## Facts

- Timothy Donaghy, an NBA referee, provided betting recommendations using confidential league information to a betting scheme involving James Battista and intermediary Thomas Martino.
- The charged conspiracy began in December 2006 and focused on transmitting insider information (e.g., officiating crews, referee-team relations, player conditions) to assist wagers.
- Donaghy also previously bet on NBA games through a separate arrangement with Jack Concannon beginning in the 2003–04 season, but that conduct was not included in the charged conspiracy.
- During the charged period, Donaghy officiated 16 regular-season games for which he provided betting recommendations to Martino and Battista.
- Donaghy pled guilty to conspiracy to commit wire fraud and conspiracy to transmit wagering information; Martino and Battista also pled guilty to conspiracy counts tied to the scheme.
- The United States, acting on behalf of the NBA, sought restitution for (1) Donaghy’s compensation tied to compromised games, (2) outside counsel fees incurred while assisting the government’s investigation/prosecution, and (3) NBA employee salary costs for tape review done at the government’s request.

## Issues

1. Whether the NBA was a “victim” eligible for restitution under the MVRA and VWPA for the defendants’ conspiracy offenses.
2. Whether the § 1084 conspiracy (transmitting wagering information), as committed here, qualified as a “crime committed by fraud or deceit” under the MVRA.
3. Whether Donaghy’s earlier personal betting through Concannon was part of the offense conduct for which restitution could be ordered.
4. Which claimed losses (tainted-game compensation, attorney’s fees, and internal investigative costs) were directly and proximately caused by the offenses and thus compensable, and in what amounts.
5. Whether restitution should be imposed jointly and severally, apportioned among defendants, or both.

## Decision

- The court held the NBA was a “victim” under both the MVRA and VWPA because it was directly and proximately harmed by the scheme’s misuse of confidential information and compromised officiating.
- The court concluded the § 1084 conspiracy, as carried out in this case, was “committed by fraud or deceit,” triggering MVRA mandatory restitution for qualifying losses.
- The court excluded Donaghy’s earlier Concannon betting from the restitution scope because it was not part of the charged conspiracy.
- The court awarded the NBA total restitution of $217,266.94, including Donaghy’s compensation and expenses attributable to the 16 compromised games and certain investigation/prosecution-related costs.
- The court imposed a mixed structure: some losses were joint and several, while certain costs (including attorney’s fees and related expenses) were apportioned among defendants based on role and statutory basis.

## Legal Principles

- A restitution “victim” under the MVRA/VWPA is a person directly and proximately harmed by the offense of conviction, including harms to property interests and qualifying response costs.
- An offense may fall within the MVRA’s “fraud or deceit” category based on how it was committed and admitted in the plea, even if the statute of conviction is not categorically labeled as fraud.
- Restitution is limited to losses caused by the offense conduct underlying the conviction; uncharged or separate schemes cannot expand restitution scope.
- Restitution may include compensation paid for dishonest services when the victim was deprived of the benefit of its bargain by fraud connected to the offense.
- Under 18 U.S.C. § 3663A(b)(4) and § 3663(b)(4), recoverable expenses can include reasonable costs incurred during participation in the investigation or prosecution of the offense or attendance at related proceedings, including certain attorney’s fees and internal investigative labor.
- Courts may impose restitution jointly and severally or apportion it among defendants under 18 U.S.C. § 3664(h), considering relative responsibility and statutory coverage.

## Conclusion

The court ordered $217,266.94 in restitution to the NBA, finding it was directly harmed by the defendants’ insider-information betting conspiracy and allowing recovery for tainted-game compensation and reasonable investigation-related costs, while excluding losses tied to Donaghy’s separate earlier betting and structuring liability through a combination of joint-and-several and apportioned awards.


United States v. Donaghy, 570 F. Supp. 2d 411 (E.D.N.Y. 2008)