Restitution Amount Includes Currency That Was Likely Drug Proceeds

US v. Taylor: Taylor was a member of the Baltimore Gun Trace Task Force (as immortalized in David Simon’s We Own This City – Taylor was played by Robert Harley). As part of that task force, “Taylor and some of his colleague stole money, drugs, and other items on the job,” which resulted in his conviction for “Hobbs Act robbery and racketeering offenses.” At trial, a pair of drug dealers testified that Taylor stole cash from them and “at least some of the stolen cash . . . came from illegal drug sales.” Taylor argued that they were not “victims” for restitution purposes. The district court disagreed and ordered Taylor to pay restitution of more than $228,000 “for the cash and personal property” (but not for the drugs).

On appeal, the Fourth Circuit affirmed the district court’s restitution order. Ultimately the court rejected Taylor’s attempt to define “pecuniary loss” to exclude funds generated by illegal activity, concluding that it was “aware of no authority – and Taylor cites none – saying a person’s previously unlawful conduct has any bearing on whether the person suffers a pecuniary loss” during a robbery. The common law rule, as defined by a Restatement in 1937, provided that if A steals from B and then C steals from A, “A is entitled to restitution from C . . .since A’s wrong to B is not connected with C’s wrong to A.” The court distinguished drug proceeds from drugs themselves, noting that the drugs are contraband and “no person may assert an ownership interest . . . in contraband or other property that it is illegal to possess.” Finally, the court noted that Congress provided no statutory mechanism for parsing loss in such a way as to exclude proceeds of unlawful activity.

District Judge Lydon concurred, writing separately to expound on the Government’s ability to seek forfeiture of the drug proceeds from Taylor’s victims once they are reimbursed.