Victims Fail to Alter Restitution in Crypto Theft Case

On Tuesday, April 30, 2024, the United States District Court for the Northern District of California denied motions to reopen sentencing or amend restitution orders in three related criminal cases involving theft of cryptocurrency.

The cases involved defendants Ahmad Wagaafe Hared, Matthew Gene Ditman, and Anthony Francis Faulk, who had pleaded guilty to charges connected to stealing digital currency like Ethereum from multiple victims. Two victims, referred to as JD and NA in court documents, had participated in the investigation by providing information to authorities about how much Ethereum was stolen from their blockchain wallets.

JD and NA also submitted petitions to the Department of Justice seeking compensation through the remission process, where victims can recover losses from forfeited assets. However, they did not participate in establishing restitution amounts at sentencing. At sentencing, Judge William H. Orrick ordered restitution in amounts lower than what JD and NA had reported losing, based on recommendations from prosecutors.

After discovering the restitution orders did not fully cover their losses, JD and NA filed motions to either reopen sentencing proceedings under the Crime Victims’ Rights Act or amend the restitution orders under the Mandatory Victims Restitution Act. They argued the discrepancies occurred because the information provided during the remission process was not shared with prosecutors compiling restitution requests.

However, Judge Orrick denied the motions. The court found that under the statutes governing criminal restitution, victims can only petition to amend an order if they discover further losses after the order is issued. Since JD and NA were aware of their full losses before sentencing, they did not meet this statutory requirement. The judge acknowledged notification letters sent to victims prior to sentencing did not clearly explain how restitution differed from remission.

While Judge Orrick expressed sympathy for JD and NA, he concluded the law did not allow him to grant their requested relief directly. However, the ruling did not preclude the victims from pursuing a writ of mandamus with the Ninth Circuit Court of Appeals, which the Crime Victims’ Rights Act allows victims to do if denied relief by a district court regarding their rights.

Please contact BlockTribune for access to a copy of this filing.