(CN) – Three men convicted of illegally harvesting rock lobsters in South Africa and importing them to the U.S. must pay a $22.4 million restitution order, the 2nd Circuit ruled.
Arnold Bengis and Jeffrey Noll pleaded guilty in Manhattan Federal Court to conspiracy to commit smuggling and to violating the Lacey Act, which bans trade in illegally retrieved wildlife; David Bengis pleaded guilty to conspiracy to violate the Lacey Act.
According to prosecutors, the men harvested rock lobsters along the coast of South Africa from 1987 to 2001, and shipped them to the United States through their company, Hout Bay Fishing Industries.
South Africa uncovered the scheme in 2001 when it seized a container of the lobsters. The country declined to prosecute the men, but charged Hout Bay with overfishing.
The men were indicted in the U.S. in 2004, and after entering their guilty pleas, they were sentenced to prison terms of varying length and ordered to pay $13,3 million to the United States.
Although the plea agreements acknowledged that further restitution was a possibility, the district court deferred addressing it. Later, the United States sought restitution on behalf of South Africa, but the court rejected the effort, holding that the nation had not been the “victim” of the defendant’s offenses under U.S. law.
The 2nd Circuit threw out the decision in 2011, and the United States moved to dismiss the men’s appeal of the restitution order, because they refused to comply with a deposit to transfer assets to a Swiss bank.
“[A]lthough we are troubled by the defendants’ apparent efforts to place their assets beyond the court’s reach rather than comply with the deposit order, the SG Hambros assets appear to remain available to satisfy the restitution award and the district court’s contempt power reaches the defendants,” U.S. Circuit Judge John M. Walker Jr. wrote.
The men argued that the order violates their Sixth Amendment rights because the restitution amount was not based on a value of lobsters decided by a jury.
But Walker found that under the Mandatory Victims Restitution Act and Victim and Witness Protection Act, no maximum restitution amount is specified.
“Therefore, a judge cannot find facts that would cause the amount to exceed a prescribed statutory maximum,” he wrote.
The defendants cited Southern Union Co. v. United States, where a jury found the defendant had violated an environmental statute but could not be assessed an $18 million fine because it exceeded the $50,000 statutory maximum.
“In this case there never was a determinate maximum restitution amount that defendants faced; under the MVRA, restitution is always determined with respect to the value of property that is lost,” the three-judge panel found. “The district court could not, and did not, exceed a maximum that did not exist.”
It held that because David Bengis only allocated to involvement with the conspiracy from 1999 to 2001, his portion of the order potentially may not include any actions by the other defendants before 1999.
“[I]f David Bengis’s understanding of the scope of the conspiracy he joined in 1999 was such that he knew or reasonably should have known about some or all of the conspiracy’s past imports, his restitution order should encompass those amounts,” Walker wrote.” “However, if David Bengis joined the conspiracy without reasonable knowledge of his co-conspirators’ past activities, then he should not be held liable for the loss caused by those activities.”
The district court must decide whether Bengis knew or should have known the scope of the activities he joined.
The U.S. Attorney’s Office for the Southern District of New York declined to comment. Attorneys representing the defendants could not be reached by press time.
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