Opposition to the Government’s Restitution Memorandum — United States v. Keith Berman (No. 1:20-cr-00278)

Summary

Opposition to the Government's Restitution Memorandum, Document 209, filed July 8, 2024, in United States of America v. Keith Berman, Criminal No. 20-CR-278-TNM, in the U.S. District Court for the District of Columbia. Defendant Keith Berman states that, on the basis of the government's own calculations, restitution should be reduced to $302,104.19, because the government is still unable to prove that actual losses amounted to $1,043,618.20. The legal standard section discusses the Mandatory Victim Restitution Act and 18 U.S.C. § 3664(e). The filing closes with a request that restitution be payable through nominal periodic payments. The signature line reads /s/ Kevin B. Collins.

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“Opposition to the Government’s Restitution Memorandum — United States v. Keith Berman (No. 1:20-cr-00278).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-d-d-c-no-1-20-cr-00278-dkt-209-d-d-c-e898dd2867/, SHA-256 676dc0f70e43767206b246d46b98b1e644312ad7429d694fd7b8e8d57b50314a.

Full text

Case 1:20-cr-00278-TNM Document 209 Filed 07/08/24 Page 1 of 10

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA )
)
) CRIMINAL NO. 20-CR-278-TNM
v. )
)
KEITH BERMAN, ) UNDER SEAL
)
Defendant. )

OPPOSITION TO THE GOVERNMENT’S RESTITUTION MEMORANDUM

Defendant Keith Berman respectfully submits this Opposition to the Government’s

Restitution Memorandum. On the basis of the government’s own calculations, restitution should

be reduced to $302,104.19, because the government is still unable to prove that actual losses

amounted to $1,043,618.20, even after spending three years to gather evidence.

LEGAL STANDARD

The purpose of the Mandatory Victim Restitution Act (“MVRA”) is “essentially

compensatory,” not punitive: it serves “to restore a victim, to the extent money can do so, to the

position [the victim] occupied before sustaining injury.” United States v. Fair, 699 F.3d 508, 512

(D.C. Cir. 2012). The MVRA’s “authorization is accordingly limited to the actual, provable loss

suffered by the victim and caused by the offense conduct.” Id. Awarding restitution in excess of

the victim’s actual loss would be punitive in nature and thus fall outside the scope of the MVRA.

Id. Therefore, “[a]ny dispute as to the proper amount or type of restitution shall be resolved by

the court by the preponderance of the evidence” with the government bearing the burden to

establish the amount of loss suffered by the victim. 18 U.S.C. § 3664(e). Moreover, the district

court is required, when determining “the full amount of each victim’s losses,” id. § 3664(f)(1)(A),
Case 1:20-cr-00278-TNM Document 209 Filed 07/08/24 Page 2 of 10

to articulate the specific factual findings underlying its restitution order in order to enable appellate

review, Fair, 699 F.3d at 513.

The statute states that restitution is due to any person “directly and proximately harmed as

a result of the commission of [the] offense.” 18 U.S.C. § 3663A(a)(2). Because the MVRA only

authorizes courts to order restitution for actual, provable losses suffered by the victim, courts may

not order restitution for losses that are unsubstantiated or speculative. United States v. McCormick,

2023 WL 8697851, at *6 (D.D.C. Dec. 15, 2023). In other words, a court may award restitution

under the MVRA only for loss that flows directly from the specific conduct that is the basis of the

offense of conviction. United States v. Zhou, 838 F.3d 1007, 1013 (9th Cir. 2016). A court is

therefore authorized to order restitution for the offense of conviction, but generally not for other

related offenses of which the defendant was not convicted. Id.; United States v. Murry, 395 F.3d

712, 721 (7th Cir. 2005) (“[R]estitution is limited to the losses caused by charged conduct, i.e. the

offense of conviction. . . . Restitution may not be ordered for relevant conduct.”); United States v.

Dickerson, 370 F.3d 1330, 1341 (11th Cir.2004) (“[A] criminal defendant cannot be compelled to

pay restitution for conduct committed outside of the scheme, conspiracy, or pattern of criminal

behavior underlying the offense of conviction.”)

Once the amount is determined and ordered, the court must determine the manner and

schedule for payment of the restitution considering the financial situation of the defendant. 18

U.S.C. § 3572(d)(2); United States v. Grant, 715 F.3d 552 (4th Cir. 2013). The district court shall

specify the manner and schedule according to which the restitution is to be paid, considering the

following: “(A) the financial resources and other assets of the defendant, including whether any

of these assets are jointly controlled; (B) projected earnings and other income of the defendant;

and (C) any financial obligations of the defendant; including obligations to dependents.” 18 U.S.C.

2
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See McCormick, 2023 WL 8697851, at *2. Although the government has provided victim impact

statements (“VIS”), it has not substantiated all of the losses alleged in the VISs by a preponderance

of the evidence. Here, several of the VISs and accompanying transactions records do not provide

dates to show that DECN stock purchases occurred within the relevant time period. Nor does the

government provide any explanation for this discrepancy. See Gov’s Memo. at 2–3.

Consequently, Mr. Berman contests the government’s loss calculations for the following alleged

victims:

Gov’t Proposed
Name Proposed Notes Gov’t Exhibit
Reduction
Transaction records show
only two purchase
$7,976.74 -$5,000.00 7
transactions of DECN during
the relevant time period.
Transaction records show
only one purchase
$5,610.61 -$4,621.66 9
transaction of DECN during
the relevant time period.
Neither the VIS nor
$89,415.24 -$89,415.24 transaction records state 14
when buys were made.
Neither the VIS nor
transaction records state
$138,800.05 $-99,452.03 16
when all of the buys were
made.
Neither the VIS nor
$49,428.50 -$49,428.50 transaction records state 17
when buys were made.
Neither the VIS nor
$66,102.71 -$66,102.71 transaction records state 21
when buys were made.
Neither the VIS nor
$2,136.75 -$2,136.75 transaction records state 22
when buys were made.
Total $359,470.60 -$316,156.89

Awarding restitution in excess of the victim’s actual loss would be punitive in nature and thus fall

outside the scope of the MVRA. Fair, 699 F.3d at 512. Therefore, based upon the government’s

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own loss calculations, at least $316,156.89 should be subtracted from the government’s proposed

losses of $1,043,618.20. 4

II. The Factors for Determining the Manner and Schedule of Payment

Under 18 U.S.C. § 3664(f)(2), the court must set a payment schedule “in consideration

of—(A) the financial resources and other assets of the defendant, including whether any of the[]

assets are jointly controlled; (B) projected earnings and other income of the defendant; and (C)

any financial obligations of the defendant; including obligations to dependents.” See also United

States v. Villongco, 2016 WL 3747508, at *4 (D.D.C. July 11, 2016) (“The court must direct the

defendant to satisfy the restitution obligation in a particular manner, a direction predicated upon

an evaluation of the defendant’s particular financial circumstances.”).

These factors show that Mr. Berman’s financial circumstances are dire and he lacks any

ability to pay restitution.

A. Mr. Berman’s Financial Circumstances are Critically Deficient

18 U.S.C. § 3664(e) provides that the “burden of demonstrating the financial resources of

the defendant . . . shall be on the defendant.” The Presentence Investigation Report (“PSR”)

demonstrates clearly that Mr. Berman lacks financial resources, income, assets, and potential for

future earnings.

The PSR describes Mr. Berman’s financial condition as “appear[ing] to have negative net

worth. . . with no monthly cash flow . . . [and no] ability to pay a fine in this case, in addition to

restitution.” PSR at 21 (ECF No. 191). Mr. Berman’s assets are dwarfed by his substantial amount

of debt. Mr. Berman’s assets total $2,460, comprised of $1,500 from an inoperable 1973 Opel

4 This should not be construed as Mr. Berman waiving, forfeiting, or conceding that the government met its

burden of proving reliance—specifically, that shareholders relied on Mr. Berman’s press release statements
issued between March 2020 to July 2020. Instead, the reduced loss amount is based upon the government’s
own loss amount calculations, which were miscalculated.

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periodic payments if the court finds from facts on the record that the economic circumstances of

the defendant do not allow the payment of any amount of a restitution order, and do not allow for

the payment of the full amount of a restitution order in the foreseeable future under any reasonable

schedule of payments.”

There is ample support for this Court to find that Mr. Berman’s economic circumstances

are devoid of any ability to pay any amount of restitution. In accordance with the MVRA, Mr.

Berman urges this Court to require only nominal periodic payments in satisfaction of any

restitution order. 5 In United States v. Lewis, 791 F. Supp. 2d 81, 95 (D.D.C. 2011), this Court

found that a defendant did not have the financial ability to pay any amount of restitution other than

nominal periodic payments where the defendant had adjusted gross income for the past three years

of $7,343, $12,002, and $9,835; total debt of $1,870 for unpaid medical and Verizon bills; assets

of some antique coins, miscellaneous knives, and $462 in cash. Mr. Berman’s financial

circumstances are much worse than those in Lewis. The record clearly indicates that Mr. Berman’s

financial situation does not permit the payment of any significant amount of restitution now or in

the foreseeable future.

Given these harsh realities, Mr. Berman also asks this Court that any schedule for nominal

periodic payments should commence after his release from imprisonment, and that Mr. Berman be

given sufficient time after his release to secure basic living needs. Mr. Berman finally asks this

Court to set the nominal periodic payment plan based on an assessment of his ability to pay at that

time he is released from imprisonment.

CONCLUSION

For the reasons provided above, the Court should reduce the Government’s request for

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restitution to the amount of $302,104.19, and due to a very limited financial capacity, make

restitution payable through nominal periodic payments.

DATED: July 8, 2024 Respectfully submitted,

/s/ Kevin B. Collins
Kevin B. Collins (D.C. Bar No. 445305)
Nicholas J. Xenakis (D.C. Bar No. 90001123)
Jose J. Ramos (pro hac vice)
Lori Taubman (D.C. Bar No. 1673026)
Jonah T. Panikar (D.C. Bar No. 90006218)
José F. Girón (D.C. Bar No. 90020611)
Brandon Howell (D.C. Bar No. 1671396)
COVINGTON & BURLING LLP
One CityCenter
850 Tenth Street, NW
Washington, D.C. 20001
(202) 662-5598

Michelle Peterson (D.C. Bar No. 438930)
Assistant Federal Public Defender
For the District of Columbia
625 Indiana Avenue, N.W.
Washington, DC 20004

Counsel for Keith Berman

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CERTIFICATE OF SERVICE

I hereby certify that I caused copies of the foregoing to be transmitted to counsel registered

to receive electronic service.

/s/ Kevin B. Collins
Kevin B. Collins (D.C. Bar No. 445305)

Counsel for Keith Berman

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