Anonymous07/24/2022
These are the first 6 pages of a total of 32 pages of Memorandum and Order.
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Case 1:18-cr-00204-NGG-VMS Document 1036 Filed 05/28/21 Page 1 of 32 PageID #: 19427
MEMORANDUM & ORDER
18-CR-204 (NGG)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA,
-against-
KEITH RANIERE
Defendant.
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NICHOLAS G. GARAUFIS, United States District Judge.
On June 19, 2019, following a six-week trial, a jury convicted
Defendant Keith Raniere of racketeering, racketeering conspir-
acy, wire fraud conspiracy, forced labor conspiracy, sex
trafficking conspiracy, and two counts of sex trafficking. (Jury
Verdict (Dkt. 735).) On October 27, 2020, this court sentenced
Raniere principally to a 120-year term of imprisonment. (Stc’g
Mem. (Dkt. 966) at 18-19.) At that time, the court directed the
Government to submit any claims of restitution within 90 days.
(Id. at 20; Tr. of Oct. 27, 2020 Stc’g of Keith Raniere (“Stc’g Tr.”)
(Dkt. 1002) at 154.)
On January 27, 2021, the Government provided the court with
copies of the restitution requests it had received from putative
victims, a letter setting forth its proposed methodology for eval-
uating those requests, and its recommendations regarding
restitution. (See Jan. 27, 2021 Letter re Restitution ( “Gov’t Res-
titution Ltr.”) (Dkt. 997); Ex. A. to Restitution Ltr. (“Gov’t
Recommendations”).) In an order dated January 27, 2021, the
court acknowledged receipt of the Government’s submission and
indicated that it would award restitution after the Defendant had
an opportunity to respond. (See Jan. 27, 2021 ECF Order.) Rani-
ere filed a response on March 23, 2021. (See Raniere Letter in
Reply to Gov’t’s Request for Restitution (“Raniere Restitution
Ltr.”) (Dkt. 1018).)
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The court has reviewed the parties’ submissions and has made
certain factual and legal determinations, as set forth below, that
will guide the terms of its forthcoming restitution order. The
court has also identified certain issues that warrant further brief-
ing and, where available, supplemental evidence. Accordingly,
the court DIRECTS the parties to submit supplemental letter
briefs, along with any necessary exhibits and affidavits, and for
the Government to submit a revised set of restitution recommen-
dations that are consistent with the findings of fact and legal
conclusions set forth below.1
I. BACKGROUND
Raniere was convicted of seven counts of conviction, as follows:
• Count One: Racketeering Conspiracy, in violation of 18
U.S.C. §§ 1962(d) and 1963(a). (Presentence Investiga-
tion Report (“PSR”) ¶ 2.)
• Count Two: Racketeering, in violation of 18 U.S.C. §§
1962(c) and 1963(a). (PSR ¶ 3.)
• Count Six: Conspiracy to provide and obtain forced labor,
in violation of 18 U.S.C. § 1594(b). (PSR ¶ 20.)
• Count Seven: Wire Fraud Conspiracy, in violation of 18
U.S.C. §§ 1349 and 1343. (PSR ¶ 21.)
• Count Eight: Sex Trafficking Conspiracy, in violation of
18 U.S.C. §§ 1594(c) and 1591(b)(1). (PSR ¶ 22.)
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1 The court requests that the Government, in making its revised restitution
recommendations, specify for each recommended award exactly which of
the claimed losses it regards as compensable, and the amount(s) that it
recommends awarding in order to compensate for those losses, so that the
court and Defendant can easily discern how the Government arrived at the
total figures for each of its recommended awards.
2
• Count Nine: Sex Trafficking of Jane Doe 5, in violation of
trafficking of 18 U.S.C. §§ 1591(a)(1), (a)(2), and (b)(1).
(PSR ¶ 23.)
• Count Ten: Sex Trafficking of Jane Doe 8, in violation of
trafficking of 18 U.S.C. §§ 1591(a) and (b)(1). (PSR ¶
24.)
The two racketeering counts of conviction are predicated on nu-
merous indictable acts including, inter alia, sexual exploitation of
a minor, Jane Doe 2; identity theft and conspiracy to commit
identify theft of multiple individuals (Jane Doe 1, James Lop-
erfido, Edgar Bronfman, Sr., Jane Doe 3, and Jane Doe 7);
trafficking and document servitude of Jane Doe 4; and sex traf-
ficking and forced labor of Jane Doe 5. (PSR ¶¶ 4, 6-7, 9-11,13-
15, 17-27.) Counts Six, Seven, and Eight concern conspiracies by
Raniere and his co-defendants to obtain labor, assets, and the
performance of sexual acts from lower-ranking members of a se-
cret organization known as “DOS.” (PSR ¶¶ 20-22.) Counts Nine
and Ten concern the sex trafficking of two individual lower-rank-
ing DOS members. (PSR ¶¶ 23-24.)
To date, 100 putative victims have submitted requests for resti-
tution, including Jane Doe 2, Jane Doe 4, Jane Doe 5, Jane Doe
8, and James Loperfido, as well as several additional lower-rank-
ing members of DOS, and many individuals who were not
affiliated with DOS but who nonetheless claim that they were
harmed by Raniere and his co-defendants’ criminal conduct. (See
Gov’t Restitution Ltr.)
II. LEGAL STANDARD
In evaluating restitution claims, the court recognizes that “the
Government bears the burden of proving a victim’s actual loss by
a preponderance of the evidence.” United States v. Finazzo, 850
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F.3d 94, 117 (2d Cir. 2017). 2 The Second Circuit has “never used
the term ‘actual’ in this context to mean ‘mathematically precise’”
or “adopted a one-size-fits-all standard of precision for applica-
tion in restitution cases.” United States v. Gushlak, 728 F.3d 184,
195 (2d Cir. 2013). Rather, what is required is “only a reasonable
approximation of losses supported by a sound methodology.” Id.
at 196.
Two statutes relevant to this case provide for mandatory restitu-
tion for victims of certain crimes.3 First, the Trafficking Victims
Protection Act of 2000 (“TVPA”) provides for mandatory restitu-
tion for “the full amount of the victim’s losses” for crimes
including forced labor, sex trafficking, and document servitude.
18 U.S.C. § 1593(b)(1). In Raniere’s case, counts Six (forced la-
bor conspiracy), Eight (sex trafficking conspiracy), Nine (sex
trafficking of Jane Doe 5), and Ten (sex trafficking of Jane Doe
8) are covered offenses that give rise to mandatory restitution
under the TVPA, as is Racketeering Act Nine (forced labor and
document servitude of Jane Doe 4). The TVPA defines “victim”
as “the individual harmed as a result of a crime under this chap-
ter.” Id. § 1593(c).
Under the TVPA, victims are entitled to full compensation for
“any costs incurred, or that are reasonably projected to be in-
curred in the future, by the victim, as a proximate result of the
offenses involving the victim,” including, inter alia, “medical ser-
vices relating to physical, psychiatric, or psychological care,” “lost
income,” and “reasonable attorneys’ fees.” Id. §§ 1593(b)(3),
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2 When quoting cases and unless otherwise noted, all citations and quota-
tion marks are omitted, and all alterations are adopted.
3 As noted below, the court believes that Jane Doe 2 may be entitled to
mandatory restitution under an additional statute, the Amy, Vicky, and
Andy Child Pornography Victim Assistance Act of 2018, and it asks the
parties to address her eligibility to recover under that statute in their sub-
sequent letter briefs. See 18 U.S.C. § 2259.
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2259(c)(2). A victim’s compensable losses under the TVPA also
include “the greater of the gross income or value to the defendant
of the victim’s services or labor or the value of the victim’s labor
as guaranteed under the minimum wage and overtime guaran-
tees of the Fair Labor Standards Act.” Id. § 1593(b)(3).
Second, the Mandatory Victim Restitution Act of 1996 (“MVRA”)
requires that defendants convicted of certain crimes, including
crimes of violence or offenses against property that cause a “phys-
ical injury or pecuniary loss” to “an identifiable victim,” “make
restitution to the victim of the offense.” 18 U.S.C. § 3663A(a)(1),
(c). The MVRA applies to certain of Raniere’s crimes of convic-
tion, including racketeering, racketeering conspiracy, and wire
fraud conspiracy. (See PSR ¶ 166.)
The MVRA defines “victim” as “a person directly and proximately
harmed as a result of the commission of an offense for which
restitution may be ordered including, in the case of an offense
that involves as an element a scheme, conspiracy, or pattern of
criminal activity, any person directly harmed by the defendant’s
criminal conduct in the course of the scheme, conspiracy, or pat-
tern.” Id. § 3663A(a)(2). “In restricting its definition of ‘victim’ to
persons proximately harmed by the defendant’s acts, the MVRA
aims to limit restitution to those harms that have a sufficiently
close connection to the conduct at issue.” United States v. Thomp-
son, 792 F.3d 273, 277 (2d Cir. 2015). Thus, the MVRA’s
“definition of ‘victim’ governs the calculation of the reimbursable
loss itself.” Id.
“[C]ourts have uniformly read [the MVRA] to provide for resti-
tution payable by all convicted co-conspirators in respect of
damage suffered by all victims of a conspiracy, regardless of the
facts underlying counts of conviction in individual prosecutions.”
United States v. Boyd, 222 F.3d 47, 50 (2d Cir. 2000). However,
the MVRA “does not authorize the court to order a defendant to
pay restitution to any person who was not a victim” of an offense
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of conviction. United States v. Reifler, 446 F.3d 65, 121 (2d Cir.
2006). “While the language [in the MVRA’s definition of ‘victim’]
expands what it is that will give rise to compensable loss when a
scheme, conspiracy or pattern is involved, the reference point to
which such conspiracy is tied remains the ‘offense’ of which the
defendant has been convicted.” In re Local #46 Metallic Lathers
Union & Reinforcing Iron Workers & Its Associated Benefit & Other
Funds, 568 F.3d 81, 87 (2d Cir. 2009). In other words, conduct
committed “in the course of the scheme or conspiracy [may] be
considered as a basis for determining compensable harm” only if
the “scheme, conspiracy, or pattern of criminal activity” that en-
compasses that conduct is an element of the offense of
conviction. Id.
Where more than one defendant has contributed to a victim’s
loss, “the court may make each defendant liable for payment of
the full amount of restitution or may apportion liability among
the defendants to reflect the level of contribution to the victim’s
loss and the economic circumstances of each defendant.” 18
U.S.C. § 3664(h). If a defendant owes restitution to multiple vic-
tims, “the court may provide for a different payment schedule for
each victim” based on the victims’ economic circumstances and
the nature and extent of their losses. Id. § 3664(i).
III. DISCUSSION
The Government recommends that the court award restitution to
25 of the 100 putative victims who submitted claims in connec-
tion with this case. 4 (See Gov’t Recommendations.) The
Government identifies 18 of those 25 claimants as victims under
§ 1593 of the TVPA. The other claimants, including the seven to
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4 Based on the representations in the Government’s letter of January 27,
the court includes in this tally Jane Doe 4, for whom the Government has
not yet formally recommended a specific restitution award because it was
not able to review her request in connection with its prior submission and
recommendation. (See Gov’t Restitution Ltr. at 4, 4 n.3.)
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