When a person has suffered loss as the result of a crime, they will often seek some type of compensation. They want to be repaid for what they lost.
They want restitution.
If you have been charged with a crime, someone may have told you that if convicted you would have to pay restitution.
The federal government has laws that require a person who is found guilty of a crime to pay restitution. Every state in the U.S. has these laws as well. The purpose is to make the defendant accountable for their crime and to make the victim whole or return them to the same financial state they were before the crime.
If you are ordered to pay restitution, it may cost you dearly and may result in you losing your freedom. Until restitution is paid in full you might have to report to court regularly and any failure to pay could have serious consequences.
A good criminal defense attorney can help you with your case and may be able to help you reduce or eliminate any restitution. That is why it is so important to get professional legal counsel during an investigation or after an arrest.
Overview of Restitution
Restitution is payment made to the victim of a crime for their loss or injury sustained as a result of the crime. The person who committed the crime and was found guilty may be ordered to pay restitution to the victim, typically for financial loss. It is usually a part of sentencing.
Restitution is not a fine imposed by the court to be paid to the government. That is a different type of payment. A fine is paid to the government, but restitution is paid to the victim of the crime.
To illustrate, a person who is found guilty of shoplifting may be ordered to pay restitution to the owner of the store for the cost of the items that were stolen. Another example, a person who forged a person’s pension check and stole their money may be ordered to repay that victim the entire amount of that check – the money that they stole.
In the case of a person who assaults another person, the guilty party may be required to pay the victim’s medical bills. A person who stole someone’s identity may be ordered to pay restitution to the victim for out-of-pocket expenses they incur while restoring their credit history.
Victims may also be awarded restitution for lost wages or other expenses that they incur while recuperating, as well as funeral expenses to the family if the victim died as a result of the crime.
Victims who are entitled to restitution can be individuals or businesses and includes victim compensation programs, government agencies, and insurance companies.
When is Restitution Mandatory?
Under 18 U.S. Code § 3663A – Mandatory restitution to victims of certain crimes, restitution is mandatory when an individual is convicted of a misdemeanor or felony that falls under at least one of these categories:
- A crime of violence per the definition outlined in Section 16(a)
- An offense made against property per 18 U.S.C. or Section 416(a) of the Controlled Substances Act (21 U.S.C. § 856(a)) to include any offenses that were committed by deceit or fraud.
- An offense that is related to tampering with consumer products per Section 1365
- An offense related to medical products theft per Section §670
In these cases, the convicted party will be required by law to pay restitution to the victim. There will be no discussion or deals struck that eliminate this responsibility for the defendant. For these types of crimes, restitution is a statutory requirement and must be included, regardless of circumstances or plea deals.
Federal Restitution Laws
The Mandatory Victim Restitution Act of 1996 provides specific guidelines for ordering restitution, repayment, and what types of income can be seized or garnished.
Two federal statutes specifically address restitution.
- 18 U.S. Code § 3663 – Order of restitution
- When determining whether to order restitution, the court must consider:
- The amount that the victim lost as a result of the crime, and
- The defendant’s
- Financial resources
- Financial needs and earning ability of the defendant and dependents
- Other factors that the court deems appropriate
- When determining whether to order restitution, the court must consider:
- 18 U.S. Code § 3663A – Mandatory restitution to victims of certain crimes
Several individual statutes authorize restitution for specific offenses:
- 18 U.S. Code § 43 – Force, violence, and threats involving animal enterprises (Section c) – Animal Enterprise Terrorism
- 18 U.S. Code § 228 – Failure to pay legal child support obligations (Section d) – Failure to Provide Child Support
- 18 U.S. Code § 1593 – Mandatory restitution(Section a) – Human Trafficking
- 18 U.S. Code § 2248 – Mandatory restitution – Sexual Abuse
- 18 U.S. Code § 2259 – Mandatory restitution – Sexual Exploitation of Children
- 18 U.S. Code § 2264 – Restitution – Stalking or Domestic Violence
- 18 U.S. Code § 2323 – Forfeiture, destruction, and restitution – Copyright Infringement
- 18 U.S. Code § 2327 – Mandatory restitution – Telemarketing Fraud
- 21 U.S. Code § 853 – Criminal forfeitures (Section q) – Amphetamine or Methamphetamine Offenses
- 18 U.S. Code § 2421A – Promotion or facilitation of prostitution and reckless disregard of sex trafficking – Reckless Disregard of Sex Trafficking
- 18 U.S. Code § 2429 – Mandatory restitution – Transportation or Travel for Unlawful Sexual Purposes
All of these laws provide compensation to the victim of a crime. However, many factors go into determining whether a person must pay restitution and how much they must pay. In cases where the crime warrants mandatory restitution, it is a little more straightforward, but there is still much to consider.
It can get very messy very quickly which is why you need an experienced criminal defense attorney on your side to fight for you and ensure that your rights are protected.
Can the Amount of Restitution be Increased After the Judgment?
Yes, the amount of restitution can be increased even after the defendant receives the initial court order. Under the Act, if a person who has been identified as the victim of a crime discovers that they have more or additional losses after a judgment has been filed, they may petition the court to amend the restitution order.
They have 60 days from the day they discovered the additional losses to petition the court and request an amendment. However, upon doing so, they must show good cause for failing to include the losses in the initial claim for restitution.
Additionally, if the victim of the crime or the U.S. Attorney discover that there has been a material change in the economic circumstances of the defendant that would affect their ability to pay restitution, the payment schedule can be changed, or if the required payment is less than full payment, the amount can be increased to the full payment. This can occur even after a judge has imposed the restitution order. If the victim discovers this information about the defendant, they will contact the U.S. Attorney’s office.
The court could charge interest on the restitution while the defendant is paying it, especially if they do not make regular, timely payments.
How is Federal Restitution Collected?
The U.S. Department of Justice (DOJ) is the agency responsible for the collection of restitution payments from defendants who have been ordered by a federal court to pay as a condition of their sentence. Within the agency, the Financial Litigation Unit was created to handle the collection of restitution payments and disburse them to the victims as required by law. Each of the 94 U.S. Attorney’s Offices has a Financial Litigation Unit within it.
If the defendant is employed, the judge may order a garnishment of wages to satisfy restitution. When this happens, a percentage of the person’s gross pay is automatically deducted before the defendant even receives the check.
In other cases, the court will allow the defendant to make regular payments to their probation officer or other entity until the restitution is paid in full.
After the order is entered, the U.S. Attorney’s Office is required by law to file a lien against the defendant for the restitution amount including interest. The current legal rate for interest is what will be used.
A Federal Judgment is valid for either:
- 20 years from the date the judgment was entered, or
- 20 years after the fined person is released, or
Once the lien is filed, the government assigns the restitution debt as one of the highest collection priorities of the government. Restitution laws allow the government to seize assets and property if the government believes that doing so will help raise the necessary funds to satisfy the restitution judgment.
It is also important to note that incarceration does not stop the lien or the restitution process. The government can enforce the lien while the defendant is in prison, or at any time.
What Happens if You Fail to Pay Federal Restitution?
If you have been ordered to pay restitution and you don’t pay it, there are several actions that the court can take:
- Revoke your probation or supervised release
- Convert your restitution into a civil judgment and file it against you
- Hold you in contempt of court
If 20 years have passed that does not mean you can just stop paying. The government can still come after you for collections.
Can Restitution be Forgiven or Reduced?
Restitution is directly linked to the victim of the crime. It is intended to pay them for money they lost when the crime was committed against them. Because of this, the court can’t just step in and reduce the amount of restitution that is owed.
The defendant can petition the court to request a reduction in restitution, but there is very little chance that it will happen.
How Does Restitution Impact Tax Refunds, Stimulus Checks, Bankruptcy, etc.?
Restitution payments are not protected in any way. If the payor receives any “substantial resources” he or she is required by law to apply the funds to any outstanding fine or restitution. This can include:
- Inheritance money or property
- Life insurance as a beneficiary
- Insurance settlement
- Stimulus checks
- Tax returns
- 401K, Roth IRA, IRA, Investments
- Retirements accounts
- Social security check
- Seize bank accounts
- Seize property, including homes, vehicles, and land
Restitution is not dischargeable and cannot be included in a defendant’s bankruptcy.
New York Restitution Laws
New York Penal Law – Section 60.27 – Restitution and Reparation provides instruction for when and how victims are eligible for restitution.
In New York, restitution and compensation are two distinctly different types of payment. Restitution is paid by the person who committed a crime to the victim of the crime. Compensation is not necessarily paid by a person who committed a crime, or intentionally caused damages and profited from a crime. In such cases payor may have damaged property in a car crash or their dog may have bitten someone and they are ordered to compensate the injured party for any loss they sustained as a result of the incident.
New York has several laws that address payment of restitution:
- 420.05 – Payment of fines, mandatory surcharges, and fees by credit card
- 420.10 – Collection of fines, restitution, or reparation
- 420.20 – Collection of fines, restitution, or reparation imposed upon corporations
- 420.30 – Remission of fines, restitution, or reparation
- 420.35 – Mandatory surcharge and crime victim assistance fee; applicability to sentences mandating payment of fines
- 420.40 – Deferral of mandatory surcharge; financial hardship hearings
The court can order that the defendant pay the restitution in full in one lump sum or it can order that the defendant pays overtime, by making a series of payments.
When the judge is determining a restitution payment order, they consider several factors, including:
- The charges
- The details of the crime
- Whether the defendant was convicted
- Any dependents of the defendant or if they have other financial obligations
- Details of the defendant, including:
- Their mental health
- Their physical health
- Their current economic status
- Their education
- The employment status of the defendant
There aren’t many ways to challenge restitution, but unjust enrichment is often used. It is not just one defense, but several, which include:
- The doctrine of unclean hands. The defense shows the plaintiff to be unethical or acting in bad faith and therefore should not receive restitution
- Fraud. The money or property that was lost by the victim during the crime was originally gained by fraud
- Minors. The defendant is a minor
Other defenses against restitution include:
- Violations of the statute
- The government is seeking restitution for a person who is not the victim
- The restitution (all or part) is for a crime the defendant was not charged with
- The defendant did not cause the injury or damage
If you have been charged with a crime and feel you could be required to pay restitution, get legal representation now.
Call the Litvak Law Firm now at (718) 989-2908 and get the peace of mind you deserve knowing that your rights will be protected. Mr. Litvak has the knowledge, skills, and experience to navigate federal courts as well as New York courts. He has handled many high-profile criminal cases and has an impressive track record of success.
Don’t wait to see what happens, call today, and get the Litvak Law Firm in your corner.