Criminal – Government Contract Fraud – Aviation Fuel Contracts – Restitution

In the government’s appeal of defendant’s probationary sentence in connection with his guilty plea to fraud charges from his participation in a procurement scheme involving aviation fuel contracts, the 4th Circuit vacates defendant’s sentence and remands for resentencing, and orders the district court to reconsider its determination that the Defense Energy Support Center was not entitled to restitution.

The government challenges the probationary sentence of Paul Wilkinson in connection with his guilty plea to various fraud charges stemming from his participation in a government procurement fraud scheme involving aviation fuel contracts. The government also challenges the district court’s failure to award the Defense Energy Support Center (DESC) $592,922.00 in restitution under the Mandatory Victims Restitution Act of 1996. We vacate Wilkinson’s sentence and remand with instructions for: (1) resentencing; and (2) reconsideration of the district court’s determination that DESC was entitled to no restitution under the MVRA.

Unfortunately the district court did not provide us with anything close to a sufficient explanation of its rationale in making its loss finding with respect to DESC that would enable us to review such finding under the clearly erroneous standard. We have no idea whether the district court accepted defendant’s argument that, assuming DESC’s administrative costs as calculated by the government are theoretically recoverable, the government nonetheless failed to carry its burden of proof because it offered no documentary evidence to support such costs.

We vacate the sentencing portion of the judgment and remand for resentencing with instructions that the district court explain in detail why it believes DESC’s claimed actual losses are not sufficiently supported by expert testimony for the purposes of calculating defendant’s advisory guidelines sentencing range and awarding DESC restitution under the MVRA.

Vacated and remanded

Concurrence & dissent

Moon, J.: I concur with the majority regarding the administrative cost finding. Because the district court may have erred as a matter of law, I agree that we should remand as to that element of loss.

However, I find no clear error in the loss findings with regard to either the higher spot fuel purchases or the higher contract prices. I would affirm the district court as to those findings.

U.S. v. Wilkinson (Hamilton, J.) No. 09-4018, Jan. 4, 2010; USDC at Baltimore, Md. (Nickerson) Nickolai G. Levin, USDOJ, for appellant; Gordon Mehler for appellee. VLW 010-2-010, 22 pp.