H.R. 845, Criminal Restitution Improvement Act of 2007

Enacted on April 24, 1996, the Mandatory Victims Restitution Act of 1996 (MVRA) removed much of the discretion that federal district judges had enjoyed in determining when and whether to order the payment of restitution to victims in criminal cases under the Victim and Witness Protection Act of 1982. Under the MVRA, federal courts are required to order restitution for any crimes covered by the Act and are required to order a defendant to pay the full amount of a victim’s losses, regardless of the economic or personal situation of the defendant. These requirements apply when a defendant is convicted of a crime of violence in which a victim has suffered a physical injury or an offense against property in which a victim has suffered property loss or damage resulting in a pecuniary loss. For other offenses, federal judges may still exercise discretion in determining whether to order restitution, and in doing so they may consider, among other factors, the financial situation of the defendant and his or her dependents. In only two circumstances is an order of restitution under the MVRA not mandatory: when there are so many victims as to render restitution impracticable and when calculating a victim’s losses would be so difficult that “the need to provide restitution to any victim is outweighed by the burden on the sentencing process.”

Now a bill in the House of Representatives would eliminate all remaining judicial discretion in the area of criminal restitution and provide for mandatory restitution for the victims of any crime. The “Criminal Restitution Improvement Act of 2007,” H.R. 845, is designed to overhaul and consolidate federal law relating to restitution in criminal cases. The bill would require a court to “order a convicted defendant to make restitution for all pecuniary loss to identifiable victims, including pecuniary loss resulting from physical injury to, or the death of, another, proximately resulting from the offense.” In addition, it would expand the extent of such restitution to include specifically attorneys’ fees incurred by a victim during his or her participation in the investigation or prosecution of the offense. Given that a victim may be any identifiable person or entity suffering pecuniary loss, attorneys’ fees amassed by corporate “victims” in fraud cases are likely to be exceedingly high.

The bill would also alter the procedure for the issuance and enforcement of restitution orders. It would require the court to disclose to potential recipients of restitution, on request, information from the pre-sentence report relating to the economic circumstances of the defendant. It would also require courts, upon determination of the amount of restitution owed, to “order that the full amount of restitution is due and payable immediately.” The bill would go on to prevent a court from terminating a period of supervised release or probation until the defendant has paid all restitution in full. Thus, defendants liable for large amounts of restitution would be likely to remain under supervised release or probation for extended periods of time beyond those otherwise imposed as a result of the offense.

Additionally, upon the government’s ex parte application and a finding of probable cause that a defendant, if convicted, would be ordered to pay restitution for an offense punishable by imprisonment for more than one year, a court must, if it is in the interest of justice to do so, issue “any order necessary to preserve any nonexempt asset . . . of the defendant that may be used to satisfy [a] restitution order.” The government, therefore, would have broad power under this bill to seize or restrain any assets of a wide variety of criminal defendants before those defendants are convicted of (or perhaps even charged with) any crime, essentially enabling it to deprive many defendants of the means to hire counsel of their choice or even to support their families. The government would need only to show that a defendant has been charged, or is likely to be charged, with a crime for which restitution would be ordered on conviction in order to secure such a restraining order. Under this bill, no showing that that the assets restrained are connected with any criminal activity, that a defendant is likely to dispose of the assets in the absence of a restraining order, or that the government has a high likelihood of success on the merits of the case is necessary before the defendant’s assets may be frozen.

The bill does provide for a defendant’s right to a post-restraint hearing regarding such a protective or restraining order, but in the case of a post-indictment protective order this right would exist only if the defendant can show that he or she has no assets, other than those restrained, with which to retain counsel or to provide for the living expenses of his or her dependents and make a prima facie showing that the court was wrong in finding probable cause that the defendant would be ordered to pay restitution if convicted. Given the unlikelihood that many defendants will be able to meet these burdens, it seems probable that most restraining orders under H.R. 845 would be enforced without the defendant having had any opportunity to challenge the government’s restraint of his or her property or even to assert that the government has restrained more property than would be necessary to pay any forthcoming restitution order.

Finally, H.R. 845 would expand the reach of federal forfeiture law, requiring a court to order a convicted offender, on the motion of the United States attorney, to forfeit “any profits made possible by the offense.” This is an expansion of the current federal forfeiture provision, which authorizes the forfeiture of all or part of the proceeds from a defendant’s use of any depictions of his or her crime or any thoughts or opinions regarding that crime for entertainment purposes or in the media.

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