United States v. Yalincak
| Decision Date | 29 March 2022 |
| Docket Number | 20-1542-cr,20-2144-cr,20-1540-cr |
| Parties | United States of America, Appellee, v. Hakan Yalincak, Ayfer Yalincak, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Second Circuit |
Argued: October 29, 2021
Defendants-Appellants Hakan Yalincak and Ayfer Yalincak appeal from an order of the United States District Court for the District of Connecticut (Arterton, J.) denying their motions seeking a declaration that Ayfer Yalincak's restitution obligation has been satisfied. The Yalincaks argue that the district court erred in ruling that its "hybrid" restitution order required Ayfer Yalincak to continue making payments to a particular victim until either she paid her full obligation or the victim had been made whole by recovering the full amount of his loss. We agree with the district court and therefore AFFIRM its order in appeal No. 20-2144-cr and DISMISS the consolidated appeals in Nos. 20-1540-cr and 20-1542-cr for lack of standing.
Jeremiah Donovan, Old Saybrook, CT, for Defendant-Appellant Ayfer Yalincak.
Jeffrey C. Kestenband, The Kestenband Law Firm, LLC, Glastonbury, CT, for Defendant-Appellant Hakan Yalincak.
Heather L. Cherry (Marc H. Silverman, on the brief), Assistant United States Attorneys, for Leonard C. Boyle, Acting United States Attorney for the District of Connecticut, New Haven, CT, for Appellee.
Before: Lynch, Lohier, and Bianco, Circuit Judges.
Appellants Ayfer and Hakan Yalincak ("Ayfer" and "Hakan," respectively, and collectively, the "Yalincaks") appeal from an April 24, 2020 order of the United States District Court for the District of Connecticut (Janet Bond Arterton, J.) denying their motions to declare Ayfer Yalincak's restitution obligation under the Mandatory Victim Restitution Act ("MVRA"), 18 U.S.C. § 3663A fully satisfied.[1] Following guilty pleas from both defendants relating to a fraud scheme spearheaded by Hakan, the district court's judgments made the Yalincaks liable for restitution payments to certain victims, and specifically made Ayfer and Hakan jointly and severally liable to the victim referred to as W.A-M. for $500, 000 and Hakan individually liable to W.A-M. for an additional $250, 000, for a total of $750, 000. After payments and distributions from certain bankruptcy proceedings resulted in credits to W.A-M. exceeding $500, 000, the Yalincaks moved the district court to declare that Ayfer's restitution obligation was fully satisfied, even though W.A-M. was still owed an additional $139, 057.43 and Ayfer herself had made only minimal restitution payments falling far short of the amount for which she was liable jointly and severally with Hakan. The district court denied the motions, holding that under the "hybrid" understanding of the restitution orders, Ayfer's restitution obligation to W.A-M. would not be satisfied until either W.A-M. was made whole or Ayfer paid to W.A-M. the amount for which she had been held liable.
We hold that the district court did not err in finding that Ayfer has not yet satisfied her restitution obligation to W.A-M. We also conclude that district courts may employ the hybrid approach to craft restitution orders that both apportion liability among multiple defendants according to the loss caused by each defendant and hold defendants jointly and severally liable for some portion of the amounts owed to their victim or victims. Such hybrid restitution obligations are ordinarily not satisfied until either a defendant has paid as much as she has been ordered to pay or the victim has been made whole. Finally, we conclude that Hakan lacks standing to challenge the district court's orders as to Ayfer's rights and obligations, and that his appeals must be dismissed.
We therefore AFFIRM the April 24, 2020 order of the district court and DISMISS Hakan's consolidated appeals (Nos. 20-1540-cr, 20-1542-cr).
The underlying crimes in this case involved "a scheme to defraud investors in a sham hedge fund that [Hakan] purported to manage." United States v. Yalincak, 853 F.3d 629, 633 (2d Cir. 2017). The district court would later find that the scheme caused over $4, 000, 000 in losses to four victims. In June 2006, Hakan pled guilty to one count of wire fraud and one count of bank fraud. Shortly thereafter, Ayfer pled guilty to one count of conspiracy to commit wire fraud.
Although both Hakan and Ayfer pled guilty to participating in the same fraudulent scheme, Ayfer admitted only to a lesser role, and as reflected in their sentences, the district court found her responsible for losses to only two of the four victims of the fraud. Accordingly, on March 19, 2007, the district court sentenced Ayfer to 24 months' imprisonment followed by a term of 36 months of supervised release. The district court also ordered her to pay a total of $2, 250, 000 in restitution, for which she was to be liable jointly and severally with Hakan, with $1, 750, 000 owed to the victim F.M. and $500, 000 to the victim W.A-M.
A few weeks later, on April 11, 2007, the district court sentenced Hakan to concurrent terms of 42 months' imprisonment followed by concurrent terms totaling 60 months of supervised release. The district court ordered Hakan to pay a total of $4, 182, 000 in restitution to his victims. In addition to the $2, 250, 000 owed to F.M. and W.A-M. for which he was made liable jointly and severally with Ayfer, Hakan was found individually liable for an additional $1, 932, 000. Most of that money was owed to two other victims of the scheme, but the district court ordered Hakan to pay $250, 000 to W.A-M., apparently to compensate W.A-M. for losses incurred from fraudulent actions of Hakan before Ayfer, according to her guilty plea, had actively participated in that part of the scheme.
In the years since sentence was imposed, a substantial portion of the more than $4, 000, 000 in total restitution for which Hakan was held responsible (and for a portion of which Ayfer was also made liable) has been paid. As detailed below, the district court found that Ayfer herself has made only negligible payments. Although the record is not clear as to the precise manner of payment, in excess of $3, 500, 000 has been credited to Hakan, whether from payments made by him or from the recovery of assets from the bankrupt estates of his former investment funds.[2]
In March 2018, Hakan moved the district court to amend the restitution orders in various respects, and to enter an order "declaring the restitution order entered by this Court . . . against Ayfer Yalincak in the amount of $2, 250, 000.00 to be fully satisfied." App'x. 66. Ayfer successfully moved to adopt Hakan's motion as her own, and later moved separately for an order "declaring that her obligations under the March 21, 2007, restitution order have been satisfied." App'x 70.
At a hearing on the motions, the district court found that Ayfer herself had, by that point, paid only $3, 154.61 toward her restitution obligation. The district court further found that, at the time of its decision on April 24, 2020, after apportioning the recovered assets and disbursement of funds among the four victims, W.A-M. was still owed $139, 057.43 of the $750, 000 to which W.A-M. was entitled.
The district court was thus required to resolve a disagreement between the Yalincaks and the government concerning who remains responsible for the remaining restitution owed to W.A-M., or, put differently, how payments made by or amounts recovered from Hakan or his institutional entities should be credited. The Yalincaks, purporting to apply "traditional" principles of joint and several liability, contend that, because W.A-M. has already received payments (overwhelmingly from Hakan or entities controlled by him) in excess of the $500, 000 for which Hakan and Ayfer were jointly responsible, Ayfer's obligation should be declared satisfied, and the remaining restitution due should be considered part of the $250, 000 for which Hakan alone was solely liable. According to the government, the payments from Hakan should be credited in a manner that has the maximum potential to fully satisfy the debt owed to W.A-M., limited only by the district court's determination that Ayfer should have to pay no more than $500, 000 in restitution. That would be achieved by, in effect, crediting Hakan's payments first against the portion of the restitution award owed solely by Hakan, and only thereafter against the "joint and several" portion of the total restitution. That would leave Ayfer's liability in place until either she herself had paid $500, 000, or the full $750, 000 owed to W.A-M. had been paid by Hakan, Ayfer, or a combination of the two.
The district court ruled in favor of the government, concluding that the restitution portions of the sentences imposed on the Yalincaks had been crafted using the "hybrid" approach, which combines the MVRA's authorization of apportionment of liability to individual defendants with traditional principles of joint and several liability. United States v. Yalincak, No. 3:05-cr-153-JBA, 2020 WL 1969490, at *2 (D. Conn. Apr. 24, 2020). As described by the district court, the hybrid approach is "often used 'where multiple defendants are held liable for injuries caused by a common scheme.'" Id. at *3, quoting United States v. Sheets, 814 F.3d 256, 261 (5th Cir. 2016). Under that approach, the district court "'orders the co-defendants to pay restitution in different amounts for the same loss.'" Id. (brackets removed), quoting Sheets, 814 F.3d at 261.
The district court noted that "aside from making conclusory statements that 'this case did not involve a "hybrid restitution" approach,' Defendants offer no authority, argument, or reasoning in support of their...
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