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Big Penalty for Crying Wolf,|Or, in This Case, Shipwreck

CINCINNATI (CN) - A young pilot who falsely reported a boat in distress must repay federal agencies that spent more than $489,000 in search-and-rescue efforts, the 6th Circuit ruled.

Danik Shiv Kumar was 19 on the night of March 14, 2012, when he spotted a flare coming from the water as he flew alone over a portion of Lake Erie.

He reported this to Cleveland Hopkins International Airport and then followed instructions to fly lower for a closer look but could not discern a boat on the lake.

"Yet, fearful of sounding stupid and hurting his chances of one day becoming a Coast Guard pilot, he reported that he saw additional flares going up," the decision states. "He described a 25-foot fishing vessel with four people aboard wearing life jackets with strobe lights activated."

The U.S. Coast Guard and Canadian Armed Forces then began a 21-hour search consisting of four vessels and two aircraft.

It was not until over a month later that Kumar admitted he fabricated the story, which led to a class D felony indictment for making a false distress call.

Kumar pleaded guilty and was sentenced in August 2013 to a three-month prison term, plus three years of supervised release. He was also ordered to repay the $489,000 spent during the search.

Kumar claimed on appeal that the court had no authority to demand restitution to the Canadian government, but a three-judge panel of the 6th Circuit unanimously sided with the government on this point Tuesday.

Here Section 3583(d) of Title 18 gives the sentencing court "discretion to prescribe, as a condition of supervised release, any condition that may be prescribed to a condition of probation, ... including restitution ... so long as it is reasonably related to the sentencing factors," the ruling by Judge David McKeague states.

"Clearly, the Canadian Armed Forces is a victim of Kumar's offense ... [and] there is no support for the notion that 88(c) reflects a congressional purpose to exclude victims other than the Coast Guard from recovery of losses caused by a false report," McKeague added.

The panel was divided, however, in shooting down Kumar's claim that it miscalculated how much he owes the Coast Guard.

As opposed to the Coast Guard costs directly attributable to his actions, Kumar challenged the "indirect costs," such as support costs, general and administrative costs, pension benefit adjustment, operating asset depreciation, and operating asset cost of capital, that the Coast Guard included in its calculation.

Kumar's expert witness said elimination of these costs would reduce the payment obligation to the Coast Guard from more than $277,000 to just over $118,000.

But the majority emphasized that Section 88(c) of Title 14 "makes one who gives a false report liable for all costs incurred by the Coast Guard as a result of his actions."

"There is no dispute that Kumar's false report proximately caused the mobilization of one Coast Guard aircraft and four vessels, together with their crews and related onshore personnel during a 21-hour period," McKeague added. "Nor is there any dispute about the full cost of these resources to the Coast Guard, as measured in hourly reimbursable rates in accordance with the accounting standards adopted by the Federal Accounting Standard Advisory Board. Nor is there any dispute that these accounting standards define 'full cost' as the total amount of resources used to produce the product or service, including direct and indirect costs."

In upholding the original amount of restitution, the judges admitted that "this is an onerous burden to place on the shoulders of a young man, but it is consonant with Congress's manifest intent to deal harshly with such hoaxes, in order to deter the diversion of critical resources away from true emergencies."

Judge Helene White argued in dissent that the Coast Guard had overcharged Kumar.

"Overhead and administrative costs related to research, headquarters, payroll processing, environmental impact studies, building maintenance, and other similar expenses are hardly costs incurred as a result of Kumar's false report," she wrote.

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