Six Million Dollar Restitution Order in White-Collar Case Overturned on Appeal by Eleventh Circuit

In white-collar federal criminal cases, such as wire fraud or money laundering, the United States government often seeks an order from a court to require a defendant who is found guilty to pay restitution. This general policy is codified in the Mandatory Victims Restitution Act (MVRA), passed in 1996. Similar provisions exist in federal criminal prosecutions for seizures of vehicle or aircraft involved in an alcohol-related federal proceeding.

It is important to note, as suggested by the title, that the MVRA makes restitution mandatory for certain white collar criminal defendants. The Act requires that restitution be made to victims of the charged criminal activity. However, courts in the Eleventh Circuit have interpreted the term “victim” broadly, to include persons who are injured by criminal activity that is related to, but not identical with, activity charged by the federal government. In this way restitution orders under the MVRA can quickly grow.

The MVRA contains certain limits on restitution orders, however. Once a court has determined the monetary value of harm suffered by victims in the case, it is then required to consider a defendant’s financial ability to pay restitution. This was the issue in the recent case of U.S. v. Edwards, decided by the Eleventh Circuit Court of Appeals on September 6, 2013.

In Edwards, the Defendant was convicted of wire fraud, mail fraud, and money laundering as a result of an investment scheme where the Defendant encouraged parties to send him money for supposedly protected investments. In reality, the Defendant never invested the funds and instead spent the money on personal travel and luxury items. As a result of the scheme, the trial court ordered Edwards to pay approximately $6.8 million in restitution to both parties that he directly dealt with as well as victims who did not testify at his criminal trial. The order also required Edwards to pay restitution to persons who had not dealt with him but only a co-defendant, Reece.

The trial court did not specifically identify how Edwards had harmed the individuals who had only dealt with Reece. As a result, the restitution order was overturned and the case remanded to the district court in order to determine whether these individuals were entitled to restitution from Edwards.

Although the Order was overturned, it serves as an example of how mandatory restitution under the MVRA is often an issue in white collar criminal defense cases. The attorneys at Parkman and White, LLC are very familiar with orders of restitution, civil forfeiture efforts, and other proceedings associated with white collar criminal prosecutions. If you or someone you know is facing such charges please contact the firm at (855) 569-1678.

Leave a Reply

Your email address will not be published. Required fields are marked *