United States v. Yeung

It is insufficient to rely upon the outstanding principal balance as the basis for restitution in calculating a restitution award under the Mandatory Victims Restitution of Act of 1996, when the victim is a loan purchaser and not the loan originator. In addition, the proper valuation for returned collateral is the market value at time the victim takes possession, not the amount the victim is able to sell the property for at a later date.

Yeung was convicted as part of a fraudulent real estate scheme, and the district court held an evidentiary hearing to determine the amount of restitution. At the hearing, the district court relied on calculations that found the loss of the victims to be the outstanding principal balance of the loans, less the amount of any sale of the real property collateral returned to the victims through foreclosure sales. Yeung appealed arguing (1) the victims in this case were not victims under the Mandatory Victims Restitution Act of 1996 ("MVRA") as they were loan purchasers and not the loan originators; (2) there was no evidence as to the amount the victims paid for the loans from the loan originators and if Yeung was ordered to pay back the entire outstanding principal balance of the loan the victims would receive a windfall; and (3) the district court erred by reducing the restitution award by the amount the victims were able to sell the property for and not from the property's value on the date the victims gained title. The Ninth Circuit held: (1) the loan purchasers were victims under the MVRA because they purchased the loans from the loan originators prior to Yeung's fraud coming to light; (2) the district court erred by not having sufficient evidence as to the victims' actual loss because there was no evidence as to the amount the victims actually paid for the loans, therefore the district court had no reason to support the outstanding principal balance as a basis for restitution; (3) the amount of the real property collateral returned to the victims must be measured as of the date the victim took title to the collateral at the foreclosure sale and not what the victims were able to sell the property for at a later date; and (4) there was no error with respect to a victim who insured one of the loan originators and suffered a loss as a result. AFFIRMED in part, VACATED and REMANDED in part.