Wednesday, August 12, 2009

You Can’t Bet On It

United States v. Battista, No. 08-3750-cr (2d Cir. August 6, 2009) (Walker, Wesley, Wallace, CJJ)

James Battista was part of an illegal NBA gambling operation. He pled guilty to conspiring to transmit wagering information, in violation of 18 U.S.C. §§ 371 and 1084, and his sentence included restitution to the NBA. On appeal he unsuccessfully challenged this order.


The gambling scheme began with a corrupt NBA referee, who would transmit “picks” through an intermediary to Battista, who would then place bets on those games. Battista paid the ref a fee for each game where the ref picked the winner. The ref and the intermediary each pled guilty to wire fraud, while Battista pled guilty to the wagering conspiracy. At sentencing, the district court ordered the three defendants to pay more than $ 200,000 in restitution to the NBA.

The Appeal

On appeal, Battista argued that the NBA was not a “victim” of his wagering offense and that the league’s attorneys’ fees and investigative costs were not recoverable under the restitution statutes. The circuit affirmed.

The court first was asked to determine which restitution statute applied in Battista’s case. Under 18 U.S.C. § 3663A (the “MVRA”) full restitution is mandatory for certain types of offenses, including Title 18 “offense[s] against property ... including any offense committed by fraud or deceit.” 18 U.S.C. § 3663(c)(1)(A)(ii). Offenses not covered by the MVRA are covered by 18 U.S.C. § 3663 (the “VWPA”), under which restitution is discretionary, to be imposed only after the court balances the victim’s losses against the defendant’s resources.

Here, while Battista conceded that his offense conduct involved fraud or deceit, he argued that, since the statute under which he was convicted did not have fraud or deceit as an element, the MVRA did not apply to him. It is an open question whether the MVRA applies to fraudulent or deceitful conduct that is charged under a non-fraud or non-deceit statute, but the court did not resolve it here. It found that even if the discretionary VWPA applied, restitution under was proper. The district court’s findings as to Battista’s financial circumstances were not clearly erroneous. Moreover, the court properly considered the need to treat Battista and his co-defendants equally. They pled guilty to wire fraud and thus, for them, restitution was indisputably mandatory.

Next, the court held that the NBA was properly deemed a “victim” under the restitution statutes, since it was “directly and proximately harmed as a result of the commission of” Battista’s offense.

Finally, the court concluded that the NBA’s attorneys’ fees were recoverable. The restitution statutes contain a list of the kinds of losses that are covered, including “other expenses related to participation in the investigation or prosecution of the offense.” The district court properly included in the restitution order those attorneys’ fees that were “directly related to” the investigation as “other expenses.”



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