United States v. Qurashi 1

1
10-348-cr
USA v. Qurashi
1
UNITED STATES COURT OF APPEALS 2
FOR THE SECOND CIRCUIT 3
4
August Term 2010 5
(Argued: November 15, 2010 Decided: March 8, 2011) 6
Docket No. 10–348-cr 7
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UNITED STATES OF AMERICA, 9
10
Appellee, 11
12
-- v. -- 13
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IMRAN QURASHI, 15
16
Defendant-Appellant. 17
18
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B e f o r e : NEWMAN, WALKER, and POOLER, Circuit Judges. 21
22
Appeal from an order of restitution entered by the United 23
States District Court for the Eastern District of New York 24
(Sandra J. Feuerstein, Judge) following Defendant-Appellant Imran 25
Qurashi’s plea of guilty to a nine-count indictment for insurance 26
fraud. Qurashi argues it was error for the district court to add 27
prejudgment interest to the restitution awarded to the defrauded 28
insurers. We hold that a prejudgment interest award can be 29
included in a criminal restitution order to ensure that a 30

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victim’s losses are fully compensated. We also remand to allow 1
the district court to conform the statement of reasons supporting 2
the sentence to Qurashi’s stipulation with the government. 3
AFFIRMED and REMANDED. 4
NORMAN TRABULUS, New York, NY, for 5
Defendant-Appellant. 6
7
CHARLES P. KELLY, Assistant United 8
States Attorney (Loretta E. Lynch, 9
United States Attorney for the 10
Eastern District of New York, Emily 11
Berger, Assistant United States 12
Attorney, on the brief), Brooklyn, 13
NY, for Appellee. 14
15
JOHN M. WALKER, JR., Circuit Judge: 16
Defendant-Appellant Imran Qurashi (“Qurashi”) appeals from a 17
January 16, 2010 order of restitution entered by the United 18
States District Court for the Eastern District of New York 19
(Sandra J. Feuerstein, Judge) following his guilty plea to a 20
nine-count indictment charging him with insurance fraud. Qurashi 21
argues that the district court abused its discretion by including 22
prejudgment interest in the restitution awarded to the defrauded 23
insurers. We affirm the district court’s judgment and hold that 24
prejudgment interest can be awarded in a criminal restitution 25
order to ensure that a victim’s losses are fully compensated. We 26
reject Qurashi’s argument that he was prejudiced by the district 27
court’s failure to determine the victims’ losses within the 90- 28
day statutory window. Finally, we remand to allow the district 29
court to conform the statement of reasons supporting the sentence 30

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to Qurashi’s stipulation with the government. 1
2
BACKGROUND 3
Qurashi twice faked his brother’s death to collect millions 4
of dollars in life insurance proceeds; it was only after the 5
second time that he was caught. In 1993 and 1994, Qurashi and 6
his brother, Adnan Qurashi (“Adnan”), purchased two $3 million 7
life insurance policies on Adnan’s life from the Metropolitan 8
Life Insurance Company (“MetLife”) and New York Life Insurance 9
Company (“New York Life”). In 1995, Qurashi submitted claims to 10
both companies that falsely asserted that Adnan had died in a car 11
accident in Pakistan. The following year, the insurers paid 12
Qurashi more than $6 million on the policies. 13
Adnan, still very much alive, returned to the United States 14
from Pakistan in November 1998, whereupon he assumed a new 15
identity as Qurashi’s fictitious cousin “Hassan Khan.” Flushed 16
with success, Qurashi upped the ante: between 2000 and 2004, he 17
purchased eight $10 million life insurance policies on Hassan 18
Khan’s life from four insurance companies. History repeated 19
itself in 2004: Hassan Khan was purportedly killed in a traffic 20
accident in Pakistan, and Qurashi falsely claimed proceeds on all 21
eight policies. This time, however, the insurance companies 22
refused to pay and opened investigations. 23
An indictment returned on June 28, 2005 charged Qurashi and 24

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Adnan with one count of conspiracy to commit mail fraud and eight 1
counts of mail fraud. Adnan remains a fugitive. After Qurashi 2
entered a guilty plea, District Judge Sandra J. Feuerstein 3
sentenced him in October 2008 to concurrent imprisonment terms of 4
60 months on the conspiracy charge and 108 months on the mail 5
fraud charges, plus three years of supervised release. Judge 6
Feuerstein deferred the determination of restitution, at the 7
government’s request, to allow time to ensure that every 8
insurance company had been accounted for. Qurashi agreed to 9
waive his right to appeal the sentence “as long as the sentence 10
is 121 months or less.” The government concedes, however, that 11
because Qurashi’s waiver referred only to the prison term, it 12
does not bar this appeal from the restitution order. 13
On January 22, 2009, the government submitted a proposed 14
order of restitution, to which Qurashi objected. Judge 15
Feuerstein referred the determination of restitution to 16
Magistrate Judge A. Kathleen Tomlinson, who held a hearing and 17
issued a report and recommendation. The district court adopted 18
the report and recommendation, and rejected Qurashi’s objections. 19
Judge Feuerstein entered judgment and signed a “Statement of 20
Reasons” regarding Qurashi’s sentence on January 16, 2010, and 21
shortly thereafter overruled Qurashi’s objection that the 22
restitution order was untimely. The order included prejudgment 23
interest at a rate of 4 percent. This appeal, confined to the 24

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restitution order, followed. 1
2
DISCUSSION 3
Qurashi argues that the district court erred by including 4
prejudgment interest in its restitution award to New York Life 5
and MetLife. Because the insurers failed to demonstrate how 6
their money would have been used if it had not been paid out to 7
Qurashi, he contends that prejudgment interest compensates the 8
insurers for more than their actual losses. Qurashi further 9
claims that he was prejudiced by the district court’s failure to 10
comply with a 90-day statutory deadline for determining the 11
victims’ losses. 12
We review orders of restitution deferentially, and “will 13
reverse only for abuse of discretion.” United States v. 14
Boccagna, 450 F.3d 107, 113 (2d Cir. 2006) (internal quotation 15
marks omitted). Such abuse can be found only where the 16
“challenged ruling ‘rests on an error of law [or] a clearly 17
erroneous finding of fact, or otherwise can not be located within 18
the range of permissible decisions.’” Id. (quoting United States 19
v. Gonzalez, 420 F.3d 111, 120 (2d Cir. 2005)). 20
21
I. Prejudgment Interest 22
In February 1996, MetLife paid Qurashi $3,201,592.76 on 23
Adnan’s life insurance policy, and New York Life paid Qurashi 24

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$3,069,616.44 the following month on a similar policy. The 1
district court ordered restitution of those insurance payments, 2
which Qurashi had obtained both by overstating his and Adnan’s 3
net worth when he purchased the policies and by submitting a 4
fraudulent death certificate to verify Adnan’s purported death. 5
The restitution order also required Qurashi to pay prejudgment 6
interest on those sums at 4 percent to compensate the insurers 7
for the loss of the use of their money. Qurashi argues that the 8
district court erred in awarding prejudgment interest. He does 9
not, however, challenge the rate, other than to note that the 10
rate claimed was less than the rate of return on portfolio 11
investment. 12
The Mandatory Victims Restitution Act (“MVRA”) requires that 13
a defendant convicted of specific offenses “in which an 14
identifiable victim or victims has suffered a . . . pecuniary 15
loss” be ordered to make restitution to the victim. 18 U.S.C. 16
§ 3663A(a)(1), (c)(1). The defendant must “pay an amount equal 17
to . . . the greater of . . . the value of the property” on the 18
date of the loss or on the date of sentencing, less “the value 19
(as of the date the property is returned) of any part of the 20
property that is returned.” Id. § 3663A(b)(1)(B). “In each 21
order of restitution, the court shall order restitution to each 22
victim in the full amount of each victim’s losses as determined 23
by the court and without consideration of the economic 24

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circumstances of the defendant.” Id. § 3664(f)(1)(A). 1
Qurashi’s appeal poses a question of first impression in 2
this Circuit: whether a criminal restitution order may include 3
prejudgment interest. In a non-precedential summary order, we 4
recently affirmed a district court’s inclusion of lost investment 5
returns in a restitution order. United States v. Scott, 321 F. 6
App’x 71 (2d Cir. 2009). The defendant in Scott had stolen money 7
from three retirement accounts, two of which “would have 8
increased in value by the date of the sentencing” had the assets 9
remained in those accounts. Id. at 72. It was also apparent 10
that “the funds would have remained in those accounts but for” 11
the theft. Id. Given those facts, we concluded that “the actual 12
value of the stolen property, the funds in the retirement 13
accounts, at the time of sentencing was the nominal value of the 14
stolen funds plus the subsequent investment gains lost as a 15
result of the theft,” which meant the district court had 16
“appropriately included in the restitution award the investment 17
earnings that would have accrued as of the date of sentencing.” 18
Id. 19
The MVRA requires sentencing courts to order restitution of 20
the property’s value “on the date of sentencing” if that figure 21
is greater than the property’s value on the date of loss. 18 22
U.S.C. § 3663A(b)(1)(B). The district court in Scott did so by 23
calculating the value that the affected investment accounts would 24

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have reached as of the sentencing date had the money not been 1
stolen. See Scott, 321 F. App’x at 72. In this case, MetLife 2
and New York Life did not document what would have happened to 3
the insurance proceeds they paid to Qurashi. Although both 4
requested prejudgment interest and supported those requests with 5
affidavits of company officials, neither made any representations 6
as to how their money would have been used absent Qurashi’s 7
fraud. The funds were not, as in Scott, stolen from specific 8
investment accounts whose gains and losses between the date of 9
the fraud and the date of the sentencing could be tracked. 10
Qurashi argues that the absence of tracking is a fatal flaw. 11
Prejudgment interest is only appropriate, he contends, where a 12
victim had a contractual right to interest on the funds at issue. 13
Absent a showing as to what MetLife and New York Life would have 14
done with the money that went to Qurashi, he argues, the district 15
court erred in awarding prejudgment interest on that amount. 16
Ordinary prejudgment interest, in Qurashi’s view, amounts to an 17
award of expectation damages and therefore exceeds the proper 18
scope of restitution. 19
“[T]he purpose of restitution is essentially compensatory: 20
to restore a victim, to the extent money can do so, to the 21
position he occupied before sustaining injury.” Boccagna, 450 22
F.3d at 115. The “primary and overarching” goal of the MVRA is 23
“to make victims of crime whole, to fully compensate these 24

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victims for their losses and to restore these victims to their 1
original state of well-being.” Id. (quoting United States v. 2
Simmonds, 235 F.3d 826, 831 (3d Cir. 2000)). We think it 3
significant that the statute mandates that courts “order 4
restitution to each victim in the full amount of each victim’s 5
losses as determined by the court[.]” 18 U.S.C. § 3664(f)(1)(A) 6
(emphasis added). However, the award cannot “allow[] a victim to 7
recover more than his due.” United States v. Nucci, 364 F.3d 8
419, 424 (2d Cir. 2004). 9
We have “construe[d] ‘value’ as used in the MVRA to be a 10
flexible concept to be calculated by a district court by the 11
measure that best serves Congress’s statutory purpose.” 12
Boccagna, 450 F.3d at 115. The value determinations at issue in 13
Boccagna were for real property, and flexibility was necessary 14
“because the law recognizes a number of reasonable measures of 15
property value.” Id. Although the same complexity does not 16
inhere in value determinations where the property lost is cash, 17
accounting for the time-value of money requires no less 18
flexibility. If sentencing courts are required to compensate 19
victims for “the full amount of each victim’s losses,” there is 20
no reason to exclude losses that result from the deprivation of 21
the victim’s ability to put its money to productive use. In 22
light of the inherent difficulty of determining in the “but for” 23
world the earnings that would have resulted from the use of the 24

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wrongfully acquired funds, prejudgment interest stands in to 1
provide a rough but fair approximation of such losses. 2
Where Congress has not spoken specifically to the 3
availability of interest, courts are to resolve the question by 4
appraising “the congressional purpose in imposing [the statutory 5
obligation] and in the light of general principles deemed 6
relevant by the Court.” Rodgers v. United States, 332 U.S. 371, 7
373 (1947). The MVRA’s purpose of compensating victims for their 8
losses is advanced by allowing prejudgment interest, the 9
“essential rationale” for which “is to ensure that an injured 10
party is fully compensated for its loss.” City of Milwaukee v. 11
Cement Div., Nat’l Gypsum Co., 515 U.S. 189, 195 (1995). 12
Recognizing that a victim’s losses may change in value between 13
the date of the loss and the date of sentencing, the MVRA 14
mandates that the higher of those figures be used for restitution 15
purposes. Money is not static, and companies do not store their 16
reserves under mattresses for safekeeping. The rule urged by 17
Qurashi would presume that victims do precisely that, placing on 18
them the burden of showing how they would have used the lost 19
funds in order to justify an award of prejudgment interest. The 20
MVRA does not impose such a requirement. 21
We hold that the MVRA allows a sentencing court to award 22
prejudgment interest in a criminal restitution order to ensure 23
compensation “in the full amount of each victim’s losses.” 18 24

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U.S.C. § 3664(f)(1)(A). The district court therefore acted 1
within its discretion in awarding prejudgment interest on funds 2
that it determined MetLife and New York Life would have otherwise 3
put to productive use. This outcome is consistent with the 4
decisions of our sister circuits, which have approved the 5
inclusion of prejudgment interest in restitution orders under the 6
MVRA and its precursor, the Victim and Witness Protection Act 7
(“VWPA”). See, e.g., United States v. Gordon, 393 F.3d 1044, 8
1059 (9th Cir. 2004); United States v. Shepard, 269 F.3d 884, 886 9
(7th Cir. 2001); Gov’t of the Virgin Islands v. Davis, 43 F.3d 10
41, 47 (3d Cir. 1994); United States v. Hoyle, 33 F.3d 415, 420 11
(4th Cir. 1994); United States v. Patty, 992 F.2d 1045, 1050 12
(10th Cir. 1993); United States v. Rochester, 898 F.2d 971, 983 13
(5th Cir. 1990). 14
Gordon sensibly suggests a rule that prejudgment interest be 15
awarded unless evidence indicates the victim would not have put 16
the funds to productive use. The Ninth Circuit upheld the 17
district court’s award of prejudgment interest for embezzled cash 18
and shares of stock as to which Cisco Systems, the victimized 19
corporation, had “completely liquidated” its other holdings 20
before discovering the fraud. Gordon, 393 F.3d at 1059. 21
Regarding “interest” as “simply a proxy for a lost opportunity,” 22
the Ninth Circuit found that awarding “prejudgment interest 23
reflects the productive purposes for which a profit maximizing 24

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entity like Cisco uses its cash reserves,” even if the company 1
“would not necessarily have placed its stock proceeds in an 2
interest bearing account” absent the embezzlement. Id. (internal 3
quotation marks omitted). However, the Ninth Circuit also found 4
that the district court abused its discretion in awarding 5
prejudgment interest for securities that Cisco had “no intention 6
of completely liquidating.” Id. Prejudgment interest on such 7
securities could not “constitute an actual loss to the victim,” 8
because it would be “too speculative to conclude that Cisco would 9
have liquidated these securities and placed the cash proceeds in 10
an interest bearing account or used them for some other 11
productive purpose.” Id. at 1059-60 (internal quotation marks 12
omitted). We need not, in the case before us, definitively opine 13
as to when a district court’s inclusion of prejudgment interest 14
would constitute an abuse of discretion. It is plain to us that, 15
in the absence of evidence that New York Life and MetLife would 16
not have put the money at issue to productive use, no such abuse 17
occurred here. 18
Prejudgment interest does not, as Qurashi argues, amount to 19
expectation damages. Expectation damages “strive to place an 20
‘aggrieved party in the same economic position it would have been 21
in had both parties fully performed’ their contractual 22
obligations.” Boccagna, 450 F.3d at 119 (quoting Bausch & Lomb 23
v. Bressler, 977 F.2d 720, 729 (2d Cir. 1992)). Criminal 24

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restitution, by contrast, “is not concerned with a victim’s 1
disappointed expectations but only with his actual loss.” Id. 2
In Boccagna, the U.S. Department of Housing and Urban Development 3
(“HUD”) acquired title to dozens of properties after a developer 4
defaulted on its fraudulently obtained HUD-guaranteed mortgage 5
loans, which were meant to encourage development of affordable 6
housing. Id. at 109-10. HUD then sold the properties for a 7
nominal price to a New York City agency for development as 8
low-income housing, and sought restitution for the difference 9
between the discounted sale price and fair market value. Id. at 10
110. Because HUD sold the properties at a discount to achieve 11
the benefit of its bargain, namely affordable housing, the Second 12
Circuit concluded that restitution “would, in effect, be 13
expectation damages,” which cannot be awarded under the MVRA. 14
Id. at 119. Here, the prejudgment interest award is not meant to 15
guarantee the benefit of any bargain, but is designed to ensure 16
that the insurer victims are fully compensated for their actual 17
loss, which includes the loss of the ability to put their money 18
to productive use. 19
20
II. Timeliness of Restitution Award 21
When a “victim’s losses are not ascertainable by the date 22
that is 10 days prior to sentencing,” the MVRA provides that “the 23
court shall set a date for the final determination of the 24

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victim's losses, not to exceed 90 days after sentencing.” 18 1
U.S.C. § 3664(d)(5). Magistrate Judge Tomlinson held Qurashi’s 2
restitution hearing on February 11, 2009, more than 90 days 3
following his October 29, 2008 sentencing, and the district court 4
did not enter the restitution order until September 30, 2009. 5
The district court rejected Qurashi’s objection that the 6
restitution determination was untimely, which he renews on 7
appeal. 8
During the pendency of this appeal, the Supreme Court 9
decided Dolan v. United States, 130 S. Ct. 2533 (2010). 10
Interpreting § 3664(d)(5), the Court held that “a sentencing 11
court that misses the 90-day deadline nonetheless retains the 12
power to order restitution - at least where . . . the sentencing 13
court made clear prior to the deadline’s expiration that it would 14
order restitution, leaving open (for more than 90 days) only the 15
amount.” Dolan, 130 S. Ct. at 2537. Here, the district court 16
made clear at sentencing that it would order restitution, and 17
therefore retained the power to do so. The Supreme Court further 18
provided that, “in the unlikely instances where that delay does 19
cause the defendant prejudice - perhaps by depriving him of 20
evidence to rebut the claimed restitution amount - the defendant 21
remains free to ask the court to take that fact into account upon 22
review.” Id. at 2542. Although Qurashi argues that he was 23
prejudiced by the delay, we find no evidence of prejudice and 24

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therefore conclude that the district court properly asserted its 1
authority to award restitution. 2
3
III. Statement of Reasons 4
Following his guilty plea, Qurashi and the government 5
stipulated to a Sentencing Guidelines offense level of 30 and a 6
Guidelines range of 97 to 121 months. The government recommended 7
a sentence at the lower part of the range. On October 29, 2008, 8
Judge Feuerstein imposed a sentence consistent with this 9
stipulation: concurrent imprisonment terms of 60 months on the 10
conspiracy charge and 108 months on the mail fraud charges, plus 11
three years of supervised release. However, in the “Statement of 12
Reasons” that she signed more than a year later, on January 16, 13
2010, Judge Feuerstein noted that the court had imposed an above- 14
range sentence for offense level 28, for which the imprisonment 15
range is 78 to 97 months. Thus, despite the stipulation to a 16
sentence within the range established by Guidelines level 30, 17
Judge Feuerstein characterized the sentence as above-range for 18
Guidelines level 28. 19
Qurashi has requested that we remand to allow the district 20
court to amend the statement of reasons to reflect or otherwise 21
account for the stipulation. The government has no objection to 22
this request. As it appears that the district court’s departure 23
from the stipulation may have been inadvertent, a remand is 24

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appropriate. See United States v. Stuckey, 317 F. App'x 48, 51 1
(2d Cir. 2009) (remanding to allow district court to correct 2
erroneous failure to complete the “Statement of Reasons” portion 3
of the judgment form). We therefore remand for the limited 4
purpose of allowing the district court to amend the statement of 5
reasons to correctly reflect or otherwise account for the 6
parties’ stipulation. 7
8
CONCLUSION 9
We have considered Qurashi’s remaining arguments and find 10
them to be without merit. For the foregoing reasons, the 11
judgment of the district court is AFFIRMED. We REMAND to allow 12
the district court to amend the statement of reasons supporting 13
Qurashi’s sentence. 14

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