United States v. Joseph Cammarata
(3d Cir. 2025) – Commentary

Introduction

This Third Circuit decision grows out of a spectacular fraud perpetrated against hundreds of securities-class-action settlement funds. Joseph Cammarata and two partners used a “claims aggregator” (Alpha Plus Recovery) to submit fabricated claims on behalf of shell companies, siphoning over $40 million in settlement proceeds. While the co-conspirators pleaded guilty, Cammarata went to trial and was convicted of conspiracy, wire fraud, and money-laundering counts. On appeal he attacked virtually every phase of the prosecution—indictment theory, evidentiary rulings, loss calculation, restitution, and forfeiture.

The Court largely affirmed but took the unusual step of partially vacating the forfeiture order, and it produced two doctrinally important holdings:

1. “Victim” under the Mandatory Victims Restitution Act (MVRA) can be the certified class itself—not the settlement fund or the claims administrator—because a certified Rule 23 class possesses independent legal status.
2. Even when a restitution order is underinclusive and contravenes the MVRA’s “full restitution” mandate, an appellate court may not enlarge that award absent a Government cross-appeal, per Greenlaw v. United States.

Summary of the Judgment

• Constructive Amendment: No amendment occurred; evidence and summation stayed within the four corners of the superseding indictment.
• Evidentiary Rulings: Questions about a private-island purchase and unreported income from tax returns were upheld under Rules 403/404(b); evidence was intrinsic and probative of motive and intent.
• Loss Calculation: The full $40.86 million paid on fraudulent claims was “actual loss” because each fraudulent dollar necessarily diluted pro-rata distributions to legitimate class members.
• Restitution: District court should have ordered full restitution to every victim class, but the panel affirmed the underinclusive $31.27 million award because the Government did not cross-appeal (Greenlaw bar).
• Forfeiture: Money judgment affirmed; forfeiture of the Poconos vacation home vacated in part and remanded so the Government can seek it as substitute property under 21 U.S.C. § 853(p).

Detailed Analysis

1. Precedents Cited and Their Influence

• Eubank v. Pella Corp. – cited for Judge Posner’s praise of the class-action device, setting the thematic stage.
• Wachtel v. Guardian Life & Fisher v. FedEx – underscore that a certified class is an entity with independent legal status, crucial to defining MVRA “victim.”
• Greenlaw v. United States – key limitation on appellate power: cannot enhance a criminal sentence (inc. restitution) for Government’s benefit absent its cross-appeal.
• McIntosh v. United States (2024) – clarifies that Rule 32.2 forfeiture deadlines are “time-related directives”; error triggers harmless-error, not automatic reversal.
• Banks, Free, Shah – loss-calculation jurisprudence; reaffirm that “actual loss” equals reasonably foreseeable pecuniary harm.
• Syme, Castro – constructive-amendment framework.

2. Legal Reasoning

1. Constructive-Amendment Claim Rejected
   The Court compared the indictment’s class-member requirements (“purchase + damages”) with trial evidence; testimony by settlement-administrator witnesses was consistent with those elements. Government’s closing merely rebutted Cammarata’s “assignment” defense rather than broadening the theory.
2. Evidentiary Rulings
   • Island purchase: Cammarata opened the door by claiming he “didn’t need money.” High probative value (motive), minimal incremental prejudice.
   • Tax returns: Intrinsic evidence of concealment, not “other-acts” under Rule 404(b); probative value outweighed any confusion.
3. Loss and Sentencing
   Fraudulent submissions drained finite settlement pools; every legitimate class member’s share shrank. Therefore the entire $40 M was “actual loss” and foreseeable. This triggered a 22-level increase under § 2B1.1.
4. Restitution
   • Who is the victim? Applying class-action doctrine, the Court held that the classes (not the funds or administrators) are “persons” directly harmed under § 3663A(a)(2).
   • Distribution Mechanics: Reliance on existing claims-administrators is permissible; like appointing a receiver (§ 3663A(c)(3) not triggered).
   • Underinclusive Award: MVRA demands full restitution, but because the Government itself proposed the lower figure and did not cross-appeal, Greenlaw prevented the panel from remanding to enlarge the award.
5. Forfeiture
   • Notice adequate; Government did not knowingly waive property forfeiture.
   • But Cammarata wrongly denied Rule 32.2(b)(5)(A) jury determination on the vacation home’s traceability; harmless error because property would be forfeitable as a substitute asset.
   • Remedy: partial vacatur and remand to amend order under Rule 32.2(e) & § 853(p).

3. Potential Impact of the Decision

• Class-Action Settlements: Affirms that a certified class is a single “victim” for MVRA purposes, simplifying restitution in large-scale settlement frauds.
• Claims Administrators’ Role: Endorses courts’ ability to delegate restitution distribution to settlement administrators—crucial for efficiency in multi-million-member classes.
• Loss Calculation in Dilution-Type Frauds: Establishes that fraudulent dilution of a finite fund constitutes actual loss equal to the siphoned amount.
• Circuit Guidance on Greenlaw: Warns defense and prosecution alike—failure to cross-appeal bars appellate increases even when the district court under-scrutinized the MVRA’s “full restitution” command.
• Forfeiture Practice: Clarifies post-McIntosh that missed jury-right under Rule 32.2 can be salvaged through substitute-asset provisions on remand.

Complex Concepts Simplified

Claims Aggregator

A private firm that bundles many small class-member claims and files them en masse, taking a cut of any recovery.

Certified Class vs. Class Members

Once a Rule 23 class is certified, it becomes a juridical entity. Individuals are bound by the class’s actions but lose individual party status except to opt-out or object.

MVRA Victim

Any “person” directly and proximately harmed. “Person” includes legal entities such as corporations—or here, a class.

Constructive Amendment

Occurs when trial proof or jury instructions permit conviction on a theory not charged by the grand jury, violating the Fifth Amendment.

Substitute Property (§ 853(p))

If tainted proceeds are unavailable, the court may order forfeiture of untainted assets up to the same value.

Conclusion

United States v. Cammarata cements two critical propositions in federal criminal practice. First, when settlement-fund fraud strikes multiple securities class actions, the certified classes themselves are the “victims” for MVRA restitution, and courts may employ claims administrators to effectuate payment. Second, despite the MVRA’s uncompromising command of full restitution, an appellate court may not enlarge an underinclusive award unless the Government has preserved the issue via cross-appeal—a direct application of Greenlaw. The decision therefore delivers both a victim-centric expansion of restitution doctrine and a cautionary procedural tale for prosecutors contemplating appellate strategy. At the same time, its forfeiture holding illustrates the flexibility—yet rigor—of Rule 32.2: missed procedural steps can be cured, but only through the statutorily prescribed substitute-asset route. Going forward, class-action stakeholders, claims aggregators, prosecutors, and sentencing courts alike must heed the doctrinal signposts planted by the Third Circuit in this precedential opinion.