## Facts

- From about 1987 to 2001, defendants operated fishing and distribution businesses tied to harvesting South Coast and West Coast rock lobster in South African waters for export to the United States.
- Defendants allegedly took lobster far in excess of South African quotas and used bribes to reduce enforcement risk.
- When importing into the United States, defendants used false or misleading customs declarations.
- South African authorities discovered the scheme in 2001 after seizing a container of fish intended for the United States, triggering parallel investigations.
- Defendants pleaded guilty in the Southern District of New York to conspiracy and substantive offenses involving the Lacey Act and smuggling.
- The United States sought restitution payable to the Republic of South Africa under the Mandatory Victims Restitution Act (MVRA) and, alternatively, the Victim and Witness Protection Act (VWPA).
- The district court denied restitution under both statutes, concluding South Africa lacked a property interest in the lobsters (and related revenues) and was not directly and proximately harmed; it also relied on the MVRA’s complexity exception.

## Issues

1. Whether the Republic of South Africa had a sufficient property interest in rock lobsters unlawfully harvested from its waters to qualify as a “victim” entitled to restitution under the MVRA and/or VWPA.
2. Whether the MVRA’s “complexity” exception permitted denying restitution because calculating loss would complicate and prolong sentencing.

## Decision

- The Second Circuit vacated the restitution denials and remanded.
- The court held South Africa had a compensable property interest in rock lobsters unlawfully taken from its waters, informed by South African law governing marine resources.
- The court held South Africa was “directly and proximately harmed” by defendants’ conduct and therefore qualified as a restitution victim under both the MVRA and VWPA.
- The court held the MVRA’s complexity exception did not justify refusing restitution on this record; the statute required the district court to undertake the needed fact-finding rather than deny restitution.

## Legal Principles

- A foreign sovereign may be a “victim” for MVRA/VWPA restitution when it suffers direct and proximate property harm from the offense of conviction.
- State regulatory and ownership regimes over natural resources can establish a compensable property interest in resources unlawfully extracted from territorial waters.
- Under the MVRA, restitution is mandatory for covered offenses unless a narrow statutory exception applies.
- The MVRA complexity exception does not permit denial of restitution merely because valuation is difficult or time-consuming; courts must proceed with reasonable loss determination methods where feasible.

## Conclusion

The Second Circuit required renewed restitution proceedings, holding that South Africa’s proprietary interest in unlawfully harvested rock lobster and the direct, foreseeable depletion and economic loss from defendants’ scheme made it a restitution victim, and that administrative difficulty alone could not defeat mandatory restitution under the MVRA.


United States v. Bengis, 631 F.3d 33 (2d Cir. 2011)