United States v. Swor

The panel held that the district court abused its discretion in its restitution orders for defendant Shawn Swor because it included in the amount losses suffered by victims from a scheme too attenuated from the fraud that Swor conducted.

Shawn Swor, a mortgage broker, co-founded and profited from a fraudulent business scheme and was later convicted for investment fraud. Swor argued, on appeal, he should have gotten a “minor role” sentencing reduction and different restitution order by the district court. The district court reasoned that Swor should pay restitution, pursuant to the Mandatory Victims Restitution Act of 1996 ("MVRA"), because he was “responsible for anything that’s foreseeable” from his scheme, including the introduction he made between one of his partners, Dan Two Feathers and a prospective client, Eric Schultz. The MVRA says restitution “may be awarded only for losses for which the defendant’s conduct was an actual and proximate cause.” The Ninth Circuit noted that the “”the causal nexus between [Swor’s] conduct and [Schultz’s] loss,” . . . amounted, essentially, to introducing two people to each other in the course of carrying out a fraudulent scheme, where the two later, and independently, became involved in a separate operationally different fraudulent scheme.” The panel said the connection established the introduction as a “but for” cause, but the “intervening events . . . made Swor’s connection to Schultz's losses (actually, that of his victims) in the . . . scheme simply “too attenuated” to impose liability on Swor for Schultz’s victim’s losses. Thus, the panel held that the district court “abused its discretion in including the $166,887.09 sum in Swor’s restitution order,” vacated the sentence, and remanded to amend the order, with a maximum of $580,548.02. However, the panel held that the district court “did not clearly err in finding that [Swor] failed to establish that he played a minor role in the offense” so was not eligible for a reduction. AFFIRMED IN PART, VACATED IN PART, and REMANDED.