 motherboards at an average
cost of $434 each.” The PSR then multiplied the approximate retail value of a
LOL motherboard, $1,250, by 461 to arrive at the alleged loss to Scientific
Games of $576,250. It is this calculation that Kim challenged in the district
court and on appeal.
These calculations impacted facets of both Kim’s recommended sentence
of imprisonment and the amount he owed in restitution. First, because the
loss amount exceeded $550,000, the PSR applied a 14-level sentencing
enhancement pursuant to U.S.S.G. § 2B1.1(b)(1)(H), resulting in a Guideline
range of 46 to 57 months. Second, the PSR concluded that Kim owed Scientific
Games restitution of $606,250. Because Scientific Games owns the copyright
to LOL, the PSR identified it as the “victim” of Kim’s criminal copyright
infringement for purposes of restitution.
While Kim agreed he owed restitution of $30,000 to Scientific Games
based on the 24 motherboards that the CHS purchased from Kim and his codefendant, he objected to the additional $576,250 in calculated loss based on
the statements of Best/Blue game room owner Muraki. In his objections to the
PSR, Kim argued that Muraki did not purchase the gaming boards from him,
but instead that Muraki purchased the Best/Blue game room with the gaming
machines already in place. He also stated that the sales he made to the
Best/Blue “were for bill acceptors, monitors, power supplies, wiring, and spare
parts, not motherboards.” Finally, Kim argued that Muraki did not owe him
$200,000—for motherboards or anything else—because Kim had required cash
on delivery.
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5
At sentencing, Kim reiterated his objection to the total loss and
restitution calculations, again asserting that Muraki did not owe him $200,000
and that he did not sell her counterfeit motherboards; rather, he insisted that
he only sold her other equipment and cabinets. In support of these assertions,
Kim submitted an affidavit from Muraki in which she stated that because she
purchased the game room from another individual, it was already stocked with
games and their motherboards. She further stated she did not purchase
motherboards from Kim and did not owe him $200,000 because she always paid
in cash on delivery. Kim also submitted the affidavit of Ju Kim, a technician
who worked for Muraki, that confirmed Muraki’s statements that she did not
purchase motherboards from Kim and did not owe him any money.
The Government called FBI special agent Rick Drebenstedt to testify at
sentencing. Drebenstedt testified that he had interviewed Muraki about a
month after he searched her game room and that during the interview Muraki
told him that “she had gotten equipment or supplies from Ojin Kim in Houston,
Texas” and “[t]hat during the course of transactions with [Kim], that [Muraki]
had received equipment and motherboards, and that [Muraki] owed an
outstanding debt of $200,000 to [Kim].” Drebenstedt further testified that the
motherboards from the 103 gaming machines that were seized from the
Best/Blue game room “were purchased from Ojin Kim in Houston, Texas,” and
that the large majority of those were Life of Luxury machines. On cross
examination, Drebenstedt admitted that he did not know how many of the 103
confiscated motherboards were LOL motherboards, and that he had no
documentation to indicate that Muraki owed Kim $200,000 for prior purchases.
He also stated that Muraki never specified how many motherboards she
purchased from Kim or what portion of the $200,000 she owed was for
motherboards or for other equipment.
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No. 18-51024
6
The district court denied Kim’s objections to the total loss and restitution
amounts without explanation. Kim requested a downward variance based on
the nature and circumstances of the offense, arguing that the guidelines
overstated the seriousness of the offense. The district court denied Kim’s
variance motion and stated that, based on the 18 U.S.C. § 3553(a) factors, the
guidelines range was reasonable. The court sentenced Kim to 46 months in
prison and three years of supervised release. The court further found that Kim
owed restitution of $606,250.
On appeal, Kim challenges the district court’s conclusion that he was
responsible for the additional $576,250 in losses, asserting that this calculation
was based on speculation—i.e., the supposed amount of counterfeit LOL
motherboards that Muraki could have purchased from Kim at a discounted
price, based on Muraki’s statement that she owed Kim $200,000, if it was
assumed that the entire amount was spent on counterfeit LOL motherboards.
Kim argues that the deficient loss calculation warrants reversal on two points
of prejudice to him: First, he argues that the district court erred in imposing a
14-level sentencing enhancement under § 2B1.1(b)(1)(H) based on its
conclusion that the loss calculation exceeded $550,000. Second, he argues that
his restitution order exceeds the statutory maximum because the Government
failed to prove the requisite proximate cause between the victim’s losses and
the restitution amount. We discuss each in turn.
II. Appeal Waiver & Sentencing Enhancement
First, Kim argues that the district court erred in imposing a 14-level
sentencing enhancement under § 2B1.1(b)(1)(H) based on its conclusion that
the loss calculation exceeded $550,000. The Government responds that Kim’s
appeal waiver bars this challenge. We agree.
“[A] defendant may, as part of a valid plea agreement, waive his
statutory right to appeal his sentence.” United States v. Melancon, 972 F.2d
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No. 18-51024
7
566, 568 (5th Cir. 1992). “This court reviews de novo whether an appeal waiver
bars an appeal.” United States v. Keele, 755 F.3d 752, 754 (5th Cir. 2014). We
conduct a two-step inquiry in determining whether an appeal waiver bars an
appeal: First, we evaluate “whether the waiver was knowing and voluntary,”
and second, we determine “whether the waiver applies to the circumstances at
hand, based on the plain language of the agreement.” United States v. Bond,
414 F.3d 542, 544 (5th Cir. 2005). “In determining whether a waiver applies,
this court employs ordinary principles of contract interpretation, construing
waivers narrowly and against the Government.” Keele, 755 F.3d at 754 (citing
United States v. Palmer, 456 F.3d 484, 488 (5th Cir. 2006)).
Because Kim does not contend that his appeal waiver was not knowing
and voluntary, we must determine whether the appeal waiver applies to the
circumstances at hand. See Bond, 414 F.3d at 544. Kim’s plea agreement
contained a broad waiver-of-appeal provision, expressly excepting only
ineffective assistance of counsel claims and certain prosecutorial misconduct
claims. Kim does not invoke either of these exceptions, instead arguing that
his sentence exceeds the statutory maximum because the loss amount was
based on speculation regarding the number of motherboards that Muraki could
have purchased with the $200,000 that she initially said she owed Kim but
later denied owing him. Kim contends that an argument that a sentence
exceeds the statutory maximum is unwaiveable and therefore survives the
appeal waiver.
Affording the language of the appeal waiver its plain meaning, it applies
to the circumstances of this claim. Even if a claim that the sentence exceeds
the statutory maximum is not barred by the appeal waiver, that particular
claim is not implicated here: Kim’s claim is a challenge to the application of
the Guidelines provision that enhanced his sentence based on a calculated loss
amount exceeding $550,000, which is barred by the waiver provision, not a
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No. 18-51024
8
claim that his sentence exceeds the maximum allowable statutory term of
imprisonment. See Bond, 414 F.3d at 545–46; see also United States v. Minano,
872 F.3d 636, 636–37 (5th Cir. 2017) (determining that a challenge to the loss
amount was barred by an appeal waiver because the challenge pertained to the
application of a specific guideline).
III. Appeal Waiver & Restitution Order
Kim next challenges the amount of restitution awarded to Scientific
Games. He argues that because the restitution amount was based on
speculation as to the number of motherboards that Muraki might have
purchased from Ozz, the Government failed to prove the requisite proximate
cause and that therefore his restitution order exceeds the statutory maximum.
The Government again argues that this appeal is barred by Kim’s appeal
waiver. Kim responds that he is permitted to appeal the restitution order
regardless of whether he expressly reserved the right to bring such an appeal
because the restitution amount exceeds the maximum authorized by statute.
The Mandatory Victims Restitution Act of 1996 (MVRA), 18 U.S.C.
§ 3663A, requires the payment of restitution to victims of certain offenses,
including offenses committed by fraud or deceit, “in which an identifiable
victim or victims has suffered a physical injury or pecuniary loss.”
§ 3663A(a)(1), (c)(1)(A)(ii), (c)(1)(B). Under the MVRA, a victim is “a person
directly and proximately harmed as a result of the commission of an offense for
which restitution may be ordered.” § 3663A(a)(2). “Any dispute as to the
proper amount or type of restitution shall be resolved by the court by the
preponderance of the evidence. The burden of demonstrating the amount of
the loss sustained by a victim as a result of the offense shall be on the attorney
for the Government.” § 3664(e). “[I]f a court orders a defendant to pay
restitution . . . without determining that the defendant’s conduct proximately
caused the victim’s claimed losses, the amount of restitution necessarily
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9
exceeds the statutory maximum.” United States v. Winchel, 896 F.3d 387, 389
(5th Cir. 2018).
This court has held that a defendant may bring a challenge to a
restitution order in excess of that which is authorized by statute where his
appeal waiver expressly reserves the right to appeal a sentence in excess of the
statutory maximum. See United States v. Chem. & Metal Indus., Inc. (C&MI),
677 F.3d 750, 752 (5th Cir. 2012). Kim’s plea agreement contains no such
express reservation. The precise question before us, then, is whether a
defendant may appeal a restitution order in excess of the statutory maximum
where he has broadly waived his right to appeal and his appeal waiver contains
no provision requiring his sentence to be within the statutory maximum. In
accordance with our prior case law, he can.
In United States v. Barnes, 953 F.3d 383 (5th Cir. 2020), we stated that
our case law recognizes “two exceptions to the general rule that knowing and
voluntary appellate and collateral-review waivers are enforceable: first,
ineffective assistance of counsel, and second, a sentence exceeding the
statutory maximum.” 953 F.3d at 389–90 (internal citation omitted). Barnes
cited United States v. Leal, 933 F.3d 426 (5th Cir.), cert. denied, 140 S. Ct. 628
(2019) as the “first published case, in this circuit, specifically to adopt that
[second] exception,” though a prior unpublished opinion had purported to adopt
it as well. Id. at 390 n.10 (citing Leal, 933 F.3d at 431, and United States v.
Hollins, 97 Fed. App’x 477, 479 (5th Cir. 2004) (per curium)).
In Leal, we held that a defendant could argue on appeal that the amount
in his restitution order exceeded the statutory maximum notwithstanding a
valid appeal waiver that lacked an express reservation to that effect. 933 F.3d
at 431–32. We explained that it was “of no moment” whether Leal expressly
reserved the right to appeal such a claim because, as we previously stated in
dicta in United States v. Keele, an argument that the restitution amount
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exceeded the statutory maximum “would not be barred by an appeal waiver.”
Leal, 933 F.3d at 430 (internal quotation marks and citation omitted).
Leal also relied on the “instructive and apposite” reasoning of United
States v. White, 258 F.3d 374, 380 (5th Cir. 2001), which set forth the principle
that a plea agreement cannot waive an argument raised on appeal that the
factual basis is insufficient to support a defendant’s guilty plea. Leal, 933 F.3d
at 430. Leal stated that the reasoning in White applied “with considerable force
to the right to be free of a sentence exceeding the statutory maximum[.]” Id.
at 431. This was “particularly so in Leal’s case because his plea agreement
stated that any sentence imposed would be ‘solely in the discretion of the
Court,’ ‘so long as it is within the statutory maximum.’” Id. (emphasis in
original). Importantly, Leal explained that this language was significant
because it was reflective of defendants’ and the Government’s shared
understanding that promises in plea agreements must be in accord with the
law and that the district court will act legally in implementing the agreement
and imposing the sentence, including ordering restitution.1 Id.
Lastly, the Leal court noted its holding was consistent with at least seven
other circuits that recognized an exception to enforcement of an appeal waiver
1 Although the appeal waiver provisions of Leal’s and Kim’s plea agreements are
materially similar, see Leal, 933 F.3d at 428, we take note that Kim’s plea agreement lacks
certain language that appeared elsewhere in Leal’s plea agreement. Specifically, Leal’s plea
agreement noted that “[t]he defendant fully understands that the actual sentence imposed
(so long as it is within the statutory maximum) is solely in the discretion of the Court.” Id.
However, we need not be concerned with this difference. In Barnes, we recognized that Leal’s
holding was not contingent on the language in the plea agreement. See 953 F.3d at 389–90
(recognizing the Leal exception without qualification). In doing so, we implicitly
acknowledged that the language in Leal’s plea agreement stating that the district court had
discretion to impose a sentence “so long as it is within the statutory maximum” merely
provided additional support for Leal’s holding because it reflected the parties’
acknowledgment of the legal truism that a court must not impose a sentence, including an
order of restitution, that is unauthorized by law. See Bond, 414 F.3d at 545 (“Everyone knows
that a judge must not impose a sentence in excess of the maximum that is statutorily specified
for the crime.”).
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when the sentence exceeds the statutory maximum, and further noted that the
Supreme Court, in Garza v. Idaho, had acknowledged that “no appeal waiver
serves as an absolute bar to all appellate claims, and all jurisdictions appear
to treat at least some claims as unwaiveable, including, in some jurisdictions,
claims that a sentence . . . exceeds the statutory maximum authorized.” Id.
(quoting Garza, 139 S. Ct. 738, 744–45 & n.6 (2019) (internal quotation marks
omitted).
We conclude that Leal’s holding controls the outcome in the present
case.2 According to Leal, “a district court imposes a sentence expressly
foreclosed by statute when it orders restitution . . . for losses not proximately
caused by the defendant,” 933 F.3d at 431 (citing Winchel, 896 F.3d at 389;
CM&I, 677 F.3d at 752), and a plea agreement’s failure to expressly reserve
the right to raise a statutory maximum challenge is “of no moment” because
“an ‘in excess of the statutory maximum’ challenge, if properly raised on
appeal, would not be barred by an appeal waiver.” Id. at 430 (quoting Keele,
755 F.3d at 756). While the Government argues that Kim “waived any right
to challenge any potential illegality of his sentence,” Leal states that “even
when a defendant, prosecutor, and court agree on a sentence, the court cannot
give the sentence effect if it is not authorized by law.” Id. at 430–31 (alteration
omitted).
In sum, based on our prior case law it is clear that an otherwise valid
appeal waiver is not enforceable to bar a defendant’s challenge on appeal that
his sentence, including the amount of a restitution order, exceeds the statutory
maximum, notwithstanding the lack of an express reservation to bring such a
2 In Leal, restitution was ordered pursuant to 18 U.S.C. § 2259, which mandates
restitution for certain child pornography offenses, rather than pursuant to 18 U.S.C. § 3663A.
However, this difference is not relevant to the appeal waiver issue.
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challenge. Accordingly, Kim’s challenge to the legality of his restitution order
is not barred, and we can consider the merits of his argument.
IV. Calculation of Restitution Amount
The district court ordered Kim to pay $606,250 in restitution pursuant
to the MVRA. While Kim does not dispute that he owes $30,000 in restitution
based on the 24 counterfeit LOL motherboards that he sold to the CHS, he
challenges the remainder of the restitution amount, $576,250, arguing that it
is based on the probation officer’s speculation that Muraki owed Kim an
outstanding debt of $200,000 that represented 461 counterfeit motherboards.
The MVRA authorizes restitution to a victim “directly and proximately
harmed by the defendant’s offense of conviction.” United States v. Sharma,
703 F.3d 318, 322 (5th Cir. 2012) (internal quotation marks and citation
omitted). The MVRA is meant to reimburse the victim’s actual loss and should
not be used to penalize defendants. Id.; see also United States v. Beydoun, 469
F.3d 102, 107 (5th Cir. 2006) (“The MVRA does not permit restitution awards
to exceed a victim’s loss.”). Thus, “excessive restitution awards cannot be
excused by harmless error; every dollar must be supported by record evidence.”
Sharma, 703 F.3d at 323. The Government has the burden to prove by a
preponderance of the evidence the amount of loss suffered by a victim that
results directly from the defendant’s offense of conviction. Beydoun, 469 F.3d
at 107 (citing § 3664(a), (e)). Because of the MVRA’s proximate cause
requirement, it is possible that the “government’s proof was sufficient to
establish a violation of the [criminal infringement] statute and support a
sentence enhancement, but it was insufficient to establish that the actions
caused the victims an actual loss” for purposes of ordering restitution. Id.
We review de novo whether a restitution award exceeds the statutory
maximum, C&MI, 677 F.3d at 752, and review for abuse of discretion a district
court’s determination of a legally permissible restitution amount, United
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States v. Mahmood, 820 F.3d 177, 196 (5th Cir. 2016). “A trial court abuses its
discretion when its ruling is based on an erroneous view of the law or a clearly
erroneous assessment of the evidence.” United States v. Crawley, 533 F.3d 349,
358 (5th Cir. 2008) (internal quotations marks and citation omitted). The
district court’s calculation of the restitution amount is a factual finding that is
reviewed for clear error. See United States v. Read, 710 F.3d 219, 231 (5th Cir.
2012).
In concluding that Kim owed $606,250 in restitution,3 the district court
implicitly credited FBI agent Drebenstedt’s testimony that Muraki told him
that she owed Kim $200,000 for the purchase of equipment, supplies, and
motherboards and implicitly rejected Muraki’s affidavit, executed two years
later, in which she contradicted these earlier statements. The district court
also adopted the methodology utilized in the PSR to convert the alleged amount
owed into a quantifiable number of counterfeit motherboards for restitution
purposes—i.e., that the outstanding $200,000 represented 461 counterfeit LOL
motherboards at an average cost of $434 each, which, when multiped by the
retail value of $1,250, equaled restitution of $576,250.4 In accepting this
calculation, the district court erred because the Government failed to carry its
burden of properly establishing the number of infringing items placed into
commerce that Kim was responsible for and the resulting harm to Scientific
Games in terms of lost net profit.
3 The court noted that “[r]estitution owed shall be paid jointly and severally” between
Kim and his co-defendant.
4 Under the “Victim Impact” heading, the PSR states that the probation office provided
Scientific Games (the “victim” under the MVRA) with information required by statute, see §
3664(d)(2)(A), and that “[r]eceipt of the Declaration of Losses remains pending.” Neither Kim
nor the Government reference any declaration in their briefs, and we have not located any
declaration in the record.
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First, regarding the number of infringing items, we have previously held
that there is no loss for restitution purposes for counterfeit items not placed in
commerce. In United States v. Beydoun, the defendant conspired “to import
cigarette rolling papers falsely trademarked as ‘Zig–Zags’ for resale in the
United States” by purchasing low-quality papers and repackaging them using
Zig–Zag booklet covers, and created more than one million counterfeit booklets.
469 F.3d at 104. On appeal, Beydoun argued that the district court erred in
ordering a restitution amount based on the one million booklets because only
32,640 booklets were “conclusively proven to have been shipped for
distribution.” Id. at 105, 107. We agreed, noting that “the government did not
contend that all one million booklets were distributed or sold” and its evidence
was therefore “insufficient to establish that the actions caused the victims an
actual loss.” Id. at 107. We explained that “there was no actual loss to the
legitimate sellers if the booklets were never placed into commerce and sold,”
and remanded for the district court “to re-analyze the government’s evidence
and determine the number of items actually . . . put into the market to compete
with legitimate Zig–Zag papers.” Id. at 108.
The same result follows here. Based on the current record, the
Government has not proven by a preponderance of the evidence that Scientific
Games’ purported loss was proximately caused by Kim’s offense, see Beydoun,
469 F.3d at 107, in part because the PSR’s methodology was based on
speculation regarding the number of counterfeit motherboards that $200,000
could have purchased. This conclusion is not supported by the record.
Drebenstedt testified that Muraki told him that she owed Kim $200,000 for the
purchase of equipment or supplies and motherboards, thus clearly
contradicting a conclusion that the entire amount was used to purchase
motherboards, let alone counterfeit LOL motherboards. Moreover, though
agents seized motherboards from 103 gaming machines from Muraki’s game
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room, not all of the motherboards were LOL motherboards. Finally, the record
indicates that at some point before September 2015 Kim sold authentic LOL
motherboards, which suggests that he could have sold authentic motherboards
to Muraki.
Second, regarding the amount of actual harm to Scientific Games, we
have previously stated that a restitution amount in a case involving infringing
or counterfeit goods should be calculated using the “lost net profit” suffered by
the victim of the infringement, rather than the retail value of the goods.
Beydoun, 469 F.3d at 108 (“Because the purpose of the MVRA is to compensate
a victim for its losses, the appropriate measure in this commercial setting is
lost net profit.”). Calculating the restitution amount based on lost net profit
ensures that the victim will be compensated for the actual loss suffered.
Basing restitution on the retail value of the goods disregards the costs incurred
in manufacturing and selling legitimate goods and could therefore result in the
victim receiving a windfall amount that exceeds the actual loss caused by the
infringement. The MVRA does not authorize such an excess penalty. Id. at
107. Here, the district court—copying from the PSR—used the $1,250 retail
value of a LOL motherboard to calculate the restitution order, rather than
determining the net profits that Scientific Games lost due to Kim’s actions.
This was error.
Because it is unclear how much, if any, of the alleged outstanding
$200,000 was spent specifically on counterfeit LOL motherboards, and also
unclear what the resulting loss in net profit was to Scientific Games, we
conclude that the district court erred in ordering restitution based on the
speculative loss amount contained in the PSR. See Beydoun, 469 F.3d at 108;
accord United States v. Jones, 616 Fed. App’x 726, 728 (5th Cir. 2015) (stating
that counterfeit pills that were not placed in commerce may not be included in
the restitution calculation); Sharma, 703 F.3d at 324 (rejecting a restitution
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award where the adopted PSR did not indicate a meaningful scrutiny of the
sizeable, “obvious mistakes” in the loss calculations submitted by the victims
and where the defendant submitted rebuttal evidence). On remand, the
district court should “re-analyze the government’s evidence” and determine the
number of counterfeit LOL motherboards actually sold “and put into the
market to compete with legitimate [LOL games]” and the net profit lost by
Scientific Games as a result. Beydoun, 469 F.3d at 108.
Outcome: For the foregoing reasons, the district court’s restitution order is
VACATED and this case is REMANDED for redetermination of restitution.
Plaintiff's Experts:
Defendant's Experts:
Comments: