In this case, the defendant committed fraud against a major company using false invoices, depriving said company of millions of dollars. This company initiated its own investigation, which also cost millions of dollars. The defendant was found guilty of wire fraud.
During sentencing, the Government asked that the Defendant be ordered to pay as restitution the costs of the company’s private investigation. The District Court agreed, and the Fifth Circuit affirmed.
Because there was a conflict amongst the circuits on this issue, the U.S. Supreme Court took the case and unanimously reversed. In an opinion per Justice Breyer, the U.S. Supreme Court held that the words “investigation” and “proceedings” are limited to government investigations and criminal proceedings under the relevant provision of the Mandatory Victim’s Restitution Act.
The case is Lagos v. United States, 16-1519