Many victims, particularly victims of financial fraud, are interested in knowing how they can be repaid for the financial loss suffered as a result of a federal crime. In many types of federal criminal cases, it is mandatory for a defendant to pay restitution for offenses occurring after April 24, 1996. For most crimes committed prior to that date, the sentencing judge has discretion in deciding whether to order restitution depending on the defendants ability to pay. As a practical matter, however, a defendant who does not have assets or has little potential to make money may be unlikely to make meaningful restitution to the victims. The following information provides an overview of restitution in the federal court system.
The Mandatory Victims Restitution Act of 1996, expanded the scope of mandatory restitution and consolidated procedures for the issuance of restitution orders. The Act requires the court to order full restitution in certain cases if there is an identifiable victim or victims who have suffered a physical injury or pecuniary harm. It requires the court to enter a restitution order for each defendant, without regard to the defendant's ability to pay, who has been convicted or has pled guilty to charges of:
● a crime of violence;
● an offense against property, including offenses committed by fraud or deceit; telemarketing fraud;
● sexual abuse;
● sexual exploitation and other abuses of children; domestic violence; and, tampering with consumer products.
The exception to mandatory restitution for the above categories is for an offense against property if the court makes a finding that the number of identifiable victims is so large as to make restitution impracticable or determining complex issues related to the cause or amount of the victims' losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process.
The court may, but is not required to, order restitution for any offense under Title 18 of the United States Code that is not covered by the mandatory restitution provisions, certain drug offenses as long as the victim is not a participant, air piracy offenses, and in any criminal case to the extent agreed to by the parties in a plea agreement.
In determining whether to award restitution in these cases the court is required to consider the amount of the loss sustained by each victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate. To the extent the court determines that the complication and prolongation of the sentencing process involved in ordering restitution outweighs the need to provide restitution to any victims, the court may decline to do so.
Restitution As A Condition of Probation or Supervised Release
Restitution can be ordered as a condition of probation or supervised release. There must be an identifiable victim that has suffered physical injury or pecuniary loss.
Regardless of how restitution is imposed, as mandatory or discretionary, the procedures that must be followed are the same. Once a defendant pleads guilty or is found guilty at trial, the available information on each identified victim's loss, which is usually obtained by the case agent during the investigation of the case, is provided to the U. S. Probation Office by the Assistant U.S. Attorney prosecuting the case. This victim loss information is incorporated into the pre-sentence report being prepared by the U.S. Probation Officer. It is during the time between the conviction or plea and the sentencing hearing that victim impact statements are solicited from the identified victims of the convicted offenses. A letter soliciting victim impact statements from the identified victims is sent by both the U.S. Probation Office and the U.S. Attorney's Office. It is through the submission of a written victim impact statement that victims have the opportunity to submit financial loss information, as well as emotional impact information to the court. The findings of the pre-sentence report are relied upon by the judge in determining the appropriate sentence and appropriate amount of restitution.
Allowable Restitution Costs
In most cases, pain and suffering, attorney fees, lost interest, opportunity costs and tax penalties are not included in court ordered restitution. In determining loss amounts for restitution, it is important to remember that the harm suffered must be as a result of the offense of conviction. The primary consideration is whether the harm was caused by the offense conduct. The court may, however, order restitution to persons other than victims of the convicted offense if agreed to in the plea agreement.
Lost income and necessary child care, transportation, and other expenses related to participation in the investigation or prosecution of the offense or attendance at court proceedings related to the offense may be considered for restitution. Receipts and other supporting documentation should be provided to substantiate loss figures.
The court may decline to order restitution if it finds that determining restitution is too complex.
Physical Injury as a Result of the Crime
For an offense resulting in physical injury to a victim, the court may order restitution for: payment equal to the cost of necessary medical and related professional services and devices relating to physical, psychiatric, and psychological care; payment equal to the cost of necessary physical and occupational therapy and rehabilitation; and or reimbursement to the victim for income lost as a result of the offense.
Restitution in Fraud Cases
In most fraud cases, restitution may be ordered where victims of the offense of conviction have suffered the loss of money or some negotiable instrument or the damage or loss of property. The court may order a defendant to pay an amount equal to each victim's actual losses, usually the value of the principal or property fraudulently obtained.
Additional Restitution Provisions
Under the Mandatory Victim Restitution Act, if an identified victim discovers further losses after a judgment has been filed, that victim has 60 days after discovery of the losses, to petition the Court for an amended restitution order. This order may be granted only upon a showing of good cause for the failure to include such losses in the initial claim for restitution.
What You Should Know if The Defendant is Ordered to Pay You Restitution
Most victims are eager to know when they will receive their money. In most cases it will take a very long time and often victims do not receive the full amount owed to them. Typically in fraud cases there are hundreds of victims and the amounts owed are quite substantial. Restitution payments to victims are dependant upon the defendant's ability to pay. In addition, if the defendant is in prison, the defendant may not make any payment during that time or may make only very small payments.
A defendant's liability to pay a restitution order lasts twenty (20) years plus any period of incarceration, or until the death of the defendant. An order of restitution is not dischargeable in bankruptcy.
Because restitution orders are good for twenty years, it is extremely important for victims to notify the court of a change in their mailing address. The U.S. District Court Clerk's Office, Financial Section, should be notified in writing by the victim if there is a change in their mailing address.
Unless the court has ordered otherwise, restitution payments made by the defendant are disbursed by the U.S. District Court Clerk's Office to all the victims named in the restitution order in proportion to their loss. For example, if the total amount of the restitution order is $100,000 and victim A lost $25,000 and victim B lost $75,000 then victim A's loss equals 25% of the total restitution order and victim B's loss equals 75% of the total restitution order. Therefore, if the defendant makes a payment of $1,000 victim A would receive $250 and victim B would receive $750.
The Clerk's Office will not issue checks for very small amounts because it is not economically feasible to do so. Usually checks will be issued once there is at least $10.00 to disburse to each victim named in the restitution order..
If the defendant is placed on federal supervised release, the assigned U.S. Probation Officer will monitor the defendant's economic circumstances and ability to pay the restitution obligation during that time period.
As noted above, restitution payments tend to be small and it takes some time for there to be enough to send to the victims. However, if victims have been receiving payment on a consistent basis and suddenly stop receiving it, contact the U.S. Probation Office, if the defendant is on supervised release, to determine the reason. If the defendant is not on supervised release, contact the U.S. Attorney's Office Financial Litigation Unit.
If victims have information concerning a material change in the defendant's economic condition that might affect his or her ability to make restitution payments, contact the U.S. Attorney's Office Financial Litigation Unit. The U.S. Attorney's Office Financial Litigation Unit pursues various means to ensure that restitution orders are enforced to the fullest extent possible.
A victim may enforce a restitution order as if it is a civil judgment. At the victim's request, the U.S. District Court Clerk's Office will issue an abstract of judgment certifying that a judgment has been entered in his or her favor. To pursue legal action on their own behalf, victims may register or record the abstract in accordance with State law to obtain a lien against the property of the defendant.
Victims may wish to consult with a private attorney of their choice or a legal services attorney to obtain guidance about proceeding individually against a defendant to recover losses or damages sustained as a result of the crime. The U.S. Attorney's Office cannot consult with victims or advise victims regarding their right to purse civil litigation against a defendant.
A victim may at any time assign their own interest in restitution payments to the Crime Victims Fund. The Crime Victims Fund provides funding to crime victim assistance and compensation programs throughout the United States.
Victims who have questions about a restitution order entered in a criminal case prosecuted by the U.S. Attorney's Office for the District of Vermont should contact the following offices for assistance:
For questions about the restitution process or the judgment, contact:
U.S. Attorney's Office
For questions about enforcement of the restitution order or to report information about a defendant's assets, contact:
U.S. Attorney's Office
Financial Litigation Unit
For questions about payments disbursements or to report a change in mailing address, contact:
U.S. District Court Clerk's Office
P.O. Box 945
Burlington, VT. 05402
For questions about a defendant's ability to pay or to report information about a defendant's assets while on supervised release, contact:
U.S. Probation Office
11 Elmwood Ave.
Burlington, VT. 05402