U.S.A. v. Lagos

Summarized by Aaron Kaufman , Gray Reed LLP
8 years 11 months ago

Case Type:

Business

Case Status:

Affirmed

Citation:

16-20146 (5th Circuit, Mar 17,2017) Not Published

Tag(s):

Ruling:

Mandatory Victims Restitution Act (“MVRA”) allows victim lender to recover, as restitution, legal fees incurred during the borrower's bankruptcy filing , as well as the expert and forensic accountant fees incurred during the investigation of the fraud.

Procedural context:

Appeal of District Court's restitution order following defendant's guilty plea to one count of conspiracy to commit wire fraud and to five counts of wire fraud. See 18 U.S.C. §§ 2, 1343, 1349.

Facts:

Defendant Lagos admitted that for two years, he and his co-conspirators misled GECC about the value of their accounts receivable to induce GECC to increase the amount of the revolving loan and to provide him and his co-defendants with uncollateralized funds. Their wire fraud scheme caused GECC to employ forensic experts to secure and preserve electronic data as well as lawyers and consultants to investigate the full extent and magnitude of the fraud and to provide legal advice relating to the fraud. Likewise, GECC incurred legal fees in a related bankruptcy proceedings. In its victim impact statements, GECC described how the defendants’ fraudulent scheme directly caused the defendants’ companies (the GECC borrowers) to file for bankruptcy. The bankruptcy court ordered GECC to continue to make advances to the defendants’ companies during the bankruptcy proceedings. Thus, the district court determined that the legal fees incurred by GECC during the related bankruptcy proceedings were directly caused by the defendants’ fraud for purposes of restitution.

Judge(s):

PRADO and HIGGINSON, This opinion is being entered by a quorum of this court pursuant to 28 U.S.C. § 46(d)

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