Excluding Medically Necessary Claims from MVRA Restitution and Constraining Apportionment by Plea Agreement: Commentary on United States v. Clay

I. Introduction

In United States v. Kevin Clay, Nos. 23‑3923/24‑3038 (6th Cir. Dec. 19, 2025), the Sixth Circuit issued a published opinion that leaves Clay’s healthcare-fraud and tax-false-statement convictions intact but significantly reshapes the restitution component of the case. The decision has particular importance for:

how “loss” is defined under the Mandatory Victims Restitution Act (MVRA) in healthcare fraud cases, especially where some claims are medically necessary;
how restitution may (and may not) be apportioned among multiple defendants under 18 U.S.C. § 3664(h);
what evidentiary showing is required to support restitution orders to the IRS;
the limits on using “acquitted conduct” as a basis for restitution.

The court also addresses, but ultimately declines to disturb, jury instructions on healthcare fraud mens rea and fraud by omission, and it remands for clarification of a leadership-role sentencing enhancement.

Clay, co-founder of Theramedical, orchestrated a lucrative compounded-cream prescription scheme centered on Jeep plant employees covered by a self-insured Fiat Chrysler health plan. The scheme involved steering patients to a compliant doctor and pharmacy, paying “commissions” to patients out of insurance reimbursements, and subsequently using a purported public charity to reduce Clay’s tax burden while misusing its funds.

After a jury trial, Clay was convicted of:

conspiracy to commit healthcare fraud (18 U.S.C. § 1349);
substantive healthcare fraud (18 U.S.C. §§ 1347, 2);
making a false statement to the IRS regarding the Clay Foundation’s status as a public charity (26 U.S.C. § 7206(1)).

He was acquitted of a separate § 7206(1) count relating to misstatement of his 2014 taxable income. The district court sentenced him to 51 months’ imprisonment and imposed restitution of:

$6,443,815 to Fiat Chrysler (healthcare fraud);
$403,481.46 to the IRS (tax-related losses).

On appeal, Clay challenged both convictions and restitution. The Sixth Circuit:

affirmed the convictions and overall sentence structure;
vacated the restitution orders to Fiat Chrysler and the IRS; and
remanded for:
- recalculation of restitution to Fiat Chrysler under the MVRA;
- recalculation (or re-justification) of any restitution to the IRS under the VWPA framework applied through supervised release;
- reconsideration or explanation of the leader/organizer enhancement under U.S.S.G. § 3B1.1(a).

II. Summary of the Opinion

A. Convictions and Trial Errors

Clay raised three main sets of trial challenges:

Mens rea jury instruction for healthcare fraud (§ 1347) – The trial court instructed that an act is done “knowingly and willfully” if done “voluntarily and intentionally, and not because of mistake or some other innocent reason.” After United States v. Singh, 147 F.4th 652 (6th Cir. 2025), this instruction is incomplete because § 1347 “willfulness” requires knowledge that the conduct is unlawful. The panel assumed a plain error in light of Singh but declined to reverse under the fourth prong of plain error review, emphasizing the high bar and Clay’s invited error (he had stipulated to the instruction).
Omissions/concealment instructions – The trial court instructed that “false or fraudulent pretenses, representations, or promises” include “the knowing concealment of material facts,” and that the jury could consider “false or fraudulent omissions.” Clay argued the court effectively allowed conviction on an omission theory without a duty to disclose. The panel held that, given its earlier case United States v. Bertram, 900 F.3d 743 (6th Cir. 2018), and its reading in United States v. Montgomery (2022 WL 2284387), any error was not “plain,” and therefore no relief was available on plain-error review.
Agent Marciniak’s lay testimony – Clay asserted that several portions of an IRS agent’s lay testimony violated Rules 401, 403, 404, 701, and 802 and that the trial court plainly erred by not striking them sua sponte. The court held (a) the standard for sua sponte exclusion is extremely high, (b) much of the testimony was cumulative of other, unchallenged testimony, and (c) Clay failed to show any effect on his substantial rights.

Collectively, these issues did not warrant reversal of the convictions. The panel stressed the independent force of the fourth prong of plain-error review and the particular weight of invited error.

B. Restitution to Fiat Chrysler (MVRA)

The district court had initially found that some of the compounded cream prescriptions were medically necessary but nonetheless included all claims in the restitution amount, reasoning that any payment “procured by kickbacks” is subject to restitution, whether medically necessary or not. The court then set total loss to Fiat Chrysler at $7,159,795 and, because co-defendant Maluchnik’s plea agreement capped his share at 10%, ordered Clay to pay the remaining 90% ($6,443,815).

The Sixth Circuit vacated this order on two independent grounds:

Scope of “loss” under the MVRA – The MVRA allows restitution only for the victim’s actual losses. Medically necessary prescriptions that Fiat Chrysler’s plan would have paid regardless of the fraud are not “losses” caused by Clay’s conduct. Including them inflated restitution beyond the compensable loss.
Improper apportionment under § 3664(h) – Having chosen apportionment rather than joint-and-several liability, the district court was obligated to apportion based on each defendant’s relative contribution to the loss and economic circumstances. Instead, it simply used Maluchnik’s plea agreement (10% cap) as the basis to impose 90% on Clay, without findings on relative culpability or financial circumstances. This was legal error under § 3664(h).

C. Restitution to the IRS

The court vacated the $403,481.46 restitution order to the IRS for two reasons:

Insufficient evidentiary support – The PSR reported an IRS loss figure supposedly based on IRS calculations, but the record contained no explanation of how that number was derived. The government merely stated it “believes” the PSR calculations were correct. This bare assertion did not satisfy the government’s burden to prove loss by a preponderance of the evidence with information bearing “sufficient indicia of reliability.”
Improper inclusion of acquitted conduct beyond the charged scheme – A significant portion ($266,466) of the IRS “loss” was attributable to the tax-return charge on which Clay was acquitted (count three, 2014 income). Under 18 U.S.C. § 3663(a)(2) and United States v. Jones, 641 F.3d 706 (6th Cir. 2011), restitution for a “scheme” offense can include losses caused by related acquitted conduct only if that conduct is part of the same “scheme, conspiracy, or pattern” charged and proven. The indictment framed the scheme as healthcare fraud against insurers; it did not define the IRS’s tax loss as part of that same scheme. Thus, the IRS, as to count three, was not a “victim” of the healthcare fraud conspiracy, and using that acquitted conduct as a restitution basis was unlawful.

D. Leadership Enhancement (U.S.S.G. § 3B1.1(a))

Clay challenged a four-level enhancement for being an organizer or leader of a criminal activity involving five or more participants, arguing that the district court did not articulate its factual basis. The record showed:

the PSR recommended the enhancement;
Clay objected in his sentencing memorandum;
at sentencing the court adopted the PSR generally, then specifically asked the government to justify the enhancement;
the court never clearly explained what factual findings supported the enhancement.

Given this ambiguity, and since a remand was already necessary for restitution, the panel remanded for the district court to either explain the factual basis for the leadership enhancement or reconsider it.

III. Analysis of Key Legal Issues

A. Mens Rea for Healthcare Fraud and Invited Error

1. The Singh standard for “willfulness” under § 1347

While Clay’s case was on appeal, the Sixth Circuit issued United States v. Singh, 147 F.4th 652 (6th Cir. 2025), clarifying the mens rea for healthcare fraud under 18 U.S.C. § 1347:

“Knowingly” means that the defendant knew the facts constituting the offense (e.g., that he was submitting claims, that prescriptions were medically unnecessary or tainted by kickbacks).
“Willfully” means that the defendant acted with knowledge that his conduct was unlawful; he need not know the specific statute number but must know that what he is doing is illegal.

In Clay’s trial, the instruction defined “knowingly and willfully” only as acting “voluntarily and intentionally, and not because of mistake or some other innocent reason”—a formulation that omits the requirement of knowledge of unlawfulness.

2. Plain-error review and the fourth prong

Because Clay stipulated to this instruction at trial, the panel treated the issue under the invited-error doctrine and plain-error review:

Error – After Singh, the instruction is erroneous; “willfully” must incorporate knowledge of unlawfulness.
Plainness – Under Henderson v. United States, 568 U.S. 266 (2013), plainness is assessed at the time of appeal. In light of Singh, the error is now “plain.”
Substantial rights – The panel treated this as a close question. Clay testified he “never thought [the scheme] was wrong,” invoked his prior experience with rebates and commissions, and pointed to his reliance on a licensed pharmacist. On the other hand, the government presented strong evidence suggesting Clay understood the illegality (testing the scheme with unnecessary prescriptions, using fictitious names to recruit “sales reps,” being rebuffed by other pharmacies uncomfortable with paying patients for their own prescriptions, etc.).
Fourth prong (fairness, integrity, public reputation) – The panel ultimately rested its decision here, holding that even assuming the first three prongs were met, this was not the “rare and egregious” case warranting correction of a forfeited and invited error. The court emphasized:
- the very high bar for fourth-prong relief (Olano, Rogers, and circuit cases characterizing it as reserved for errors that “shock the conscience” or indict the integrity of the justice system);
- the systemic concern that allowing parties to stipulate to instructions and then undo the result on appeal would undermine the adversarial process (Akridge, Harvis).

Doctrinally, this portion of the opinion is less about § 1347 than about the independent force of the fourth prong of plain error—particularly when the defendant invited the error. It signals that even serious instructional defects in mens rea may not be corrected on appeal where the defendant actively participated in crafting the instruction and the evidence of culpability is strong.

B. Fraud by Omission under § 1347 and the Duty to Disclose

1. The instructions and Clay’s argument

Section 1347 punishes obtaining money or property from a healthcare benefit program “by means of false or fraudulent pretenses, representations, or promises.” The trial court instructed that:

“false or fraudulent pretenses, representations, or promises” include “the knowing concealment of material facts”;
the jury could convict if Clay “deliberately ignored a high probability that the reimbursed claims for compounding creams were obtained by false or fraudulent omissions.”

Clay contended these instructions allowed conviction based on nondisclosure alone, without any duty to disclose, which he argued is legally insufficient to constitute fraud.

2. Bertram and Montgomery: ambiguous but controlling

The panel framed the question under the second prong of plain-error review: was any error “obvious or clear”? It answered “no” based on:

United States v. Bertram, 900 F.3d 743 (6th Cir. 2018) – Defendants billed for urinalysis tests run far outside the usual timeframe. The court held that “knowing concealment of material facts” sufficed under § 1347 because “omissions of material fact constitute a scheme to defraud,” and it rejected the argument that the absence of a specific question on claim forms about timeliness defeated fraud. The court did not expressly mention a duty to disclose.
United States v. Montgomery, 2022 WL 2284387 (6th Cir. June 23, 2022) – Interpreted Bertram as holding that “a defendant can be guilty of fraud through the concealment of material information in the absence of a positive legal duty to disclose that information.”

The panel acknowledged that Bertram is textually ambiguous: it could be read either as:

tacitly presuming an implicit duty to disclose due to industry expectations, or
approving fraud liability for omissions even in the absence of any independent disclosure duty.

But because the Sixth Circuit itself had already read Bertram in the broader, no-duty-required sense in Montgomery, the supposed error in Clay’s case could not be “plain.” There was no binding precedent “demonstrating the trial court’s error,” which alone is fatal under plain-error review (Al‑Maliki, Henning).

Practically, while the court stops short of definitively resolving whether a duty to disclose is an element of omission-based § 1347 fraud, it strongly signals that, at least as of 2025, district courts in the Sixth Circuit are safe in instructing juries that knowing concealment of material facts can constitute healthcare fraud without separately charging a duty-to-disclose element.

C. Agent Marciniak’s Testimony and Sua Sponte Exclusion

Clay identified six segments of the agent’s lay testimony (e.g., characterizations of Clay and his partner as “big wannabe successful business owners” running “schemes,” insinuations they might be “lovers,” and comments on a doctor’s drinking) as inadmissible under various evidentiary rules. He did not object at trial, so the question on appeal was whether the district court plainly erred in not stepping in on its own motion.

The court emphasized:

sua sponte striking or curative instructions are reserved for rare cases because they risk highlighting prejudicial material (Byers, Deandrade, Copeland, Stokes);
in plain-error review, the central focus is whether there is a “reasonable probability” of a different outcome (Marcus).

Comparing the challenged statements with other, uncontested evidence (testimony about multiple joint business ventures, close friendship, incriminating admissions from co-defendant Maluchnik, and the overwhelming evidence of the scheme), the court found:

most contested remarks were cumulative of stronger, unchallenged testimony;
the “lovers” remark was improper but fleeting and insignificant compared to more probative, damaging evidence; and
no reasonable probability that any of these statements affected the verdict.

This part of the opinion reinforces the already stringent standard for overturning convictions based on unobjected-to lay opinion or character-laden testimony.

D. Restitution to Fiat Chrysler: Medically Necessary Claims and § 3664(h)

1. Medically necessary claims are not “loss” under the MVRA

The core restitution holding in Clay is that medically necessary claims cannot be counted as “loss” for MVRA purposes, even if they were generated or paid under a fraudulent arrangement involving kickbacks.

a. Statutory text: § 3663A(b)(1) and § 3664

The MVRA requires the court to order restitution equal to:

“the value of the property on the date of the damage, loss, or destruction less the value (as of the date the property is returned) of any part of the property that is returned.”
– 18 U.S.C. § 3663A(b)(1)

Section 3664 reinforces that restitution must match “the full amount of each victim’s losses,” and speaks consistently in terms of the victim’s “loss” (not the defendant’s gain).

From this, the court reasons:

Restitution is remedial, not punitive; its purpose is to restore the victim to the status quo ante (Hughey).
If Fiat Chrysler’s self-insured plan would have paid for medically necessary creams absent the fraud, then payment of those claims is not a loss caused by the offense.
Including such claims yields a windfall, which the MVRA does not authorize (Bane, White, Boring).

b. Alignment with sentencing “loss” decisions

The Sixth Circuit’s Guidelines cases on healthcare fraud are consistent:

United States v. Mehmood, 742 F. App’x 928 (6th Cir. 2018) – The court vacated a loss calculation where the district court reasoned that no claims were legitimate because Medicaid would not have paid had it known of the fraud. The appellate court held that under U.S.S.G. § 2B1.1, total billings are only prima facie evidence of intended loss, and the value of legitimate claims “must be offset” if established.
United States v. Montgomery and United States v. Bryant – Both recognize that legitimately billed claims should be excluded from loss calculations.

Although Guidelines “loss” and MVRA “actual loss” need not always be identical (Agrawal, Dadyan), the court finds no textual basis for treating legitimate claims as losses under the MVRA when they are not losses under the Guidelines.

Doctrinal effect: The opinion firmly rejects a “taint” theory under which any payment made in the context of a fraudulent or kickback-tainted scheme is automatically a compensable “loss.” Instead, courts in the Sixth Circuit must:

identify which claims were illegitimate (e.g., medically unnecessary, falsely represented, or not provided as billed), and
exclude medically necessary or otherwise legitimate claims from the MVRA restitution figure, even if tainted by a kickback arrangement.

2. Apportionment under § 3664(h) and the limits of plea agreements

Section 3664(h) provides two distinct paths when multiple defendants cause a victim’s loss:

Joint and several liability – each defendant may be made liable for the full amount of restitution; or
Apportionment – the court “may apportion liability among the defendants to reflect the level of contribution to the victim’s loss and the economic circumstances of each defendant.”

The district court expressly chose apportionment but then assigned Clay 90% of restitution and Maluchnik 10% solely because Maluchnik’s plea agreement promised he would be responsible for 10%. It made no findings on:

each defendant’s relative contribution to Fiat Chrysler’s loss; or
their respective economic circumstances.

The Sixth Circuit held this was error for two reasons:

Textual violation of § 3664(h) – Once a court chooses apportionment, it must follow the statute’s criteria; it cannot let the terms of a plea agreement override statutory instructions. The opinion relies on Bailey and Bogart and distinguishes Williams, which addressed estoppel rather than statutory interpretation.
MVRA’s independence from plea agreements – Citing Williams, the court stresses that the MVRA “applies regardless of any plea agreement” and, unlike § 3663, does not simply allow restitution “to the extent agreed” by the parties. A plea agreement cannot predetermine another defendant’s liability share.

The government argued that any error was harmless because the court could have imposed joint-and-several liability for 100% of the loss on Clay alone. The panel rejected this parsing:

If Clay had been made jointly and severally liable for the full amount, he could pursue contribution from co-defendants (Yalincak, Borino).
By labeling the order an apportionment but assigning Clay 90% and leaving others at 10% or zero, the court effectively precluded such contribution while ignoring the statutory metrics.
Hybrid orders—where the most culpable defendant is liable for the full amount and less culpable defendants for portions—are permissible only if they still reflect relative contribution and economic circumstances. A “hybrid” in which Clay alone is effectively on the hook for nearly everything, based solely on a co-defendant’s plea bargain, would not meet this standard.

Practical takeaway: In multi-defendant fraud cases within the Sixth Circuit:

courts must consciously choose between joint-and-several liability and apportionment;
if they choose apportionment, they must make explicit or implicit findings on each defendant’s relative participation and financial condition;
plea agreements cannot serve as a shortcut to set another defendant’s restitution share.

E. Restitution to the IRS: Proof and Acquitted Conduct

1. Evidentiary standard for determining IRS loss

Restitution to the IRS was imposed as a condition of supervised release under 18 U.S.C. §§ 3563(b)(2), 3583(d), but must conform to the Victim and Witness Protection Act (VWPA), 18 U.S.C. § 3663 (Butler).

Where the defendant disputes the amount of loss, the government must prove the amount by a preponderance of the evidence and support it with information bearing “sufficient indicia of reliability.” The court found:

the PSR reported an IRS figure derived from unspecified “calculations” by the IRS;
the government merely endorsed the PSR without providing the underlying methodology, documentation, or testimony explaining how the figure was computed;
Clay specifically contested the amount and pointed to trial testimony supporting a much smaller figure (around $35,000).

This record did not satisfy the government’s burden. The court aligned with other circuits rejecting victim loss figures supported only by bare one-page summaries or invoices (Waknine, Menza). The IRS’s unelaborated number, standing alone, was not enough.

Doctrinal implication: Even for a governmental victim like the IRS, courts in the Sixth Circuit may not simply “plug in” an agency’s asserted loss figure from a PSR. Some explanation of derivation—through testimony, documentation, or other reliable evidence—is required.

2. Limits on using acquitted conduct: the “scheme” boundary

The court also addressed the legality of basing restitution on acquitted conduct when the offense of conviction includes a “scheme” element.

Under 18 U.S.C. § 3663(a)(2):

For an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, a “victim” includes any person directly harmed by the defendant’s conduct in the course of that scheme, conspiracy, or pattern.

The Sixth Circuit has held that restitution may include losses from acquitted conduct if that conduct is part of the same scheme as the conduct of conviction (Jones, Fike).

In Clay’s case:

Count 1 (conspiracy) and Count 2 (substantive healthcare fraud) defined the scheme narrowly: causing insurers to issue reimbursements for medically unnecessary compounded medications, taking a percentage of reimbursements, and failing to disclose that “patients” were being paid commissions.
The victims of that scheme were healthcare companies and employer health benefit plans, not the IRS.
Count 3 (acquitted) charged a false statement on Clay’s 2014 personal tax return. It did not reference the healthcare fraud counts or incorporate their scheme language.

The IRS could be a restitution “victim” only if its tax loss arose “in the course of” the healthcare-fraud scheme charged in counts 1 and 2. The indictment, however, made no such connection. It alleged a separate criminal episode: lying on a tax return.

The government argued that Clay’s tax understatements and his healthcare fraud had a common goal—“unlawfully enrich” himself—and thus were part of the same scheme. The Sixth Circuit rejected this conflation, noting that the statute and Jones require that the acquitted conduct be part of “the precise scheme that was an element of the defendant’s convicted offense,” not merely that both acts furthered a general desire for money.

Accordingly:

the IRS is not a “victim” of Clay’s healthcare fraud conspiracy within the meaning of § 3663(a)(2);
losses relating to Count 3 (the acquitted tax-return count) cannot be used to support restitution under the healthcare-fraud scheme of counts 1 and 2.

Impact: The decision reinforces a sharp boundary on using acquitted conduct in restitution calculations: it is permitted only where the indictment and proof show that the acquitted conduct occurred within the same, defined scheme as the convicted offense. A mere thematic link (“enriching oneself”) is insufficient.

F. Leadership Enhancement and the Need for a Clear Factual Basis

Under U.S.S.G. § 3B1.1(a), a four-level enhancement applies if:

the defendant was an organizer or leader of criminal activity; and
the activity involved five or more participants or was otherwise extensive.

A “participant” must be criminally responsible, though not necessarily convicted, and a leadership role requires actual control or authority over at least one participant (Gort‑Didonato).

The record suggested multiple potentially criminally responsible actors (Clay, Maluchnik, Peace, Dr. Huenefeld, and others), but the district court never clearly articulated:

who qualified as a “participant”; and
over whom, specifically, Clay exercised leadership or control.

Given:

the unclear interplay between the PSR’s recommendation, Clay’s written objection, and the government’s oral justification; and
the already-necessary remand for restitution issues,

the panel remanded for the district court to clarify its factual findings or reconsider the enhancement. It declined to decide de novo whether the record could support the enhancement, deferring to the district court’s superior capacity for fact-finding (Buford).

IV. Complex Concepts Simplified

A. MVRA vs. VWPA and Restitution Frameworks

MVRA (Mandatory Victims Restitution Act), 18 U.S.C. § 3663A – Applies to certain crimes (including many fraud offenses). Restitution is mandatory, and the court must order payment of the full amount of the victim’s losses regardless of the defendant’s ability to pay (though ability affects payment schedule).
VWPA (Victim and Witness Protection Act), 18 U.S.C. § 3663 – More discretionary. It allows restitution in other cases and includes similar “scheme” language for defining victims but is not mandatory.
Supervised-release restitution – When restitution is imposed as a condition of supervised release (as with the IRS here), it must still comply with the substantive limitations of the VWPA (and, by extension, with scheme/victim definitions and loss principles).

B. Joint and Several Liability vs. Apportionment

Joint and several liability – Each defendant is independently liable for the full restitution amount. The victim may collect the total from any one defendant, but defendants may seek contribution from one another.
Apportionment (§ 3664(h)) – The court assigns each defendant a specific share based on:
- their relative contribution to the loss; and
- their economic circumstances.
Defendants are not jointly liable beyond their share.
Hybrid orders – In some circuits, courts have approved orders that are joint-and-several as to one or more defendants while apportioning among others, provided the statutory criteria are still respected.

C. Plain Error and Invited Error

Plain error (Rule 52(b), Olano) – Appellate courts may correct errors not objected to at trial only if:
1. there is an error;
2. the error is plain (obvious under current law);
3. the error affects substantial rights (likely affected the outcome); and
4. the error seriously affects the fairness, integrity, or public reputation of judicial proceedings.
Invited error – When a party actively induces or stipulates to a particular error (e.g., agreeing to a jury instruction), appellate review is even narrower; courts are particularly reluctant to grant relief because doing so would reward “sandbagging” and undermine the adversarial system.

D. “Scheme” Offenses and Acquitted Conduct in Restitution

A “scheme” offense (like mail, wire, or healthcare fraud) includes a scheme or pattern as an element.
For such offenses, restitution may extend to all losses directly caused by the scheme, even if particular acts within the scheme did not result in conviction.
However, the “scheme” is defined by the indictment and the elements of the offense; restitution cannot include losses from entirely separate conduct (such as a different crime committed at a different time) unless that conduct falls within the same scheme.
Acquitted conduct, therefore, can be used for restitution only if it is clearly part of the same charged scheme, not simply because it shares a general motive or theme.

V. Impact and Future Implications

A. Healthcare Fraud Prosecutions and Restitution

The decision will likely affect how the government and district courts approach loss and restitution in healthcare fraud:

Loss calculations must separate legitimate from illegitimate claims – Prosecutors will need to present evidence distinguishing:
- medically unnecessary or non-provided services; and
- medically necessary services incidentally tied to a fraudulent billing or kickback arrangement.
Restitution cannot be inflated based on “taint” alone – Courts may no longer accept “all-claims-are-tainted” theories to justify broad restitution awards, at least where evidence shows that some services were genuinely needed and otherwise reimbursable.

B. Multi-Defendant Restitution and Plea Bargaining

Clay sends a cautionary signal to prosecutors and district judges about relying on plea agreements to allocate restitution:

Negotiated caps or percentages in plea deals cannot automatically dictate co-defendants’ restitution shares.
When apportioning under § 3664(h), courts must independently assess each defendant’s role and financial condition.
This may affect how prosecutors draft plea agreements, likely emphasizing that negotiated shares are not binding on the court as to other defendants.

C. IRS Restitution and Proof of Tax Loss

The court’s insistence on evidentiary support for IRS loss figures means:

PSRs must either describe in some detail how tax loss was computed or be supplemented by testimony or documentation;
defendants have an incentive to contest bare numbers, forcing the government to explain its methodology;
courts must resist treating the IRS’s assertion as self-proving, even in relatively small or straightforward cases.

D. Acquitted Conduct and the Scope of the Indictment

The opinion reinforces the importance of careful indictment drafting:

If the government wants restitution for a broader set of harms (e.g., both healthcare fraud and related tax fraud), it should consider structuring the indictment to define a scheme broad enough to encompass all relevant conduct, subject to proof.
Conversely, a narrowly framed scheme limits who qualifies as a “victim” and which losses can be included in restitution.

E. Appellate Practice: Preservation, Invited Error, and Plain Error

Finally, Clay underscores:

the risks of stipulating to jury instructions that later prove legally deficient;
the difficulty of obtaining relief under the fourth prong of plain error, especially when the defendant invited the error and the government’s evidence is substantial;
the importance of making timely, specific objections to evidentiary and sentencing issues, including restitution amounts, during the PSR and sentencing process.

VI. Conclusion

United States v. Clay leaves undisturbed the jury’s assessment that Clay knowingly engaged in a fraudulent compounded-cream scheme and made a false statement regarding his charitable foundation. But it meaningfully recalibrates the financial consequences of his crimes by demanding:

that MVRA restitution be limited to actual losses, excluding medically necessary claims that the victim insurer would have paid regardless of the fraud;
that restitution apportionment under § 3664(h) reflect statutory criteria, not simply plea-bargain percentages;
that IRS restitution be supported by reliable, explained evidence rather than unexplained agency figures;
that restitution for “scheme” offenses not be based on acquitted conduct outside the scope of the charged scheme.

At the same time, the decision solidifies the Sixth Circuit’s rigorous approach to plain-error and invited-error review, and it highlights the necessity of clear factual findings to support role-in-the-offense enhancements.

As healthcare fraud and related tax prosecutions remain a significant part of federal criminal dockets, Clay will function as a key precedent in the Sixth Circuit on how far restitution can reach, how it must be structured among multiple defendants, and how carefully courts and prosecutors must distinguish between genuine victim losses and mere financial flows associated with criminal conduct.