Lagos v. United States

Whether 18 U.S.C. § 3663A(b)(4) covers costs that were “neither required nor requested” by the government, including costs incurred for the victim’s own purposes and unprompted by any official government action.

The Mandatory Victims Restitution Act (MVRA) mandates restitution from federal defendants to their victims for a wide spectrum of expenses, but specifically expenses derived from “participation in the investigation or prosecution.” In the present case, Petitioner pled guilty to counts of conspiracy and wire fraud. Petitioner was required to pay $4.8 million to the victim, General Electric Capital Corporation (GECC), for GECC’s own internal investigation and consulting expenses incurred as a result of their loss. The U.S. Court of Appeals for the Fifth Circuit affirmed, citing precedent that broadly interpreted 18 U.S.C. § 3663A(b)(4) to include GECC’s expenses. Particularly, the statute covered all forensic experts, legal consultation, and other fees because they were all caused by Petitioner’s actions. The court made no comment as to the reasonability of the expenses. Petitioner emphasizes a split among the circuits, noting that the Second, Sixth, Seventh, and Eighth circuits have all taken a “broader view” than the D.C. circuit in United States v. Papagno, 639 F.3d 1093 (D.C. Cir. 2011). Further, Petitioner highlights a division within the Fifth and Ninth circuit panels, where judges within those panels disagreed with the reasoning, but were nonetheless bound by precedent. Petitioner urges the Supreme Court to resolve the circuit conflict by adopting the narrow view of Papagno.