Baby Sellers Playing the Blame Game. Everyone is a victim.

"It wasn't me."

"It wasn't my fault."

"I didn't stop them."

"I didn't know what I was getting into."

We have heard all of these quotes from the players involved in the "Baby Selling Case."

Recently, there have been many posts around the web on how to protect yourself and make sure that you are doing a safe and legal surrogacy. They writers make the assumption that the people involved in the Baby Selling Scandal didn't see the red flags. They weren't aware of the laws and they were taking advantage of and are indeed "victims."

None of the adults involved were victims.

Certainly in the present case it cannot seriously be argued that the surrogates lacked the intellectual wherewithal or life experience necessary to make an informed decision to enter into the surrogacy agreement.


In fact, the surrogates all had issues that removed them from the ability to be approved as qualified surrogates in the USA that could be compensated. They were either to old, had health issues, or lived in a State or Country the makes Compensation illegal. 


They were part of the surrogacy community and understood that a woman who enters into a gestational surrogacy arrangement is not exercising her own right to make procreative choices; she is agreeing to provide a necessary and profoundly important service for Intended Parents. That are specified and known before the transfer.


They went around and sold their services to the highest bidder. Accepting the payment of money for the gestation and relinquishment of a child (baby selling) by the economic exploitation of the future adoptive parents. Whomever, they might end up being.


All the time the surrogates knew what they were doing was wrong and publicly lied about their surrogacy journey. They thought they would be protected by the lawyers and get away with their part of the scheme.


The adoptive parents were no better.


They used their pocket book to jump to the head of the line and purchase a baby. They saw the easy way to become parents through the adoption process and took advantage of the situation.


Not a single adoptive parent made a victims statement to the court at the sentencing of Theresa Erickson or Carla Chambers.


In fact, the majority of the parents have refused to talk to the FBI at all.


They have already been rewarded with their parental rights and should be happy they are also not facing jail time for their participation in buying the babies. 


It's impossible to have baby sellers without baby buyers. They were all sailing together on the same boat.


Yesterday in a news interview Theresa Erickson says "I didn't stop them" without explaining who "They" are - and implies that she to is a victim of others bad behavior. She doesn't agree that she should be called the leader and King pin of the conspiracy.

Without her involvement no one else gets to play the baby selling game. She is the only one that could file the documents in the California courts and get the PBO's approved. Without her leading the group no one else gets to play.

That is why she got the longest sentence of everyone involved and will be paying the most restitution.

The courts are asking restitution from all three women:
Carla Chambers $189,773
Hilary Neiman $189,773
Theresa Erickson $801,414

No one that was involved with this scheme missed the red flags and got hoodwinked. Everyone had their own selfish reason to look past the red flags and happily jumping on board to become co-conspirator.

None of the adults involved are innocent.

None of the adults involved are victims.


In the end we are left with this all telling quote from Theresa Erickson:
"Remember, any story can be spun and manipulated......"


This is what all of the adults are doing.

They are pointing the finger at the other person and saying "it wasn't me!"
"It really, it wasn't me!"
"It was them! They are the bad one's!"

"I am the victim."

"Now give me $38,000 for my involvement in the crime! I earned it!"

When you look at the facts, it should be clear that all of the co-conspirators should have been treated equally. Surrogates, Parents, Lawyers, and Facilitators are all equally parts to the puzzle.

At the sentencing, The Honorable Anthony J. Battaglia said "When you're in for a penny, you're in for a pound." He needs to apply his own words to this case and not award the Surrogates or Intended parents any restitution.






Prominent Surrogacy Attorney Sentenced to Prison for Her Role in Baby-Selling Case


Prominent Surrogacy Attorney Sentenced to Prison for Her Role in Baby-Selling Case 

U.S. Attorney’s OfficeFebruary 24, 2012
  • Southern District of California(619) 557-5610
United States Attorney Laura E. Duffy announced today that attorney Theresa Erickson was sentenced by United States District Judge Anthony J. Battaglia to serve five months in prison and nine months of home confinement for her involvement in a baby-selling ring that deceived prospective parents and the Superior Court of California.
As noted during the hearing, California law forbids the sale of parental rights to babies and children. The law does, however, permit surrogacy arrangements, but only if the Gestational Carrier (“GCs”) and the Intended Parents (“IPs”) enter into an agreement prior to an embryonic transfer. If the GC and IPs do not reach an agreement before the GC receives the embryonic transfer, the GC can only transfer parental rights in the unborn child through a formal adoption procedure. California law permits participants to profit from surrogacies, but not adoptions.
In her August 2011 guilty plea, Erickson (an internationally-renowned California attorney specializing in reproductive law) admitted that she and her conspirators used numerous GCs to create an inventory of unborn babies that they would sell for over $100,000 each. They accomplished this by sending women to become implanted with embryos in overseas clinics. If the women (now GCs) sustained their pregnancies into the second trimester, the conspirators offered the babies to prospective parents by falsely representing that the unborn babies were the result of legitimate surrogacy arrangements in which the original IPs had backed out. The conspirators also drafted fraudulent “assumption agreements” for the prospective parents to sign, which reinforced the lie that original IPs existed but had simply backed out.
According to court records, Erickson admitted to lying to the California Superior Court by fraudulently representing in court documents that these post-pregnancy agreements between the GC and IPs were legitimate surrogacies, which allowed Erickson and her co-conspirators to make over $400,000 in profit from the sale of parental rights. Specifically, Erickson admitted that she prepared and filed with the Superior Court of California, County of San Diego, declarations and pleadings that falsely represented that the unborn babies were the products of legitimate surrogacy arrangements—that is, ones that involved agreements between the IPs and the GCs prior to embryonic transfer. With these fraudulently obtained pre-birth orders, the IPs’ names would be placed on the babies’ birth certificates through a surrogacy and the conspirators would be able to profit from their sale of parental rights.
According to court records, Erickson and her co-conspirators risked the health of at least one GC in order to profit from a fraudulent surrogacy, instead of a legitimate adoption. For example, in 2010, a GC, who was living in a Midwestern state that did not allow surrogacies, received orders from her doctor to be on bed rest due to premature labor contractions. In response, Erickson told the GC, “I really think that you need to get out to California as soon as possible in order to avert an adoption.”
In her guilty plea, Erickson also admitted that she caused applications containing materially false representations to be submitted to the State of California’s Access for Infants and Mothers program to defraud the agency out of the medical expenses from the birth of the babies.
United States Attorney Duffy stated, “The surrogacy laws were enacted to protect both unborn babies and parents seeking children. Erickson abused her position as a trusted legal advisor and officer of the court by circumventing the law and undermining the rights of children and intended parents. Out of sheer greed Erickson preyed upon people’s most basic need: to raise a child. We cannot and will not allow individuals like Erickson to profit by taking advantage of vulnerable people who have a sincere desire to lawfully adopt and parent children.” United States Attorney Duffy also praised the efforts of special agents of the Federal Bureau of Investigation for their dedication on a unique and complicated investigation.
FBI Special Agent in Charge Keith Slotter commented, “Though the FBI investigates many different types of fraud, it is particularly disturbing when victims have been taken advantage of because of their desire to create a family. In this case, the victims were exploited at a time in their lives when they were in a most vulnerable situation and trusting in legal counsel to abide by the laws of this country to provide them with legitimate services.”
At sentencing, Judge Battaglia ordered Erickson to pay a $70,000 fine and serve three years of supervised release.
Today, Judge Battaglia also sentenced co-conspirator Carla Chambers to serve five months in custody, and seven months of home confinement and $180,020.20 in forfeiture, and three years of supervised release (Case Number: 11CR3368-AJB).
On December 1, 2011, Judge Battaglia sentenced Hilary Neiman, a Maryland attorney specializing in reproductive law and the third member of the conspiracy, to serve 12 months’ custody (five months in prison and seven months of home confinement), pay a $20,000 fine, $133,000 in forfeiture, and three years of supervised release.
(Case Number: 11CR3247-AJB).
The Court will set a future date for the restitution hearing for all three defendants.
DEFENDANTS
Theresa Erickson (11CR3372-AJB)
Age: 43
Poway, California
Carla Chambers (11CR3247-AJB)
Age: 51
Las Vegas, Nevada
Hilary Neiman (11CR3368-AJB)
Age: 32
Chevy Chase, Maryland
SUMMARY OF CHARGES
Theresa Erickson and Hilary Neiman
Title 18, United States Code, Section 371-Conspiracy to Commit Wire Fraud
Carla Chambers
Title 18, United States Code, Section 371-Conspiracy to Engage in Monetary Transactions in Property Derived from Specified Unlawful Activity
INVESTIGATING AGENCY
Federal Bureau of Investigation

Baby Selling Terms of Agreement

Since Restitution is the next thing being considered, I thought that it would be time to look at the Baby Selling Terms of Agreement between Carla Chambers, Theresa Erickson, and Hilary Neiman with the Surrogates Kimberly Schooley, Melissa Todd, and Heather Albaugh.

It states that compensation begins "at the first of the month after the GS turns 12 weeks gestation AND contracts are signed." And the "facilitator" will be paying the travel and medical expenses for the transfer. 

This is the Terms of Agreement for the Surrogates that went to Lviv, Ukraine for transfer.

The surrogates that were recruited to be surrogates for Conceptual Options and stayed in California for transfer had different contracts.

Terms of Agreement: 


Compensation once pregnancy confirmed
$38,000 Compensation and expenses*
$ 150 Per night living expenses after the first 28 nights
$ 400 Amniocentesis per sac, if IPs request 
Legal fees (lawyer will be appointed)


Expenses Prior to pregnancy

All travel and accommodation for transfer, while in Lviv, Ukraine are paid by the facilitator. GS is responsible for travel to and from her own local airport.

All Medical, for the IVF transfer, is also paid by the facilitator, including any medications needed for the transfer, and post transfer. Except Birth control pills, and prenatal vitamins.


Miscarriage:

$400.00 per week of pregnancy if a complete miscarriage occurs anytime after the end of the first trimester and before the 24Th week of pregnancy, and a viable pregnancy has been confirmed by ultrasound.

Payable once original medical certificate presented, to lawyer

IPs have the right to request ultrasound to show that a complete miscarriage has occurred, before funds are released.

Please note that this will only be paid out once GS is matched and contracts signed and a trust fund is in place.


Premature birth:

In the event of the baby/s are born prematurely (before 36 weeks), if any baby/s live past 2 weeks past delivery, then surrogate is paid in full, $38,000. She will be paid the balance owing from the trust fund, within 10 working days, of the baby/s surviving more than two weeks.

If the baby/s are born between 24-36 weeks gestation, and die within the two week time frame, the GS is paid $400.00 pw gestation. The date of gestation, of the pregnancy loss, will be calculated, from the time it is discovered the demise of the baby/s.

Please note that this will only be paid out once GS is matched and contracts signed and a trust fund is in place.

Travelling to California or other surrogacy friendly State requested by IPs

If the he GS must travel to California, for the birth, she must travel a minimum two weeks prior to her due date or scheduled Caesarean section, at the very latest.

The GS may request $2,000 from the trust fund, one month prior to birth, for travel expenses.

In the event of twins the GS must travel to CA by the 34Th week of the pregnancy.

In the event of triplets the GS must travel to CA by the 28Th week of pregnancy.

If the GS is medically directed to travel earlier, than the above scheduled time frame, she must travel ASAP, and she will still be paid extra living expenses, after the first 28 nights she is in California, in the amount of $150 per night. 

If the IPs request the GS to travel early, she will still be paid extra living expenses, but can refuse to travel if there no medical evidence to say she is required to travel early. 

However extra living expenses will not commence until GS has physical been in California for 28 nights.

The living expenses will start the day that the GS arrives into California. She will need to provide proof to the lawyer, when she arrives into California, either by Ticket stub (plane, bus, or train) or hotel/apartment receipt (in GS name) or physically appearing into the lawyer’s office in person.

Upon arriving into California, then she will be given $3,000 from the trust fund, to cover living expenses, for the first 28 nights.

It is up to the GS to make her own arrangements for accommodation, and rental car, and GS must do her own grocery shopping. 

In the event the GS brings her own children to CA, for the delivery, it is the responsibility of the GS’s support person to watch the children, while the GS is in labour, and at the hospital.

The GS may also drive to California, and still receive the $2,000 travel expenses, from the trust fund. But she must not drive herself, she must have a adult companion, with a full drivers license.

The GS will be given 1 hour unsupervised visit with the baby/s, with her family, as long as the baby is healthy enough to visit. Otherwise the GS may visit the baby anytime she likes in the prenatal nursery.

The GS can receive $150 per night living expenses, for up to 1 week post partum, Starting from the 29th day she is in California.


Amniocentesis

If a amniocentesis is medically directed, then all expenses for this, are covered by the lump sum. However in the event that this procedure is not medically directed, and requested by the IPs. Then the GS may claim a invasive procedure fee of $400 per sac. 

In the event the amniocentesis is not medically directed, and the GS miscarries all babies she is carrying within 2 weeks of this procedure, she will be entitled to a miscarriage fee of $600 per week gestation, payable to the day the miscarriage or demise of baby/s is detected.

If the amniocentesis, is medically directed, then GS is required to travel for the amniocentesis, then she is responsible for these costs, and can claim a $200 for travel expenses, from her lump sum from the next trust fund payment. If the Amniocentesis is requested by the IPs, then travel expenses are covered within her invasive procedure fee.


Death of surrogate:

If Surrogate dies before she delivers the baby/s, her estate is compensation for the balance of expenses owed with the life insurance that is included in the lump sum.

Any funds already paid prior to the death are not required to be reimbursed. But no more payments will be made from the trust, from the date of the GS’s death.

However, if the GS doctor is able to deliver the babies safely, and one or more survive more than 28 days, the estate of the GS is paid the balance owing on the surrogacy.



Payment of compensation:

At the first of the month after the GS turns 12 weeks gestation, and contracts are signed, then the GS may start to request $1,500 per calendar month from the trust fund, and if she is carrying multiples she may request $2,500. These expenses, will be backdated to 12 weeks, gestation, once she is matched.

The balance of the compensation will be paid out, in full, after a full term birth (36+ weeks), within 5 working days of delivery, in a lump sum.

It is the responsibility of the GS to pay all medical costs for the delivery, not covered by her insurance. Therefore she must inform the hospital of her home address, to send all bills to, for the delivery.

If the GS delivers earlier than 36 weeks, and wishes to travel home, before the two week waiting period is over, she may request $5,000 out of the trust fund, for travel expenses home.



Monthly expenses

All expenses to be claimed will be itemised and sent to the lawyer by the 15Th of month, for payment at the beginning of the next month.



Medical Insurance

The GS must have insurance to cover the pregnancy, or be responsible for the medical payments herself. Medical Insurance can be provided in California.

Life Insurance

It is the responsibility of the GS to provide life insurance on her life, in case of her death, during the pregnancy, childbirth, and 12 weeks post partum. It is recommended that the GS purchase a policy of $250,000, and payment for this is included in the lump sum.

Failure to do so, if not the responsibility of the IPs, in the event of a mishap.



Lump sum includes:
Compensation
All multiple babies
Life insurance
Passport
Transfer of embryos fee
Maternity clothing
All medical insurance, tests, & co-pays 
Prescriptions
Ultrasounds
Gas
Extra food
Bed rest (if required)
Lost wages
Childcare
Personal needs for delivery
Any courier fees (for contracts etc)
Caesarean section (if required)
Hysterectomy (if required)
Amniocentesis (if medically directed)
Insurance policy for delivery in California (if required)
Co-pays for delivery for GS only (not baby)
Travel, accommodation, rental car, gas, parking, etc
To/in California, for 28 days/nights.


This was the basis of the agreement.


Attorney who pleaded guilty in adoptive-infants case faces sentencing


Reporting from San Diego -- Poway attorney Theresa Erickson was a star in the complex, competitive, and sometimes lucrative business of helping childless couples adopt babies.

She was a frequent guest on national TV shows; she self-published a book on "assisted reproduction," and she presented herself on her website as a tireless, fearless advocate for adoption. Eager to expand her business, she was looking to attract gay clients.

A different Erickson will appear for sentencing Friday in San Diego federal court: an admitted felon, the alleged ringleader behind an international scheme to pay surrogates to carry embryos to term so the babies could be placed with couples throughout the United States.

The scheme violated laws requiring a prior agreement between a surrogate and what the law calls "intended parents" before implantation, according to prosecutors. The rules are meant to prevent the creation of an inventory of babies to be "shopped."

In August, Erickson, 45, pleaded guilty to wire fraud, knowing she could be sentenced to five years in prison. Two co-defendants also pleaded guilty.

As part of her plea bargain, Erickson signed court documents saying the surrogates were paid $38,000 to $45,000, and the couples were sometimes charged more than $100,000. In the same documents, Erickson admits that she filed phony birth certificates and health insurance forms. Prosecutors accuse her of building "an efficient business model that kept costs to a minimum."

It seemed as if the case had been concluded without undue rancor: In exchange for a guilty plea, prosecutors would recommend home detention instead of prison, although that decision is left to the judge.

But as sentencing has approached, Erickson's attorney has launched an attack on the U.S. attorney, the federal probation office, and the local media, starting with the prosecutors' characterization of the case as "baby-selling" rather than wire fraud.

The result of the prosecutor's actions, attorney Ezekiel Cortez said in a document filed with the federal court, has been to produce a "mob mentality" that could lead U.S. District Judge Anthony Battaglia to sentence his client more harshly than was imagined when Erickson signed her plea agreement.

Based on interviews with prosecutors, the local media produced "an onslaught of negative and misinformed media coverage" that puts Erickson at "an unfair disadvantage" at sentencing, according to the same document.

Cortez declined to comment, which an aide said is consistent with his policy of never talking to reporters. The federal prosecutors also declined.

But in pre-sentencing documents, prosecutors said Erickson has shown no remorse, tried to shift blame to her co-defendants, and continued to insist that she was only trying to help desperate couples start families.

Within hours of signing a plea agreement on Aug. 9, Erickson posted a "defiant statement on Facebook that contradicted her guilty plea made under oath," prosecutors said.

"I have never taken advantage of parents, children, donors or surrogates who otherwise would remain vulnerable to the underbelly of this industry," the statement read. "I live my life by doing the right things for the right reasons and sometimes you just have to do what is right."

Prosecutors have not sought to nullify any of the adoptions nor to charge surrogates with knowingly participating in the scheme.

Erickson's attorney wrote that the surrogates "who mysteriously escaped prosecution … also profited from their integral, key role in this conspiracy."

At the same court session Friday, one of Erickson's co-defendants, Carla Chambers, 52, of Las Vegas, is also set to be sentenced.

Chambers, who was convicted of a similar surrogacy scheme in New Zealand, has admitted that she sought out young women willing to go to Ukraine to have an embryo implanted and then return to California to give birth. She pleaded guilty to receiving money from an illegal act.

Prosecutors say Chambers and Erickson began their business arrangement in 2005. Court documents mention a dozen adoptive couples nationwide. Many were told by Erickson that another couple had agreed to adopt the child but had backed out, making the child available to them.

In 2008, a second attorney was recruited by Erickson to find clients. Maryland resident Hilary Neiman, 32, also pleaded guilty to wire fraud and in December was sentenced to five months in prison and seven months of home confinement.

Neiman surrendered her law license after the Maryland bar opened an investigation that could have led to her license being revoked, according to her attorney.

Documents show that the same could happen in California to Erickson, who once gave courses in creating a "niche" legal practice and advertised herself as an expert in "an area of law where it matters most."

Is the Baby Selling Case Going to Set New US Federal Surrogacy Case Law?

I believe things just got very interesting in the Baby Selling Case.

Here are links to the background information:

We have a list of the Government's Restitution Memorandum. It is a lot of information so it will be posted in a series of posts.

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 1
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 3
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 4
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 5
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 6
Is the Baby Selling Case Going to Set New Federal Surrogacy Case Law?

There is the direct possibility that the Baby Selling Scandal's court decision will become Federal Case Law regarding Surrogacy contracts and specify that a Surrogate is allowed compensation.

Currently, this is a State by State decision, but the US Attorney has now asked this Federal Judge to confirm that Surrogates are allowed compensation.

The Compensation would not be limited to just expenses, but would be an eye popping $38,000 if Heather Albaugh and Melissa Todd are awarded the restitution they are asking from the court.

As part of the GOVERNMENT’S RESTITUTION MEMORANDUM  LAURA E. DUFFY,

United States Attorney and MICHAEL MERRIMAN, Assistant U.S. Attorney have made the claim that the restitution is due them based on the fact that they would have been paid for their services pursuant to a legitimate surrogacy agreement.

They go on to outline other compensation due Surrogates that include, legal fees, lost wages for the Surrogate and their fiance, funeral expenses for children lost during a Surrogacy, and travel expenses.

I must say that it would be a very strange twist if the "Illegal Surrogacy Contract" that places Theresa Erickson, Carla Chambers, and Hilary Neiman in jail ends up setting National precedence for legal Surrogacy contracts.


The Honorable Anthony J. Battagliahas has to rule that Surrogacy Contracts are enforceable by Federal Courts - even when the contracts themselves are illegal - to award restitution.

Could this be the legal precedent needed for Commercial Surrogacy to be legal in all 50 States?

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON RESTITUTION Part 6


We have a list of the Government's Restitution Memorandum. It is a lot of information so it will be posted in a series of posts.

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 1
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 3
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 4
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 5
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 6
Is the Baby Selling Case Going to Set New Federal Surrogacy Case Law?

III.
CONCLUSION
The United States requests that the Court order restitution, with Erickson, Chambers, and
Neiman jointly and severally liable, to the following victims:

Victim Restitution Amount

M.T. $35,200 (surrogacy fee)
$13,926 (legal bills)
$1,067.40 (costs attending sentencing hearings)

H.A. $38,000 (surrogacy fee)
TBD (costs attending sentencing hearing)

L.S. $175 (travel expenses to Ukraine)

K.S. $1,866.03 (funeral expenses for child lost during surrogacy)
$1,720 (lost wages while recovering from injury)

A.S. None

AIM Program $25,148.78

IPs (provided in
detail in Exhibit A)
$449,900.66

Sharp Healthcare $3,219.20

The United States also requests that the Court order Erickson to pay Sharp Healthcare restitution
in the amount of $611,641.71.

At the hearing, the United States will have Special Agent Godshall and Sharp employees
available to testify, if necessary.

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON RESTITUTION Part 5


We have a list of the Government's Restitution Memorandum. It is a lot of information so it will be posted in a series of posts.

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 1
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 3
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 4
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 5
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 6
Is the Baby Selling Case Going to Set New Federal Surrogacy Case Law?

E. Sharp Healthcare

1. Sharp’s Restitution Request
On November 22, 2011, Sharp Healthcare submitted a Request for Victim Restitution against
Erickson. See 11CR3372-AJB, Docket 26 (“Sharp’s Request”). Sharp’s Request asks that the Court
order $614,860.91 in restitution from Erickson. Sharp identifies seven infants born at their hospitals
that it claims relate to Erickson’s scheme to scheme to fraudulently obtain medical care at reduced rates for GCs. See Sharp’s Request, Exhibit A; Victim Statements filed in 11CR3368-AJB and 11CR3372-AJB (“Sharp’s Victim Statement”), Attachment E.

The United States anticipates that Sharp will provide testimony in support of their Request at
the restitution hearing as follows: The seven IPs are all citizens of countries other than the United States, which makes any debt they incurred unrecoverable. The IPs told Sharp employees that Erickson promised them they would not have to pay any significant medical costs beyond the fees detailed in the surrogacy contract. When the babies for the foreign IPs required extensive medical care following their births, Sharp was stuck with the bill when the IPs returned home.

2. Liability For All Defendants
Two of the seven babies identified in Sharp’s Request (Baby S.-M. and Baby La.) were born at
Sharp hospitals pursuant to fraudulent surrogacy agreements identified in the FBI’s investigation.
Compare Godshall Decl., Exhibit A with Sharp’s Victim Statement. Sharp’s Request documents
$3,219.20 in unpaid medical bills for these two births. The United States can confirm that the IPs for
these two births were not United States citizens and returned to their home countries after the births.

As discussed in Section II(C) above, Defendants’ scheme involved maximizing profits by
providing false information on AIM applications in order to improperly obtain health care at a reduced rate. As discussed in Section II(D) above, Defendants scheme also depended upon lying to prospective IPs in order to get them to signed agreements that they would not have agreed to if they knew the fraudulent nature of the surrogacies. At a minimum, the medical costs from the two babies identified in this section relate to Defendants’ scheme to fraudulently transfer parental rights at maximum profit.

Therefore, the United States requests that the Court order restitution in the amount of $3,219.20 for
Sharp, with Defendants jointly and severally liable.

3. Erickson’s Scheme To Minimize Health Care Costs
The United States believes that the Court should also order Erickson (but not Neiman or
Chambers) to pay restitution to Sharp for the losses associated with the medical costs for the remaining five babies identified in Sharp’s Request ($611,641.71). In order “to define the outer bounds of a particular fraudulent scheme,” courts generally focus “on the actions alleged in the indictment and their temporal scope.” See United States v. Cothran, 302 F.3d 279, 289 (5th Cir. 2002). The MVRA encompasses “all direct harm from the criminal conduct of the defendant which was within any scheme, conspiracy, or pattern of activity that was an element of any offense of conviction.” See United States v. Hensley, 91 F.3d 274, 277 (1st Cir. 1996)(discussing VWPA).

Courts have held that "when the crime of conviction includes a scheme, conspiracy, or pattern of criminal activity as an element of the offense," the court may order restitution for "acts of related conduct for which the defendant was not convicted." United States v. Lawrence, 189 F.3d 838, 846 (9th Cir. 1999). The Lawrence court ordered the defendant, convicted of mail and bankruptcy fraud, to pay the full amount of restitution ordered by the district court, even though only a fraction of the amount "[was] directly attributable to the acts for which the jury found [him] guilty." Id. at 847.
Courts have “approved restitution awards that included losses at least one step removed from
the offense conduct itself.” See United States v. Gamma Tech Industries, Inc., 265 F.3d 917, 928 (9th
Cir. 2001) (upholding restitution for lost profits due to Defendants’ overpayments by victim company in kickback scheme).

However, restitution must be “based upon losses directly resulting from the defendant’s criminal conduct.” See United States v. Fallon, 470 F.3d 542, 548 (3rd Cir. 2005)(internal citations omitted).


Erickson, in her plea agreement, admitted that she falsified AIM applications in order to
fraudulently obtain medical insurance for GCs and maximize profits. See Erickson Plea Agreement,
pg. 5. In the Information, Erickson was charged with making such false statements in 2008-2009. See
11CR3372-AJB Information, Overt Acts C and F.

The evidence presented in support of sentencing and restitution demonstrates that Erickson’s scheme was designed to maximize the number of surrogacies as well as the profit from each surrogacy. By acquiring medical care for the GCs and infants at fraudulently-reduced prices (through improper AIM coverage and IVF treatments in the Ukraine, for example), Erickson was able to meet both of those needs. More IPs were able to pay the reduced fees (since IPs from foreign countries were told that they did not have to pay extensive medical bills for their children following birth) and each surrogacy generated more profit (since Erickson did not pay all medical costs incurred from the surrogacy with the fees paid to her office).

The evidence will show that Erickson’s scheme relied upon her extensive knowledge of the
health care system and that she directed the IPs’ and GCs’ actions in a manner that maximized profit.
Erickson submitted fraudulent AIM applications. Erickson told foreign IPs that they would not have
to pay medical expenses for their child’s care, beyond the surrogacy fee. Erickson directed the GCs
and IPs to Sharp’s facilities knowing this fact, and Erickson must have known that Sharp would sustain losses as a result.

11/ Erickson, therefore, directly and proximately caused Sharp to provide medical care
worth over $600,000 for children to IPs who would never have to pay. Although this loss stems from
IPs who had no dealings with Neiman or Chambers, the IPs in Sharp’s Request were part of Erickson’s related conduct that involved lying to IPs in order to generate business and fraudulently reduce medical care costs. Whether the victim was the AIM program, Sharp, or IPs, Erickson used her expertise in the surrogacy field for her personal benefit, regardless of the costs incurred by others.

_____________________________________________________________

The United States has no evidence that Neiman or Chambers were involved in the 5 IPs
discussed in this section.


Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON RESTITUTION Part 4


We have a list of the Government's Restitution Memorandum. It is a lot of information so it will be posted in a series of posts.

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 1
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 3
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 4
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 5
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 6
Is the Baby Selling Case Going to Set New Federal Surrogacy Case Law?

3. A.S.
In 2009, A.S. agreed to serve as a GC for Defendants. In 2010, A.S. gave birth to a child for one
of the victim IPs identified in this case. The United States believes that Defendants paid A.S. for her


services as a GC. A.S. has submitted various requests for restitution, including medical expenses and
lost wages. See Exhibit 7.

The United States does not recommend restitution for A.S., as she was compensated by
Defendants for her services as a GC and the United States has no information that A.S. sustained any
physical injuries as a result of Defendants’ criminal activity.

C. California Access for Infants & Mothers Program
As discussed in the United States’ sentencing memoranda, Defendants submitted fraudulent
applications to the California Access for Infants & Mothers (AIM) program on behalf of GCs.
Defendants did so in order to obtain healthcare for the GCs at a reduced cost and maximize profits from the scheme. In their plea agreements, Erickson and Neiman admitted that the fraud against the AIM program, which resulted in losses exceeding $20,000, was in furtherance of their surrogacy scheme.

Documents also show that Chambers was involved in the AIM fraud. See United States Supplemental Sentencing Memorandum (filed February 10, 2012), Exhibits 12C-12F.

After learning of Defendants’ fraud, the AIM program submitted a restitution request for
$25,148.78. See Exhibit 8. AIM also submitted spreadsheets in support of the $25,148.78 in claimed
losses from AIM coverage extended to T.T., M.K., and A.K. for their pregnancies. See Exhibit 9.

The FBI has confirmed that T.T., M.K., and A.K. did serve as GCs in furtherance of Defendants’ surrogacy scheme and gave birth to children who were provided to victim IPs. See Godshall Decl., ¶

7. Due to Defendants’ admissions, AIM’s request for restitution, and AIM’s supporting
documentation, the United States recommends that the Court order restitution in the amount of
$25,148.78 for the AIM program, payable by Neiman, Erickson, and Chambers.

D. Intended Parents
During the course of the conspiracy, Defendants received hundreds of thousands of dollars from
IPs was based on the IPs’ expectation that they would receive a child and obtain valid parental rights
for that child. See Godshall Decl., ¶ 8 and Exhibit A.6/ Defendants admitted in their plea agreements
that they “deceived the prospective parents by representing to them that the unborn babies were the

result of legitimate surrogacy agreements, but the original IPs backed out of the arrangement.” See, e.g., Erickson Plea Agreement, pg. 4. Defendants also admitted to misrepresenting the identities of the sperm and egg donors. See e.g., Erickson Plea Agreement, pg. 4. Defendants acknowledged that the pre-birth orders obtained for the benefit of the IPs were fraudulent. See e.g., Erickson Plea Agreement, pg. 4.

The IPs’ victim statements document the trust the IPs placed in Defendants, who were experts
in the surrogacy field, when dealing with an emotionally-charged situation. See Exhibits 10 and 11.
The victim statements document the IPs’ concern upon learning that the donor information and birth
orders were invalid. Id. The FBI’s interviews with other IPs confirmed those concerns, as well as some IPs surprise that the IVF treatments occurred in the Ukraine. See Exhibit 12, pg. 4; Exhibit 13, pg. 2-3.

Multiple IPs stated that they would not have paid Defendants any money had they known that the
scheme depended upon false representations in the court filings. Id.

By Defendants’ own admissions, they lied to IPs in order to receive large amounts of money.
Specifically, Defendants made promises regarding donor identity and the legality of the surrogacy
agreements to get the IPs to pay them. Only now, at the conclusion of the FBI’s investigation, have the IPs learned that the Pre-Birth Orders (PBOs)–the court orders that give the IPs parental rights–were obtained by fraud. The IPs now face a future where their parental rights are in limbo and they may never be able to obtain genetic information regarding the donors.7/

As discussed above, the IPs would not have paid Defendants tens (or hundreds) of thousands of
dollars had they known that the PBOs and the provided donor information were fraudulent. In short,
the IPs were swindled by the Defendants. Therefore, the IPs qualify as victims under the broad

definition in the MVRA, as they were “directly and proximately” harmed by Defendants’ fraudulent
scheme.

Having determined that the IPs qualify as victims, the next issue is the amount of restitution
provided by the MVRA. “The primary and over-arching goal of [the MVRA] is to make victims whole, to fully compensate these victims for their losses and to restore these victims to their original state of well-being . . . The purpose of restitution is to restore the defrauded party to the position he would have had absent the fraud.” Gordon, 393 F.3d at 1053 (internal citations omitted)(emphasis in original).

Here, Defendants defrauded the IPs by selling them something (e.g., parental rights and donor
information) that was not what Defendants promised. If Defendants had induced the victims to invest in a Ponzi scheme or lied about the details of a real estate investment, there would be no dispute that the Court should order restitution for the difference in value between what was promised to the IPs and what they received. In this case, Defendants should not avoid paying restitution due to their willingness to profit from lies regarding unborn children and parental rights.
An order of restitution to the IPs for all of the funds provided to Defendants is justified under
the MVRA, as the fundamental premise of Defendants’ sale of the unborn children was fraudulent.

The United States, however, acknowledges that the IPs do currently have custody of the children they received pursuant to the fraudulent surrogacy agreements. And the United States recognizes that the Superior Court of California, County of San Diego has not (as yet) initiated any legal proceedings
regarding the fraudulent PBOs.8/

In acknowledgment of these competing factors, the United States requests that the Court order
restitution to the IPs in the amount of half of the IP funds paid to Defendants pursuant to the fraudulent surrogacy agreements.

9/ With respect to the four IPs for whom the FBI has been unable to locate bank records due to the age of the transactions (IP#1-IP#4), the United States requests that the Court order Erickson to pay them each $10,000, pursuant to her plea agreement

___________________


The victim IPs identified as IP#1-IP#4 in Exhibit A to Special Agent Godshall’s
declaration have not responded to the FBI and U.S. Attorney’s Office’s attempts to contact them. IP#1-IP#3 were identified in a review of under seal court filings in the Superior Court of California, County of San Diego. IP#4 was identified in Chambers’ emails with Erickson (IP#3 was also discussed in Chambers’ emails).

While the Pre-Birth Order for IP#1 contains a declaration that appears to be from a California fertility doctor who performed the IVF procedure, the FBI believes that this surrogacy was Chambers’ first fraudulent surrogacy, due to Chambers and Erickson’s partnership. Erickson submitted court filings on behalf of all IPs identified in Exhibit A.

7/ The United States has not received any claimed expenses from IPs regarding legal fees
required to rectify the fraudulent PBOs or investigative fees to learn about the donors’ genetic
information. However, it is possible that such fees will arise in the future, as the IPs determine what
steps they must take after learning of Defendants’ fraudulent scheme.


8/ The United States has no information that the Superior Court will initiate any such
proceeding regarding the fraudulent PBOs.

9/ The United States will provide bank records to defense counsel in support of Exhibit A to Special Agent Godshall’s Declaration.








Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON RESTITUTION Part 3


We have a list of the Government's Restitution Memorandum. It is a lot of information so it will be posted in a series of posts.

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 1
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 3
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 4
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 5
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 6
Is the Baby Selling Case Going to Set New Federal Surrogacy Case Law?

2. K.S. and L.S.
K.S. and L.S. also agreed to act as GCs for Defendants in 2010. See Godshall Decl., ¶ 4-5. They
traveled to the Ukraine in order to undergo IVF procedures. Id. L.S. did not become pregnant from the IVF procedure in the Ukraine. L.S. now requests restitution for 1) the surrogacy fee she did not receive, 2) pain and suffering from needles used for injections during the IVF process, 3) her husband’s lost wages, and 4) expenses incurred in traveling to the Ukraine. See Exhibit 6.
K.S. became pregnant from the IVF procedure, however, she lost the pregnancy when she
suffered from significant complications that required significant medical care in order to save her life. See Exhibit 5. K.S. sustained significant injuries from the pregnancy and gave birth to a stillborn baby as a result. Id. K.S. paid $1,866.03 in funeral expenses for the baby. Id. K.S. also requests restitution for lost wages for herself and her fiancé as a result of her unsuccessful surrogacy. Id.

The United States believes that K.S. and L.S. are both victims of the Defendants’ fraudulent
scheme. Both women agreed to serve as GCs at Defendants’ request. Due to Defendants’ criminal
conduct, K.S. and L.S. did not have surrogacy agreements with Intended Parents (IPs) at the time they traveled to the Ukraine. Because they did not have a valid surrogacy agreement with an IP, K.S. and L.S. did not have any financial assistance or contractual recourse when they traveled to the Ukraine or when K.S. suffered from significant pregnancy complications. Under a legitimate surrogacy agreement reached prior to the embryo transfer, K.S. and L.S. could have negotiated to receive help from the IPs with matters such as travel expenses or funeral expenses for the child.
Despite their status as victims, the United States does not recommend that K.S. or L.S. receive
restitution for surrogacy fees, as neither woman carried a child to term, which was the basis for payment under the agreement. Nor does the United States recommend restitution for L.S.’s pain and suffering.

See United States v. Satterfield, 743 F.2d 827, 837 n. 7 (11th Cir. 1984). L.S. is also not entitled to
restitution for lost wages under the MVRA, given that she did not suffer any bodily injury. See United States v. Quillen, 335 F.3d 219 (3d Cir. 2003).

The United States does recommend restitution for L.S.’s travel expenses to the Ukraine, which
total $175.00. L.S. traveled to the Ukraine at the direction of Defendants, in order to reduce expenses
and maximize profit for Defendants. L.S. would not have incurred those expenses but for Defendants’ instruction to conduct the IVF transfer in the Ukraine. Furthermore, with a valid surrogacy agreement in place, L.S. could have received assistance with travel expenses from the IP.
With respect to K.S., the United States recommends restitution for funeral expenses and lost
wages. 18 U.S.C. § 3663A(b)(3) provides for restitution for funeral expenses if the criminal offense
results in the death of the victim. However, this Court can award restitution to K.S. for the funeral
expenses without determining whether the child is a victim under MVRA. As with the travel expenses, K.S. would have likely received assistance from an IP for this expense under a valid surrogacy agreement signed prior to the embryo transfer. Therefore, Defendants’ criminal conduct, which involved sending GCs to the Ukraine to get pregnant without a surrogacy agreement, was a “direct and proximate cause” of K.S. bearing the funeral expenses totaling $1,866.03 for the child she carried at Defendants’ direction.

K.S. sustained significant physical injuries from her lost pregnancy, which occurred because of
her agreement with Defendants to be a GC. See Exhibit 5. If the criminal offense “results in bodily
injury” to the victim, the victim is entitled to reimbursement from Defendants for lost income.
18 U.S.C. § 3663A(b)(2)(C). K.S., therefore, should receive restitution in the amount of $1,720.00,
which consist of lost wages sustained by K.S. and her fiancé while she was battling pregnancy
complications and recovering from her injuries.

Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2

We have a list of the Government's Restitution Memorandum. It is a lot of information so it will be posted in a series of posts.


Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 1
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 3
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 4
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 5
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 6
Is the Baby Selling Case Going to Set New Federal Surrogacy Case Law?

B. Gestational Carriers
1. M.T. and H.A.
In 2010, M.T. and H.A. both agreed to be Gestational Carriers (GCs) for Defendants. See
Godshall Declaration In Support of United States’ Restitution Memorandum (“Godshall Decl.”), ¶

2-3.
In agreeing to serve as GCs, Chambers promised to pay M.T. ($35,200)2/ and H.A. ($38,000) if they
carried a child to term and gave birth. See Exhibits 1 and 2.3/ Chambers sent M.T. and H.A. to the
Ukraine to undergo IVF procedures, which were successful.

After becoming pregnant, M.T. and H.A. developed concerns with the legitimacy of their
agreements with Defendants, as discussed in their victim statements. See Godshall Decl., ¶

2-3. In response, M.T. and H.A. sought counsel from others. Specifically, M.T. sought the advice of Kim Surratt, an attorney who was not connected to Erickson, Neiman, or Chambers, which resulted in legal bills totalling $13,926.4/ See Exhibit 3. Once seeking counsel from people who were not leading a fraudulent surrogacy operation, M.T. and H.A. withdrew from their agreements with Defendants. As a result, M.T. and H.A. arranged for the babies to be adopted. See Godshall Decl., ¶

2-3. Therefore, M.T. and H.A. did not receive the surrogacy fees that were promised when they began their service as GCs.

In exercising her rights as a victim, M.T. attended the Neiman sentencing on December 1, 2011.
M.T. also plans on attending the Erickson/Chambers sentencing on February 24, 2012. M.T.’s total
cost from attending the two sentencings is $1,067.40.5/ See Exhibit 4. H.A. will attend the February
24, 2012 sentencing. The United States will present any costs H.A. incurs for the February 24, 2012
at the restitution hearing, as it does not have any at this time.

2/ At the time of their agreement, Chambers had already paid M.T. $3,300, bringing the
total promised compensation to $38,500.

3/ The Exhibits in support of this motion, as well as Special Agent Godshall’s Declaration,
will be filed under seal.

4/ To date, M.T. has not paid the legal bills from Surratt.

5/ The total cost of $1,067 comes from gas, mileage, and hotel (for the February 24, 2012
sentencing only). Gas: $150 per trip x 2 trips = $300. Mileage: 670 miles round trip x 2 trips x $.51
per mile (government mileage reimbursement) = $683.40. Hotel: room for February 24, 2012 = $84.00.


The United States believes that M.T. and H.A. are entitled to restitution from Defendants under
the MVRA for 1) any promised, unpaid surrogacy fees, 2) legal bills that arose as a result of
Defendants’ scheme, and 3) their costs associated with attending Defendants’ sentencing hearings.
Restitution is appropriate for M.T. and H.A. because they were directly and proximately harmed by
Defendants’ scheme. Specifically, M.T. and H.A. traveled to the Ukraine and became pregnant with
the expectation that they would be paid for their services pursuant to a legitimate surrogacy agreement.

Once M.T. and H.A. learned that the surrogacy arrangements crafted by Defendants were illegal, they
ended all contact from Defendants.

Defendants will likely argue that M.T. and H.A. are uncharged co-conspirators instead of
victims. However, Defendants created the scheme, dictated the terms of the agreements, had specialized knowledge of surrogacy law, and represented that the surrogacies were legitimate. M.T. and H.A.’s withdrawal from the “surrogacy” contract and willingness to engage in a legitimate transfer of parental rights through adoption – something Defendants did not do – is strong evidence that M.T. and H.A. were victims, and not co-conspirators.

As victims, M.T. and H.A. should receive restitution for their lost surrogacy fees. M.T. and H.A.
carried a child to term, gave birth to that child, and transferred their parental rights to someone else.
M.T. and H.A. became pregnant pursuant to a surrogacy agreement with Defendants. If the surrogacy
agreements were valid, M.T. and H.A. would have received their surrogacy fees from Defendants.
Therefore, they sustained a significant loss due to Defendants’ criminal actions.

The Ninth Circuit has found that attorneys’ fees that are incurred by private parties “as a direct
and foreseeable result of the defendant’s wrongful conduct may be recoverable.” Gordon, 393 F.3d
1044, 1057 (upholding district court’s award of attorneys’ fees stemming from company’s investigation into defendant’s embezzlement of company funds). Here, M.T.’s attorneys’ fees are a “direct and foreseeable result” of Defendants’ surrogacy fraud. If Defendants had entered into a legitimate surrogacy contract with M.T., she would not have needed to seek counsel to ensure that her transfer of parental rights was legitimate. See United States v. Cummings, 281 F.3d 1046, 1052 (defendant father must pay restitution to mother for legal fees incurred to recover custody of children following defendant’s wrongful removal of children from United States, which led to criminal conviction).

Therefore, the United States requests restitution in the amount of $13,926 for M.T., in order to pay her legal bills incurred due to her withdrawal from the GC agreement with Defendants.
Finally, M.T. and H.A. are entitled to restitution for their costs from attending Defendants’
sentencing hearings. See 18 U.S.C. § 3663A(b) (“the order of restitution shall require that such
defendant. . . (4) reimburse the victim for . . . attendance at proceedings related to the offense.”





Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON RESTITUTION Part 1


We have a list of the Government's Restitution Memorandum. It is a lot of information so it will be posted in a series of posts.


Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 1
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 2
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 3
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 4
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 5
Hilary NEIMAN, Carla CHAMBERS, and Theresa ERICKSON Restitution Part 6
Is the Baby Selling Case Going to Set New Federal Surrogacy Case Law?

I.
INTRODUCTION
The United States requests a restitution hearing for all Defendants on March 2, 2012 at 2 p.m.,
which is the current hearing date/time for Neiman. As discussed in detail below, the United States
requests restitution for a variety of victims with Neiman, Erickson, and Chambers bearing joint and
several liability. The United States also requests a restitution order from Erickson only on behalf of
Sharp Healthcare in excess of $600,000.


II.
DISCUSSION
A. Restitution Is Mandatory


The Mandatory Victims Restitution Act of 1996 provides restitution for a wide variety of federal
offenses:
This section shall apply in all sentencing proceedings for convictions of, or plea
agreements relating to charges for, any offense–
(A) that is--
(i) a crime of violence, as defined in section 16;
(ii) an offense against property under this title, or under section 416(a) of
the Controlled Substances Act (21 U.S.C. 856(a)), including any offense committed by
fraud or deceit; or
(iii) an offense described in section 1365(relating to tampering with
consumer products); and
(B) in which an identifiable victim or victims has suffered a physical injury or
pecuniary loss.
See 18 U.S.C. § 3664A(c)(1).
Pursuant to plea agreements, Defendants all pleaded to a conspiracy to commit wire fraud, either
with wire fraud as the object of the conspiracy or as the Specified Unlawful Activity in a conspiracy to violate 18 U.S.C. § 1957. See Information in 11CR3247-AJB, 11CR3368-AJB, and 11CR3372-AJB.
Given the wire fraud provisions, there is no dispute that Defendants have entered into plea agreements “relating to charges for . . . any offense committed by fraud or deceit,” as provided by 18 U.S.C. §
3664A(c)(1). Therefore, the MVRA applies.
“The primary and overarching goal of the MVRA is to make victims of crimes whole.” United
States v. Gordon, 393 F.3d 1044, 1048 (9th Cir. 2004)(applying the MVRA to Defendant convicted of
wire fraud). Under the statute a "victim" is broadly defined as follows:
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
pattern.
18 U.S.C. § 3663A(a)(2).
"[T]he main inquiry for causation in restitution cases [is] whether there was an intervening cause
and, if so, whether this intervening cause was directly related to the offense conduct'." United States v.
De la Fuente, 353 F.3d 766, 772 (9th Cir. 2003) (quoting United States v. Meksian, 170 F.3d 1260, 1263
(9th Cir. 1999)). Even where there are multiple links in the causal chain, restitution may be ordered so long as the government demonstrates the defendant directly and proximately caused the loss. United States v. Peterson, 538 F.3d 1064, 1077 (9th Cir. 2008) (upholding district court's restitution order to compensate the Department of Housing and Urban Development for losses incurred for 43 Federal Housing Administration insured loans which were made based upon fraudulent gift letters written by defendant).

The MVRA requires a court to order restitution to each victim of an offense as enumerated
therein, without regard for the defendant's economic circumstances. See Gordon, 393 F.3d at 1048 (9th Cir. 2004). However, a court can consider the culpability or economic circumstances of each defendant in apportioning liability. 18 U.S.C. § 3664(h).

Under 18 U.S.C. § 3664, the United States bears the burden of proving both that a person is a
victim for purposes of restitution and the loss amount. United States v. Andrews, 600 F.3d 1167, 1171 (9th Cir. 2010). The district court must apply a preponderance of the evidence standard. Id.