[P U B L IS H ]

IN THE UNITED STATES COURT OF APPEALS

FILED

F O R THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

JULY 27, 2007

THOMAS K. KAHN

N o . 06-13267

CLERK

D . C. Docket No. 04-00287-CR-1-1

U N IT E D STATES OF AMERICA,

Plaintiff-Appellee,

versus

JOSEPH W. ROBERTSON,

Defendant-Appellant.

A p p e al from the United States District Court

fo r the Northern District of Georgia

(J u ly 27, 2007)

B efo re PRYOR, KRAVITCH and ALARCON,* Circuit Judges.

P R Y O R , Circuit Judge:

T h e two main issues in this appeal relate to restitution under the Mandatory V ictim Restitution Act, 18U.S.C. § 3663A: (1) was it an abuse of discretion to a ss ig n the same restitution value to each stolen good, regardless of whether that g o o d was later sold by the offender; and (2) was a purchaser of the stolen goods, w h o was sued by and settled with the manufacturer on grounds not disclosed in the r ec o r d , a victim entitled to restitution of the cash paid in settlement? A jury co n v icted Joseph W. Robertson of wire and mail fraud for fraudulently obtaining so ftw are from Novell, Inc., through the use of fictional purchasers. Robertson sold m a n y units of that software to Network Systems Technology, Inc. Network S ystem s later paid Novell to settle a civil suit filed by Novell on grounds not d isclo sed in the record. The district court sentenced Robertson to 96 months of im p r is o n m e n t and ordered restitution to Novell for the wholesale price of every u n retu rn ed unit of software and restitution to Network Systems for the money it p aid Novell to settle. In addition to his appeals of two convictions and the ap p licatio n of a sentencing enhancement, all of which we affirm, Robertson c h a lle n g e s the calculation of the restitution owed Novell and argues that Network S ystem s was not a victim entitled to restitution. We agree with the latter argument, b u t not the former one. Because the district court did not abuse its discretion when it calculated the restitution owed Novell, we affirm that order of restitution. We v acate the order of restitution to Network Systems because it was not a victim. I. BACKGROUND W e divide our description of the factual and procedural background into th ree parts. First, we describe Robertson's fraudulent acquisition of software from N o v e ll. Second, we describe Robertson's sale of the stolen software to Network S ystem s. Third, we discuss Robertson's convictions and sentencing.

A . The Acquisition of the Units of Software N o v ell manufactures computer software called Netware. Novell sells units o f Netware, each of which includes a copy of the software and a license to use it, d irectly to end users, distributors, companies, and government agencies. During th e period in which Robertson fraudulently acquired Netware from Novell, the co m p an y was headquartered in Utah. To order from Novell, a customer would c o m m u n ic ate with the company by e-mail, telephone, or facsimile. Novell offered N e tw a re to educational institutions at discounted prices, which could be as much as 9 0 percent lower than the retail prices.

In May 1999, Novell received a purchase order by facsimile from ACL L e ar n in g Center for units of Netware at discounted prices. The order was signed J o e Robertson/ACL Learning Center, and the address for shipment was that of a h o u se in Georgia rented by Robertson's mother, where he then lived and m ain tain ed an office with file cabinets, a bed, a computer, copy machines, and a f ac sim ile machine. Novell shipped the units of software and received two similar o rd ers in June 1999, for which it shipped additional units.

In August 1999, Novell received a purchase order by facsimile from James T u r n e r of Cobb Academy for units of Netware at discounted prices. As requested in the order, Novell shipped the units of software to a post office box at a Mail B o x es Etc. store. The post office box was rented by Robertson.

In November 1999, Novell shipped units of Netware at discounted prices to F u lto n County Educational Services, but Novell has no record of how the order w as placed. The address for Fulton County Educational Services was, in fact, the a d d r e ss for an apartment complex where Heather Sharpe then lived. Sharpe knew R o b ertso n , although she testified that she never received a package for him, and th e r e was no evidence that Robertson knew Sharpe's address or ever went to her a p a r tm en t.

In February and March 2000, Novell received three purchase orders by facsim ile from Jay McGhee of Atlanta City Educational Services for units of N etw are at discounted prices. As requested in the order, Novell shipped the units o f software to 253 Trinity Avenue, which was actually the address for an apartment ren ted by Lee Ann Vance. Vance knew Robertson and received at her apartment tw o or three packages for him. N o v e ll shipped a total of 378 units of Netware to ACL Learning Center, C o b b Academy, Fulton County Educational Services, and Atlanta City Educational S erv ices. Each unit had a unique part number and license serial number. Novell n ev er received payment for any of the units shipped. It is the policy of Novell not to ship software to any customer who has an outstanding balance for more than 30 d ays.

B. The Sale of Units of Software to Network Systems In June 1999, an individual who identified himself as Gino Barrett offered to sell units of Netware for approximately $2000 each to Network Systems, a co m p u ter hardware and software engineering firm owned by Michael Oken.

Because the wholesale price would have been around $10,000 each, Oken sent two in d iv id u als, Scott Richardson and Donald Coleman, to inspect the units of so ftw are. When asked how he obtained the units, Barrett stated that he was a d ealer of Novell software. At trial, Richardson and Coleman identified Robertson a s "Barrett." Network Systems purchased units of Netware from Robertson on more than ten occasions. During the period in which Robertson acquired Netware from N o v ell, Network Systems bought Netware only from Robertson. Robertson admits th at Network Systems purchased 239 of the 378 units of Netware shipped by N o v e ll to ACL Learning Center, Cobb Academy, Fulton County Educational S e rv ic es , and Atlanta City Educational Services. There is no evidence that R o b ertso n sold the other 139 units.

N etw o rk Systems resold the units of Netware for a profit of $42,721. If the c u s to m e r requested it, the unique serial number of each unit purchased was printed o n the sales invoice. Serial numbers reflected in the sales invoices of Network S ystem s match serial numbers of units of Netware shipped by Novell to all four fictio n al educational institutions.

In November 2004, Network Systems and Novell settled civil litigation r ela te d to the Netware purchased from Robertson. As part of a confidential settlem en t agreement, Network Systems paid Novell $125,000. Robertson asserts th at Novell sued Network Systems for breach of a distributor agreement, because N e tw o r k Systems purchased units of Novell software from a source other than N o v ell or an authorized Novell distributor, but there is no evidence in the record of th e precise grounds for the lawsuit between Network Systems and Novell. In a v ictim impact statement made at sentencing, Oken mentioned "[t]he Lanham Act" b u t did not elaborate further.

C . Robertson's Convictions and Sentencing I n January 2006, Robertson was convicted by a jury on eight counts of wire frau d , 18U.S.C. § 1343, for causing eight purchase orders to be sent in interstate c o m m e rc e by facsimile on behalf of ACL Learning Center (counts 1 through 3), C o b b Academy (count 4), Fulton County Educational Services (count 5), and A tlan ta City Educational Services (counts 6 through 8). Robertson was also co n v icted on eight counts of mail fraud, id. § 1341, for causing Novell products to b e sent by private and interstate carrier boxes to ACL Learning Center (counts 9 th r o u g h 11), Cobb Academy (count 12), Fulton County Educational Services (co u n t 13), and Atlanta City Educational Services (counts 14 through 16).

Robertson moved for a judgment of acquittal as to the counts relating to Fulton C o u n ty Educational Services (counts 5 and 13), and the district court denied the m o tio n .

The presentence investigation report applied the edition of the Sentencing G u id e lin e s in effect at the time Robertson committed his offenses, see United S tates Sentencing Guidelines (Nov. 1998), because the later edition of the G u id elin es in effect at sentencing would have resulted in higher offense levels.

The presentence report calculated a total offense level of 23, which included an en h an cem en t of 2 levels for sophisticated means. See id. § 2F1.1(b)(5)(C). The p r e se n te n c e report recommended restitution of $1,341,522 to Novell, which was th e wholesale price of all 378 of the fraudulently obtained and unreturned units of so ftw are. The presentence report then mentioned the possibility of restitution of $ 1 2 5 ,0 0 0 to Network Systems for the money Network Systems paid Novell to settle its civil suit. Under the Restitution Act, defendants convicted of wire or mail frau d must make restitution to any "victim" of their offenses. See United States v. D ic k e rs o n , 370 F.3d 1330, 1335-36 (11th Cir. 2004) (restitution required for wire f ra u d ) ; United States v. Yeager, 331 F.3d 1216, 1227 (11th Cir. 2003) (mail fraud).

T h e district court followed the recommended Guidelines calculations and im p o sed a sentence of 96 months of imprisonment. Robertson objected to the a p p lic atio n of the enhancement for sophisticated means. The district court then o rd ered restitution to Network Systems in the amount of $125,000 and to Novell in th e amount of $1,216,522, which the court calculated by subtracting $125,000 fro m $1,341,522. Robertson objected to the calculation of the amount of restitu tio n owed Novell and to any award of restitution to Network Systems.

II. STANDARDS OF REVIEW "W e review de novo the legal question of whether the record contains su fficien t evidence to support [a] guilty verdict." United States v. Tinoco, 304 F .3 d 1088, 1122 (11th Cir. 2002). We "view the evidence in the light most fav o rab le to the government and resolve all reasonable inferences and credibility ev alu atio n s in favor of the jury's verdict." Id. (internal quotation marks omitted). T h e evidence need not "exclude every reasonable hypothesis of innocence or be w h o lly inconsistent with every conclusion except that of guilt, provided that a reaso n ab le trier of fact could find that the evidence established guilt beyond a r ea so n a b le doubt." Id. (internal quotation marks omitted).

W e review for clear error "the district court's factual findings related to the im p o sitio n of sentencing enhancements," United States v. Barakat, 130 F.3d 1448, 1 4 5 2 (11th Cir. 1997), including a finding that a defendant used sophisticated m e an s , cf. id. at 1456-57 (in sentencing for tax evasion, finding of "sophisticated m e an s " reviewed for clear error). A factual finding is clearly erroneous "when a lth o u g h there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S. Ct. 1504, 1511 (1 9 8 5 ) (internal quotation marks omitted). Although review for clear error is d eferen tial, a finding of fact must be supported by substantial evidence. See, e.g., D r ew v. Dep't of Corr., 297 F.3d 1278, 1283 (11th Cir. 2002) (clear error standard "req u ires us to affirm a district court's findings of fact unless the record lacks su b stan tial evidence to support that determination" (internal quotation marks o m itte d ) ) .

O u r analysis of an order of restitution under the Restitution Act involves th ree standards of review. We review de novo "the legality of an order of r es titu tio n ," United States v. Washington, 434 F.3d 1265, 1267 (11th Cir. 2006), b u t review for abuse of discretion the determination of the restitution "value" of lo st or destroyed property, see United States v. Shugart, 176 F.3d 1373, 1375 (11th C ir. 1999). We review for clear error "factual findings underlying a restitution o rd er." Washington, 434 F.3d at 1267; see also Shugart, 176 F.3d at 1375.

III. DISCUSSION R o b ertso n presents five arguments on appeal. First, he contends that the ev id en ce was insufficient to convict him on the counts of fraud related to Fulton C o u n ty Educational Services (counts 5 and 13). Second, he argues that the district co u rt should not have applied a sentencing enhancement for sophisticated means.

Third, he asserts that the district court miscalculated the restitution owed Novell, b ecau se the court did not consider that some unreturned units of Netware may not h av e been sold. Fourth, Robertson argues that Network Systems was not a victim en titled to restitution. Fifth, Robertson contends, as an alternative to his fourth arg u m en t, that the district court incorrectly calculated the amount of restitution o w ed Network Systems. A . The Evidence Was Sufficient to Convict Robertson on the Counts of Fraud R ela ted to Fulton County Educational Services.

R o b ertso n argues that the government did not offer direct evidence sufficient to convict him on the counts of mail and wire fraud related to Fulton County E d u catio n al Services. The government responds that it presented sufficient circu m stan tial evidence for a reasonable jury to convict. We agree with the g o v ern m en t. We first discuss the count of mail fraud and then turn to the count of w ire fraud.

M ail fraud consists of "(1) an intentional participation in a scheme to d e f ra u d a person of money or property, and (2) the use of the mails in furtherance o f the scheme." United States v. Sharpe, 438 F.3d 1257, 1263 (11th Cir. 2006) ( in te rn a l quotation marks omitted). Robertson contends that the government failed to offer direct evidence that he caused Novell to mail units of software to Fulton C o u n ty Educational Services. This argument is unavailing.

M ail fraud can be proved by circumstantial evidence, see United States v. M etallo , 908 F.2d 795, 798 (11th Cir. 1990), and the government offered sufficient c ir cu m s ta n tia l evidence. The evidence established that Novell received an order fro m Fulton County Educational Services that requested shipment to an address w h ere Heather Sharpe lived and Sharpe was acquainted with Robertson. Although S h arp e testified that she did not receive any packages for Robertson, we make all reaso n ab le inferences and credibility determinations in favor of the government.

See United States v. Dennis, 237 F.3d 1295, 1300 (11th Cir. 2001). The evidence e sta b lis h e d that, during a period when Network Systems bought units of Netware o n ly from Robertson, Network Systems sold units of Netware that bore the unique serial numbers of units shipped to Fulton County Educational Services. Based on th is evidence, a reasonable jury could have convicted Robertson on the count of m ail fraud related to Fulton County Educational Services.

T o establish the offense of wire fraud, the government must prove "(1) in te n tio n a l participation in a scheme to defraud and (2) use of the interstate wires in furtherance of the scheme." United States v. Hasson, 333 F.3d 1264, 1270 (11th C ir. 2003). Robertson argues that the government failed to produce a facsimile co v er sheet or other direct evidence that an interstate wire was used. This arg u m en t also fails.

B ecau se "[t]he only difference between" mail and wire fraud "is [that] mail frau d requires proof of the use of the mails[] while wire fraud requires proof of the u s e of the wires," Beck v. Prupis, 162 F.3d 1090, 1095 (11th Cir. 1998), wire frau d , like mail fraud, can be proved by circumstantial evidence. We agree with th e Sixth Circuit that "[t]here is no requirement that the government produce direct p ro o f in the form of telephone bills" or facsimile cover sheets. United States v. G riffith , 17 F.3d 865, 874 (6th Cir. 1994). As "[p]roof of a routine practice of u sin g the mail to accomplish a business end is sufficient to support a jury's d eterm in atio n that mailing occurred," United States v. Waymer, 55 F.3d 564, 571 (1 1 th Cir. 1995), proof of a routine practice of using the wires to accomplish a b u sin ess end is sufficient to support a count of wire fraud.

T h e government presented ample circumstantial evidence. It offered ev id en ce that Robertson routinely sent purchase orders to Novell by interstate facsim ile. The government proved that Robertson was located in or around A tlan ta, Georgia, and Novell was located in Utah where customers contacted it by e-m ail, telephone, or facsimile. The government proved that Robertson had a facsim ile machine and sent seven other purchase orders to Novell by facsimile.

Based on this evidence, a reasonable jury could have found that Robertson sent by facsim ile the purchase order on behalf of Fulton County Educational Services and co n v icted Robertson of wire fraud.

B . The District Court Correctly Applied a Sentencing Enhancement for Sophisticated Means.

R o b ertso n contends that the district court erroneously applied a sentencing en h an cem en t for sophisticated means. He argues that he employed a simple s ch e m e in which he ordered items and did not pay. We disagree.

S ectio n 2F1.1(b)(5)(C) of the 1998 edition of the Guidelines provides a two le v e l enhancement if an offense of fraud "otherwise involved sophisticated m e an s ." U.S.S.G. § 2F1.1(b)(5)(C). The commentary explains that "`sophisticated m ean s' means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense." Id. § 2F1.1 cmt. n.15. For ex am p le, "[i]n a telemarketing scheme, locating the main office of the scheme in o n e jurisdiction but locating soliciting operations in another jurisdiction would o rd in arily indicate sophisticated means." Id. "Conduct such as hiding assets or tran sactio n s, or both, through the use of fictitious entities, corporate shells, or o ffsh o re bank accounts also ordinarily would indicate sophisticated means." Id.

T h e district court found that Robertson had employed "a rather clever and s o p h is tic ate d method of doing business," and we are not, in our review of that fin d in g , left with a definite and firm conviction that a mistake has been committed.

Robertson attempted to insulate himself by hiding behind false names, such as J am e s Turner or Jay McGhee, and several false addresses. He used fictional en tities to take advantage of discounted prices and switched entities every 30 days to circumvent the policy of Novell not to ship to customers that were more than 30 d a y s in arrears. The district court did not clearly err in finding that Robertson had u sed sophisticated means. C . The District Court Did Not Abuse Its Discretion When It Calculated the Restitution Owed Novell.

R o b e rts o n challenges the calculation of the amount of restitution owed N o v e ll. The district court calculated the restitution of $1,216,522 in two steps. It first computed the total wholesale price for all 378 of the fraudulently obtained and u n retu rn ed units of Netware. The district court then reduced that total by $ 1 2 5 ,0 0 0 , the amount Network Systems paid Novell to settle its civil suit.

R o b ertso n contests the decision of the district court to use the wholesale p r ic e as the restitution value for every unreturned unit of software. He argues that th e court should have used the wholesale market price only for the 239 unreturned u n its of Netware that the government proved he sold and the much lower m an u factu rin g replacement cost for the restitution value of the remaining 139 units th at he may or may not have sold. Robertson's argument fails.

A n order of restitution must require a defendant whose offense caused d am ag e to, loss of, or destruction of property of a victim of the offense to make restitu tio n by returning the property or paying the "value" of any unreturnable p ro p erty. See 18U.S.C. § 3663A(b)(1). If the defendant must pay, the amount sh all be the greater of the "value" of the unreturnable property on the date of sen ten cin g or on the date of the damage, loss, or destruction. Id.

§ 3663A(b)(1)(B)(i)(I), (II). The statute does not define the term "value," but we ad d ressed the question in United States v. Shugart.

W e explained in Shugart that value is "easy to determine" for "fungible c o m m o d itie s." 176 F.3d at 1375. It is "the actual cash value, or fair market value, o f the item--that is, `[t]he fair or reasonable cash price for which the property co u ld be sold in the market in the ordinary course of business.'" Id. (quoting B lack 's Law Dictionary 35 (6th ed. 1990)). But "[w]here actual cash value is d if fic u lt to ascertain--because an item is unique, or because there is not a broad an d active market for it--replacement cost may be a better measure of value." Id.

We review for abuse of discretion the choice by a district court between using m ark et price or replacement cost as the restitution value. Id.

T h ere is no dispute that the district court was correct to require Robertson to p ay for each of the 378 units of software he fraudulently obtained from Novell.

Nothing in the record suggests that any units of software were or could have been retu rn ed to Novell. The only question is whether the district court abused its d is cr etio n when it chose to use the wholesale market price as the value of each u n retu rn ed unit of Netware.

The district court did not abuse its discretion in its valuation of the units.

When Robertson fraudulently obtained the units of software from Novell, the units w ere fungible commodities, so their value, as explained in Shugart, was the fair m a rk e t price Novell would have received in the ordinary course of business. That p rice was either the wholesale price or the retail price, because Novell sold to both d is tr ib u to r s and end users. The district court chose the lower wholesale price, w h ich the government recommended with the acknowledgment that Robertson "w o u ld be grant[ed] . . . a benefit." See United States v. Susel, 429 F.3d 782, 784 ( 8 th Cir. 2005) (affirming restitution in the amount of retail value of stolen so ftw are). Robertson's complaint about that lenient break rings hollow.

W h eth er Robertson later sold the units of software is irrelevant. The value o f the units of software, as fungible commodities, was the fair cash price for which th e y "could be sold." Shugart, 176 F.3d at 1375 (emphasis added) (internal q u o ta tio n marks omitted). Each unit had its value even though it had not yet been s o ld . The later sale of a unit of software merely realized its value. Cf. United S tates v. Coviello, 225 F.3d 54, 64 (1st Cir. 2000) ("It does not matter . . . that [the d efen d an t's] sales might not have displaced $17 million worth of legitimate M ic ro s o f t product. What matters is that the stolen CD-ROMs contained in te lle ctu a l property that was worth between $10 million and $20 million if they h ad been sold legitimately.").

Confronted with our precedent, Robertson argues that the units of software w e re not fungible commodities but the sort of "unique" commodities we described in Shugart. He contends that the units were not fungible commodities because they w ere inexpensive to manufacture. We reject this baseless argument.

We also find inapposite Robertson's reliance on decisions of our sister c ir cu its that address restitution in the context of counterfeit goods. See United S tates v. Hudson, 483 F.3d 707 (10th Cir. 2007); United States v. Beydoun, 469 F .3 d 102 (5th Cir. 2006). He relies on those decisions for the principle that restitu tio n should be owed only for goods that the government proved were sold, b u t restitution to a legitimate seller for harm caused by counterfeit goods is not an alo g o u s to restitution to a seller for goods that were stolen through fraud. A leg itim ate seller is harmed by a counterfeit good only when that product enters the m a rk e t; a seller who is fraudulently deprived of his goods is harmed as soon as th o se goods are stolen.

D . Network Systems Was Not a Victim Entitled to Restitution Under the Restitution Act.

R o b e rts o n contends the district court erroneously determined that Network S y ste m s was a "victim" as defined under the Restitution Act. He argues that N etw o rk Systems was not "directly and proximately harmed as a result of the co m m issio n " of his offenses, 18U.S.C. § 3663A(a)(2), because the $125,000 loss to Network Systems was caused solely by the decision of Network Systems to b r e ac h its distributor agreement with Novell. We agree that Network Systems was n o t a victim under the Restitution Act.

T o be a "victim" under the Restitution Act, Network Systems must have su ffered a "harm that `directly and proximately' results from the commission of [ R o b e rts o n 's ] offense[s]." Washington, 434 F.3d at 1268. We have never defined th e phrase "directly and proximately," but we agree with the definitions that our sister circuits have adopted. "[T]he government must show not only that a p articu lar loss would not have occurred but for the conduct underlying the offense o f conviction, but also that the causal connection between the conduct and the loss is not too attenuated (either factually or temporally)." United States v. Cutter, 313 F .3 d 1, 7 (1st Cir. 2002) (internal quotation marks omitted). "Defendant's conduct n eed not be the sole cause of the loss, but any subsequent action that contributes to th e loss, such as an intervening cause, must be directly related to the defendant's co n d u ct. The causal chain may not extend so far, in terms of the facts or the time sp an , as to become unreasonable." United States v. Gamma Tech Indus., Inc., 265 F .3 d 917, 928 (9th Cir. 2001) (citations omitted); see also United States v. Donaby, 3 4 9 F.3d 1046, 1054 (7th Cir. 2003) ("victim" under the Restitution Act harmed by "lik ely and foreseeable outcome of the crime"). Consistent with these definitions, w e have affirmed that damage inflicted during the flight of a bank robber was harm th at "directly and proximately" resulted from the commission of the bank robbery. W ash in g to n , 434 F.3d at 1268-70.

It is clear that Robertson's fraud on Novell was a "but for" cause of the loss to Network Systems of $125,000, because the lawsuit that resulted in the loss was "r ela te d to the [fraudulently obtained units of] software." Although the record d o es not reveal the grounds for the lawsuit, there is no dispute that the lawsuit w o u ld not have occurred had Robertson not defrauded Novell. The question is w h eth er Robertson's fraud on Novell can be considered a proximate cause of the lo ss to Network Systems.

O n this issue, we review the district court for clear error. Whether a person o r entity was a victim is a legal conclusion we review de novo, United States v. De L a Fuente, 353 F.3d 766, 771 (9th Cir. 2003), but proximate cause is a factual fin d in g we review for clear error, see id. at 772; see also Am. Dredging Co. v. L am b ert, 153 F.3d 1292, 1295 (11th Cir. 1998); Lindsey v. Navistar Int'l Transp.

C o rp ., 150 F.3d 1307, 1317 (11th Cir. 1998).

Although the district court made no express finding that Robertson's fraud o n Novell proximately caused the loss suffered by Network Systems, we infer an im p lie d finding because that is consistent with the conclusion of the district court th at Network Systems was a victim. See United States v. $242,484.00, 389 F.3d 1 1 4 9 , 1154 (11th Cir. 2004). The evidence suggested several intervening events b etw een Robertson's fraud on Novell and the loss to Network Systems of $ 1 2 5 ,0 0 0 , including the lawsuit and settlement between Novell and Network S ystem s. We infer that the district court found the intervening events to be re as o n ab ly foreseeable consequences of and not too attenuated from Robertson's frau d .

T h e finding is clearly erroneous. "Our deference to the district court is not u n lim ite d , . . . and we will hold a finding of fact clearly erroneous if the record lack s substantial evidence to support it." Thelma C. Raley, Inc. v. Kleppe, 867 F .2 d 1326, 1328 (11th Cir. 1989). There is insufficient evidence to support this f in d in g .

T h e problem is that neither the grounds for the lawsuit between Novell and N etw o rk Systems nor the terms of the settlement are described in the record.

Whether the lawsuit and settlement were reasonably foreseeable consequences of R o b ertso n 's fraud on Novell depends on the nature of the litigation. Without any d e ta il about the basis for the lawsuit or the settlement, there is inadequate evidence to support a finding that the lawsuit and settlement between Novell and Network S y ste m s were reasonably foreseeable. It is not enough that the litigation was "related to" the units of software, because that vague description, without elab o ratio n , includes a broad universe of lawsuits. A t oral argument, the government contended that details about the lawsuit b etw een Novell and Network Systems were admitted at sentencing. It directed us to the unsworn victim impact statement that Michael Oken, the owner of Network S ystem s, gave orally at the sentencing hearing over the objection of Robertson, w h o argued that the district court had not yet concluded that Network Systems was a victim. We reviewed this aspect of the record, but found it wanting.

T h e statement of Oken provides few details and none that alter our analysis.

Oken made an opaque reference to "[t]he Lanham Act," mentioned that Novell "w en t after [him] personally," and asserted that the loss to Network Systems "stem [m ed ] from the fraud that Mr. Robertson committed." These sparse details a re still insufficient to support a finding that the lawsuit and settlement between N o v ell and Network Systems were reasonably foreseeable consequences of R o b ertso n 's fraud.

Because it was clear error to find that Robertson's fraud on Novell p ro x im ately caused the loss to Network Systems, the district court erred in co n clu d in g that Network Systems was a victim under the Restitution Act.

Robertson should not have been ordered to make restitution to Network Systems.

We do not adopt Robertson's position that Network Systems was the sole cause of its loss of $125,000, but we agree that Network Systems was not a victim. T h e government argues in the alternative that Network Systems was entitled to restitution under a statutory provision that provides restitution to insurers. 18 U .S .C . § 3664(j)(1). That provision states that, "[i]f a victim has received c o m p e n s a tio n from insurance or any other source with respect to a loss, the court sh all order that restitution be paid to the person who provided or is obligated to p ro v id e the compensation." Id. The government contends that Network Systems c o m p e n s a te d Novell in part for its lost units of software, because the district court red u ced the restitution to Novell by the $125,000 that Network Systems paid N o v ell to settle. This argument fails.

Section 3664(j)(1) does not apply because the district court did not find that N etw o rk Systems paid Novell to compensate it for its lost units of software, nor is th ere any evidence in the record to support such a finding. As discussed above, the reco rd lacks any detail regarding the basis for the lawsuit between Novell and N etw o rk Systems or the terms of their settlement. We reject the argument of the g o v ern m en t that Network Systems is entitled to restitution simply because the d is tr ic t court chose, with no explanation, to reduce the restitution to Novell by an am o u n t of money Network Systems once paid to Novell.

IV . CONCLUSION R o b ertso n 's convictions on counts 5 and 13, the application of a sentencing e n h a n c e m e n t for sophisticated means, and the order of restitution to Novell are A F F IR M E D . The order of restitution to Network Systems is VACATED.

* Honorable Arthur L. Alarcon, United States Circuit Judge for the Ninth Circuit, sitting by designation.