Why Didn’t the Mandatory Victims Restitution Act Apply in This Case?
In United States v. Seabrook, the defendant was the co-founder of a hedge fund called Platinum Partners, whose representatives met with the co-defendant, Seabrook, in attempts to attract additional investors. Seabrook agreed and invested $20 million on one condition: He would get paid for it.
Seabrook was the long-time president of COBA, New York City’s largest union for corrections officers. His powers extended to COBA’s finances, including the retirement benefits program with holdings exceeding $70 million.
The defendant devised a formula in which Platinum would pay Seabrook a portion of the profits from COBA’s investment, which they estimated would be between $100,000 to $150,000. After the first year, Seabrook received merely $60,000.
When the scheme was uncovered, Platinum declared bankruptcy and COBA lost $19 million of its investment, so the district court viewed COBA as a victim of Platinum’s convicted wire fraud offense, claiming the $60,000 bribe was a “mechanism” for profiting from the crime.
As a result, Platinum was ordered to pay a $19 million restitution to the victim, but the defendant appealed, arguing that COBA was not a direct or proximate victim of the offense. The Mandatory Victims Restitution Act “does not authorize the court to order a defendant to pay restitution to any person who was not a victim of the [convicted] offense,” explained the Second Circuit. Thus, the wire fraud offense did not cause COBA’s losses because such crime occurred after COBA’s investment.
In the end, the Second Circuit reversed the defendant’s mandated restitution to COBA, who was deemed not a victim of the wire fraud offense.
Were You Charged with Wire Fraud in Galveston?
United States v. Seabrook is a prime example of the value of appeals. Do not take your verdict for an answer, as you may enjoy a favorable outcome like the defendant in this case did. Our Galveston white collar crime defense lawyers at Zendeh Del & Associates, PLLC are ready to help you understand your charges and explore every possible avenue for overcoming them. With more than 60 years of combined legal experience, our attorneys have what it takes to help you come out on top.
Contact us at (409) 204-5566 to learn more about how our firm can champion your best interests!