In March 2012, an aircraft pilot falsely reported observing a fishing boat with four passengers in distress in Lake Erie.  In response to the distress call, the U. S. Coast Guard and the Canadian Armed Forces launched a massive search and rescue mission that lasted over 21 hours.  Substantial costs were incurred by both agencies totaling over a half a million dollars.  During a subsequent investigation, the pilot admitted to the Coast Guard that his report of a boat in distress was fabricated.

The pilot was indicted and later pled guilty to making a false distress call, a felony under 14 USC §88.  In addition to a three month prison term and three years supervised release, the pilot was ordered to pay restitution to the U. S. Coast Guard and the Canadian Armed Forces to the full extent of the expenses they incurred in the search and rescue mission.

Following the formal sentencing, the pilot appealed the assessment of “indirect costs,” such as general overhead that would have been incurred by the Coast Guard irrespective of its response to the false distress report.  He argued that such ordinary expenses were not “losses” contemplated by 14 USC §88(c).  He did not contest his liability for the cost directly attributed to his criminal actions, which included the actual expenses attributable solely to search and rescue efforts.

With little guidance from prior case law on this issue, the U. S. Court of Appeals for the 6^th Circuit (based in Cincinnati, Ohio) in United States v. Kumar gave a strict interpretation of the statute and found that it was not limited only to “losses” sustained by the Coast Guard, but rather provided for the recovery of all costs incurred because of the criminal defendant’s actions.  For this reason, the Court of Appeals found that the judgment against the pilot which included the full extent of the costs spent by the Coast Guard, including its indirect overhead expenses, was appropriate.  The appellate court further upheld the judgment requiring the defendant to similarly repay the Canadian Armed Forces.  This aspect of the criminal penalty was not specifically provided for by statute, but was permissible within the trial court’s discretionary sentencing authority.

Note: This article first appeared in WorkBoat magazine.