Tuesday, January 04, 2011

Be Careful What You Fish For

United States v. Bengis, No. 07-4895-cr (2d Cir. January 4, 2011) (Feinberg, Cabranes, Hall, CJJ)

Three defendants pled guilty to various offenses arising from their South African lobster fishing businesses; they illegally harvested large numbers of rock lobsters from South African waters for export to the United States, conduct that violated both South African and United States law. This opinion addresses the government’s appeal of the district court’s legal conclusion that South Africa was not entitled to restitution. The Circuit reversed.

The district court had first held that South Africa did not have a property interest in the illegally harvested lobsters. The appellate court disagreed. Under South African law, lobsters caught illegally are not the property of those who caught them. They are subject to seizure by the government, which can then sell them and keep the proceeds. Thus, the defendants’ conduct, which included evading the seizure of overharvested lobsters, deprived South Africa of that income stream.

The district court also held that South Africa was not a “victim” under the restitution statues because it failed to show that it suffered any loss caused by the defendants’ conduct. The Circuit again disagreed, even though the defendants pled guilty only to importing the lobsters into the United States. By smuggling the lobsters out of South Africa knowing that they had been unlawfully harvested, the defendants still deprived South Africa of the potential income from any seized, overfished lobsters.

Finally, the district court had concluded that calculating a restitution award would overly complicate and prolong the proceedings. But the Circuit noted that experts in the district court had already calculated likely loss amounts using two different methodologies. The Circuit selected the higher of the two and held that it “seems to us a sufficient loss calculation methodology under the circumstances presented by this case.” Unfortunately for the defendants, that methodology produced a loss in excess of $61 million.

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1 Comments:

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January 27, 2011 at 9:26 PM  

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