In March 2012, an aircraft pilot falsely reported seeing 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 and cost over $500,000. 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 Coast Guard and the Canadian Armed Forces for their expenses 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” under 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 6th Circuit (based in Cincinnati) 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. It also provided for the recovery of all costs incurred because of the defendant’s actions.
For this reason, the court 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.