United States of America v. Joseph A. Foistner

2022 DNH 091

• Court: District Court, D. New Hampshire
• Decided: August 3, 2022
• Docket: 18-cr-98-PB-1
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

United States of America

v. Case No. 18-cr-98-PB-1 Opinion No. 2022 DNH 091 Joseph A. Foistner

ORDER

Joseph Foistner has been convicted and sentenced. The only remaining

issue is whether he should be required to make restitution. The probation

office asserts that Foistner’s victims should be awarded restitution for

unreimbursed losses of $2,449,352.57. In making this determination, the

office has credited Foistner with $967,885.13 that one of his victims, North

American Savings Bank (NASB), recovered from a foreclosure sale of 104

Foxberry Drive, a property in New Boston, New Hampshire that Foistner

posted as security for the NASB loan.

Foistner seeks a hearing to challenge the probation office’s restitution

recommendation. His sole argument is that any restitution award must be

reduced by true value of 104 Foxberry rather than what he argues is the far

lower amount that NASB recovered from the foreclosure sale. I decline to give

Foistner a hearing on this issue because he has failed to identify sufficient

facts to support his argument. 18 U.S.C. § 3664(e) specifies that the government must prove the

amount of the loss suffered by a victim by a preponderance of the evidence

when seeking restitution. A defendant must bear the burden of proof with

respect to his financial resources and the needs of his dependents. Id. On all

other issues, the statute provides that the burden of proof shall be allocated

“by the court as justice requires.” Id. In a case like this, where the defendant

challenges the value of collateral supporting a fraudulent loan, I agree with

the government that the defendant bears the burden of proof by a

preponderance of the evidence. See, e.g., United States v. Ritchie, 858 F.3d

201, 211 (4th Cir. 2014) (defendant’s burden to show that victim mishandled

collateral).

The general rule in loan fraud cases is that the restitution a defendant

owes a victim is reduced “by the amount of money the victim received in

selling the collateral, not the value of the collateral when the victim received

it.” Robers v. United States, 572 U.S. 639, 641 (2014). Defendants thus do not

ordinarily receive additional credit when market fluctuations or other

intervening foreseeable events depress the amount that the victim receives

from a foreclosure sale. See id. Foistner acknowledges the general rule but

claims that his case falls within a narrow exception that arguably applies

when an unforeseeable intervening event such as “an unexpected natural

disaster that destroys collateral . . . or its sale to a friend for a nominal sum”

2 breaks the causal link between the defendant’s misconduct and the victim’s

losses. Id. at 646 (dictum). As Foistner sees it, his fraud did not proximately

cause his victims’ losses because 104 Foxberry was worth more than enough

to repay all his victims. Instead, he blames the trustee in his bankruptcy case

for abandoning the estate’s interest in the property and NASB for botching

the foreclosure sale.

Foistner is not entitled to an evidentiary hearing on restitution.

Although he claims that the trustee in his bankruptcy case and NASB are

somehow at fault for failing to recover enough through the foreclosure sale to

repay his victims, he has failed to identify any facts to support his argument.

A defendant must do more than offer unsupported speculation when seeking

an offset against an otherwise legitimate claim for restitution. See United

States v. Padilla-Galarza, 990 F. 3d 60, 93 (1st Cir. 2021) (“Where . . . the

government has made a prima facie showing of a victim’s actual loss through

competent evidence, a defendant must do more than speculate about the

possibility of mitigation in order to obtain an offset.”).

Foistner’s request for an evidentiary hearing is denied. Foistner shall

be required to make restitution to the victims identified in the Presentence

3 Report in the amounts specified therein.

SO ORDERED.

/s/ Paul J. Barbadoro Paul J. Barbadoro United States District Judge

August 3, 2022

cc: Counsel of Record Joseph A. Foistner, pro se