In the United States Court of Appeals For the Second Circuit ______________

August Term, 2019

(Argued: January 10, 2020 Decided: September 1, 2021)

Docket No. 19-208 ______________

UNITED STATES OF AMERICA,

Appellee,

–v.–

DARREN GOODRICH,

Defendant-Appellant,

ABRAXAS J. DISCALA, AKA AJ DISCALA, MARC WEXLER, IRA SHAPIRO, MATTHEW BELL, CRAIG JOSEPHBERG, AKA JOBO, KYLEEN CANE, VICTOR AZRAK, DARREN OFSINK, MICHAEL MORRIS,

Defendants. *

______________ B e f o r e:

CALABRESI, POOLER, CARNEY, Circuit Judges. ______________

* The Clerk of Court is directed to amend the caption to conform with the above. In June 2016, Defendant-Appellant Darren Goodrich pled guilty to conspiracy to commit securities fraud in violation of 18 U.S.C. § 371. As a broker-dealer in the over- the-counter securities market, Goodrich executed fraudulent trades for a co-defendant client with the effect of artificially inflating the share price of a sham company, Cubed, Inc. (“Cubed”). While Goodrich was involved in that activity, his co-defendants arranged the sale of Cubed shares outside the public market in a private placement. The District Court (Vitaliano, J.) held that Goodrich was liable under the Mandatory Victims Restitution Act of 1996 (“MVRA”) for restitution, both to purchasers of Cubed shares in the public market (in the amount of $479,000) and to purchasers in the private placement (in the amount of $1.85 million). Goodrich challenges the $1.85 million portion of restitution, contending that the Government did not show that the private placement losses are attributable to his offense of conviction, as the MVRA requires. We agree with Goodrich. The MVRA authorizes restitution only for losses “directly and proximately” caused by a covered “offense” of conviction. 18 U.S.C. § 3663A(a)(2), (c). This proximate cause element requires that the Government prove, by a preponderance of the evidence, that the losses for which restitution compensates were foreseeable to the defendant in the course of committing the offense of conviction. Because the Government has not adduced sufficient evidence that the private placement losses were foreseeable to Goodrich during his participation in the conspiracy to manipulate the public share price of Cubed, the MVRA does not authorize the $1.85 million in restitution for these losses. REVERSED AND REMANDED. ______________

SHANNON C. JONES (Kevin Trowel, on the brief) on behalf of Jacquelyn M. Kasulis, Acting United States Attorney, United States Attorney’s Office for the Eastern District of New York, Brooklyn, NY, for Appellee.

NATHANIEL Z. MARMUR, The Law Offices of Nathaniel Z. Marmur, PLLC, New York, NY, for Defendant- Appellant. ______________

2 CARNEY, Circuit Judge:

In June 2016, Defendant-Appellant Darren Goodrich pled guilty to one count of conspiracy to commit securities fraud in violation of 18 U.S.C. § 371. Goodrich was a broker-dealer in the over-the-counter (“OTC”) securities market