Mitchell Stein, a former attorney, challenged the district court’s loss and MVRA restitution determination in a mail, wire, and securities fraud prosecution arguing that the Government had failed to demonstrate both factual and legal causation for the loss amount. MVRA Restitution | Loss Amount Inadequate | Sentencing.net
Using the same standard for Stein’s loss and restitution challenge, the Eleventh Circuit held that it agreed “with Mr. Stein that to establish an actual loss figure under the guidelines or the MVRA restitution based on investors’ losses, the government must prove that, in deciding to purchase Signalife stock, investors relied on the fraudulent information Mr. Stein disseminated. The district court found that more than 2,000 investors relied on Mr. Stein’s fraudulent information, but the only evidence supporting this finding was the testimony of two individuals that they relied on Mr. Stein’s false press releases and generalized evidence that some investors may rely on some public information. This evidence was insufficient to permit reliance to be inferred for over 2,000 investors. Accordingly, the district court erred in calculating an actual loss figure based on the losses of all these investors. The district court also failed to determine whether intervening events caused the Signalife stock price to drop and, if so, whether these events were unforeseeable such that their effects should be subtracted from the actual loss figure.”
The case was remanded for further proceedings. United States v. Stein, No. 14-15621 (11th Cir. 2017).