Criminal Restitution in the 110th Congress: A Sketch

Congressional research reportJan 13, 2009

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Prepared for Members and Committees of Congress

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Congress enacted two restitution provisions in the 110th Congress, one as part of the Identity

Theft Enforcement and Restitution Act of 2008 (Title II of P.L. 110-326)(H.R. 5938), and the

other as part of the Prioritizing Resources and Organization for Intellectual Property Act of 2008

(P.L. 110-403)(S. 3325). It also devoted considerable time and attention to other restitution

proposals that did not see final action before the end of the Congress.

Restitution legislation in the 110th Congress fell into three categories. Some proposals, like the

two provisions enacted, create or would have created new federal crimes or amend specific

existing federal offenses and in doing so include restitution provisions particular to those

offenses, e.g., P.L. 110-326 (intellectual property), P.L. 110-403 (identity theft); H.R. 880, H.R.

1582, H.R. 1692, S. 456, and S. 990 (gang bills); H.R. 6491 (organized retail offenses), H.R.

3148 (Mann Act), H.R. 3990 (sexual military offenses), and H.R. 871 (spousal support offenses).

Other proposals would have addressed a particular aspect of the law such as abatement which

limits restitution collection after the defendant’s death (S. 149 / H.R. 4111). Two bills – H.R. 845,

the Criminal Restitution Improvement Act, and S. 973 / H.R. 4110, the Restitution for Victims of

Crime Act – sought to make substantial changes in federal restitution law. They anticipated three

kinds of adjustments: (1) an expansion of offenses for which restitution may be ordered without

recourse to the laws relating to probation and supervised release; (2) an overhaul of the

procedures governing the issuance and enforcement of restitution orders to afford prosecutors

greater enforcement flexibility without having to seek the approval of the sentencing court; and

(3) authority for preindictment and presentencing restraining orders and other protective measures

to prevent dissipation of assets by those who may subsequently owe restitution.

This is an abridged version of CRS Report RL34139, Criminal Restitution Proposals in the 110th

Congress, by (name redacted). Related reports include CRS Report RL34138,Restitution in

Federal Criminal Cases, by (name redacted), and CRS Report RS22708,Restitution in Federal

Criminal Cases: A Sketch, by (name redacted).

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Introduction ..................................................................................................................................... 1

Restitution for New and Existing Crimes........................................................................................ 1

Abatement ....................................................................................................................................... 1

H.R. 845 (Mandatory Restitution)................................................................................................... 2

S. 973 / H.R. 4110 (Discretionary Restitution) ............................................................................... 2

Procedural Adjustments (H.R. 845)................................................................................................. 2

Procedural Adjustments (S. 973 / H.R. 4110) ................................................................................. 3

H.R. 845 / S. 973 / H.R. 4110: Section 3664A (Asset Preservation)............................................... 4

H.R. 845 / S. 973 / H.R. 4110 (Anti-Crime Injunction Expansion) ................................................ 5

Author Contact Information ............................................................................................................ 6

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Restitution is the act of restoring an individual or entity in whole or in part to the lost

circumstances they might have once enjoyed. In a federal criminal context, it is the order of a

sentencing court directing a defendant to reimburse or otherwise compensate the victims of his

crimes. Restitution is based on the losses suffered by the victims of a crime. Neither the

defendant’s financial condition at the time of sentencing, nor his future economic prospects figure

in the amount of restitution awarded. Consequently, in some cases the amount of restitution

ordered may exceed what the defendant can ever reasonably be expected to pay, particularly in

the case of mandatory restitution. Nevertheless, there have been suggestions that in other

instances insufficient restitution has been ordered or collected because of the particularities of

restitution law.

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Restitution legislation in the 110th Congress fell into three categories. Some proposals created or

would have created new federal crimes or amend specific existing federal offenses and in doing

so included restitution provisions particular to those offenses. Other proposals addressed the

consequences of abatement, the legal fiction under which a conviction and all of its consequences

including restitution are washed away when the defendant dies during the pendency of his appeal.

Still others would have provided for more general revisions of existing law in the area.

By virtue of Section 206 of the Prioritizing Resources and Organization for Intellectual Property

Act of 2008, P.L. 110-403, 122 Stat. (2008)(S. 3325), conviction for any of a number of

intellectual property offenses also results in a mandatory restitution order. The Identity Theft

Enforcement and Restitution Act, P.L. 110-326, 122 Stat. 3560 (2008)(H.R. 5938), among other

things, authorizes federal courts to order restitution for the victims of identity theft and

aggravated identity theft to compensate them for the time reasonably spend to undo the harm

caused or intended by the theft. Other bills still pending when Congress adjourned would have

amended federal restitution law with respect organized retail crime, street gang offenses, sex

offenses under the Uniform Code of Military Justice, “dead beat dad” offenses, and offenses

involving travel of illicit sexual purposes.

Upon the death of a defendant pending appeal the courts treat his indictment and conviction as if

they had never occurred. The case is returned to the lower federal court with instructions to vacate

the conviction and to dismiss the indictment. The circuit courts are somewhat more divided on the

question of whether a restitution order likewise abates upon the death of the defendant pending

appeal. In the twilight of the 109th Congress, the Senate passed legislation that would have barred

abatement of a restitution order. The bill’s sponsor, Senator Feinstein, reintroduced essentially the

same proposal as S. 149 in the 110th Congress, which Representative Shea-Porter introduced in

the House as H.R. 4111.

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H.R. 845, introduced by Representative Chabot would have replaced the discretionary and

mandatory restitution provisions of Sections 3663 and 3663A with a revised Section 3663.

Existing law requires restitution for crimes of violence, maintaining a drug-involved premises,

and when prohibited in Title18, fraud and crimes against property. It permits a court to order

restitution for crimes otherwise proscribed in Title18, as well as for various aviation safety and

drug offenses, and as a condition for probation and supervised release. It does not call for

restitution in the case of most securities offenses, environmental offenses, drug offenses, or most

of the other property crimes outlawed in other titles of the Code. H.R. 845 would have required

restitution for all federal offenses that result in qualified losses to qualified victims.

Existing law portrays the restitution to be awarded in the case of qualifying offenses involving the

loss or destruction of property in one way (return and/or payment of the lost value) and that to be

awarded in the case of qualifying offenses involving physical injuries in another (medical

expenses, costs of rehabilitation, funeral costs when the victim has been killed, and the victims’

expenses relating to their participation in the investigation and prosecution of the qualifying

offense). H.R. 845 would have treated the losses covered by restitution in much the same way it

treats the definition of victim and inventory of qualifying offenses. It would have adopted some

features of existing law and changed others. It would have carried forward the language under

which restitution orders must include “in the case of an offense resulting in the death of the

victim, an amount equal to the cost of necessary funeral and related services.” It used the same

language to describe restitution for lost income, medical expenses, and the cost of

rehabilitation—with a difference. Existing law makes them a matter of mandatory restitution only

with respect to offenses involving physical injuries. H.R. 845 would have required restitution

regardless of the nature of the crime. Its vindication expenses clause would have run parallel to

existing law, but mades specific allowance to cover the costs of attorneys other than those

employed by the government.

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S. 973 / H.R. 4110‘s proposed expansion of authority to order restitution was far more selective

than that of H.R. 845. It would have amended Section 3663 to permit a federal court to order

restitution following conviction for certain (1) Federal Water Pollution Control Act offenses; (2)

Marine Protection, Research, and Sanctuaries Act offenses; (3) Act to Prevent Pollution from

Ships offenses; (4) Safe Drinking Water Act offenses; (5) Solid Waste Disposal Act offenses; and

(6) Clean Air Act offenses. S. 973 / H.R. 4110 amends the discretionary and mandatory restitution

provisions of Sections 3663 and 3663A to permit victims to recover related attorney fees other

than those of government attorneys.

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The procedure for issuing a restitution order is laid out in 18 U.S.C. 3664. Following conviction,

a probation officer conducts an investigation, collects information from the prosecutor, victims

and defendant, and prepares a report for the court which is shared with the parties. The court

conducts a hearing to resolve any questions relating to whether a particular individual is a victim

entitled to restitution, whether a particular loss is one that qualifies for restitution, and the

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specifics of the defendant’s ability to pay. Court-issued restitution orders may direct the defendant

to pay in a lump sum, in installments, in-kind or in some combination of the three. Until full

restitution is made, the court may modify its order to reflect any change in the defendant’s

financial circumstances. The Justice Department contends that the role which the statute assigns

to the courts impedes effective collection of restitution and has recommended amendments.

H.R. 845‘s amendments would have permitted the court to establish a payment schedule, but

would have allowed the government to formulate one if the court did not. Moreover, the fact that

the court had established a payment schedule would not have prevented the government from

supplementing the effort with other collection measures taken without the need to seek the

sentencing court’s approval.

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Like H.R. 845, more than a few of S. 973 / H.R. 4110‘s amendments would have been crafted to

provide alternatives to direct involvement of the sentencing court in restitution enforcement. The

approach of S. 973 / H.R. 4110 to judicial scheduling of installment payments is much like of

H.R. 845. The Bureau of Prisons has a program designed to ensure that federal inmates meet their

financial responsibilities which requires them to have a financial plan to meet those obligations

from the money they earn from prison work assignments if nothing else. The Justice

Department’s Analysis claims that appellate decisions requiring sentencing courts to maintain

control over installment payment plans effectively prohibits the BOP from enforcing final

restitution orders through its long established program.

Under existing law, a prosecutor’s options when enforcing a restitution order include the inmate

financial responsibility program, liens against the defendant’s property, and garnishment of the

defendant’s wages or amounts in his pension plan. A court, however, may stay execution of a

restitution order pending appeal. S. 973 / H.R. 4110 would have dictated that any stay pending

appeal that curtails a prosecutor’s ability to enforce a restitution order in the interim must be for

good cause stated on the record. It also would have seemed to narrow the court’s discretion over

the protective orders that may accompany a stay. In addition, S. 973 / H.R. 4110 would have

stated that the issuance of such mandatory protective measures should not be construed as a

limitation on the authority of prosecutors to continue their restitution-related investigations and

enforcement efforts.

Under the Federal Rules of Criminal Procedure, the probation officer’s sentencing report may not

include certain medical, confidential or informant-related material. The Rules also forbid

disclosing matters occurring before a federal grand jury, subject to certain exceptions, some of

which require court approval and some of which do not. Various other statutes prohibit the

disclosure of financial information but recognize an exception for information provided under

grand jury subpoena. Those statutes may be thought to proscribe disclosure beyond the grand jury

absent some additional grant of authority. There are no statutory provisions which specifically

proscribe Bureau of Prisons officials from disclosing to prosecutors information relating to an

inmate’s ability to pay restitution. S. 973 / H.R. 4110 would have granted the United States

Attorneys access without court approval to financial information on the defendant held by a grand

jury, the Probation Office, or the Bureau of Prisons in order to enforce restitution orders. The

Justice Department has explained that the change is necessary because some district courts insist

upon court approval before allowing prosecutors to examine probation officer reports on a

defendant’s financial condition. They do not explain why explicit authority for access to grand

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jury material and Bureau of Prison records is necessary or why court approval constitutes an

obstacle.

S. 973 / H.R. 4110 had several provisions designed to prevent the dissipation of assets following

the issuance of the original restitution order. For instance, it would have insisted that every

restitution order include an instruction that the defendant was to refrain from any action that

would conceal or dissipate his assets. The court ordering restitution could have directed the

defendant to bring crime-related property within the jurisdiction of the court. At any time, it could

have entered a protective order to ensure the availability of assets for restitution purposes. And it

could have crafted or modified a restitution order to reflect the fact that the defendant had

concealed or dissipated assets.

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H.R. 845 and S. 973 / H.R. 4110 would have added virtually identical asset preservation

components to the restitution procedure in the form of a new 18 U.S.C. 3664A. The asset

preservation features of Section 3664A contemplated judicial asset freeze orders and other

protective measures before conviction, both before and after indictment. The procedure drew

upon, and in part was modeled after, the protective order features of the criminal forfeiture

section of the Controlled Substances Act. The title to forfeitable property, however, vests in the

United States when the confiscation-triggering offense is committed. Restitution has no

comparable feature. At the time of the passage of the Controlled Substance Act, property used to

facilitate the commission of a forfeiture-triggering offense could be confiscated in a civil

proceeding upon a showing of probable cause. Restitution requires conviction of the property

owner; civil forfeiture does not.

On the other hand, proponents might have pointed out that some of the differences between

forfeiture and restitution argue for greater protective tools in the case of restitution. The

government is the beneficiary of confiscation; the victims of crime are the beneficiaries of

restitution. A victim is likely to feel the loss of restitution more sharply than the government the

loss of forfeitable property. As for the availability of a civil forfeiture equivalent, proponents

might note that under existing law, authorities may use a search warrant to seize the fruits of

crime based on the probable cause. The protective orders envisioned in H.R. 845 and S. 973 /

H.R. 4110 either would have involved property traceable to a particular offense or could have

only been issued in the interest of justice. They would not have been administrative commands,

but court-issued protective measures complete with the prospect of a judicial hearing to contest

their issuance.

The task of assessing the relative strengths and weaknesses of proposed Section 3664A was made

more complicated by its occasional want of clarity. Notwithstanding the Justice Department’s

guidance, the text was sometimes perplexing. It seems fairly certain that the bills meant to

establish the following procedure in the case of post-indictment orders. Courts would have been

authorized to issue an ex parte protective order upon a probable cause showing that (1) the

defendant had been indicted for an offense for which restitution might be ordered, (2) that the

offense or offenses had resulted in qualified losses to qualified victims of an approximate amount

for which the defendant would be obligated to make restitution if convicted of the offense or

offenses charged, (3) that the value of the property to be restrained or the amount of the bond to

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be posted did not greatly exceed the approximate amount of restitution that might be awarded,

and (4) (perhaps) that the property was traceable to the offense charged.

A defendant would have been entitled to a hearing upon a prima facie showing that the value of

property restrained or the amount of the bond greatly exceeded the amount of the restitution that

could be ordered; or that the law did not authorize restitution for the offense, victim, or losses

claimed in the order; or (if court relied on the traceable property prong of proposed Section

3664A(a)(1)(A)) that the property restrained was not traceable to the offense charged. Even then,

a hearing could have been granted only if the defendant could also show by a preponderance of

the evidence that the order had or would deprive him of defense counsel of his choice or deprive

him or his family of the necessities of life. If the defendant had been able to meet this burden – or

whatever reduced burden due process demands – he would have been entitled to a hearing at

which the government may contest his challenge. After which, the court could modify its

protective order should it find either (1) a want of probable cause to believe that the restrained

property or at least all of it would be needed to satisfy any restitution order under the facts of the

case or (2) (if the “traceable property” authority was relied upon) a want of probable cause to

believe that the restrained property, or some of it, was traceable to the offense charged, or

(3)(perhaps or at least to the extent due process requires) that a failure to modify the order would

deny the defendant defense counsel of his choice or would impose an undue hardship upon the

defendant or his family. It seems likely that is what S. 973 / H.R. 4110 and H.R. 845 meant; it is

not literally what they said.

As for preindictment protective orders, the applications and orders would have been governed by

21 U.S.C. 853(e) and proposed Section 3664A. Prior to indictment, Section 853(e) requires that

the property owner be given notice and an opportunity for a hearing, unless the government

establishes by probable cause that the property will become unavailable if prior notice is given.

The bills would seem to have made the initial issuance of the restraining order ex parte in all

cases. Such ex parte restraining orders would have been temporary, good for only ten days unless

extended for cause. Absent an indictment, the restraining order would only have been good for

ninety days, again unless extended for cause. Section 3664A would not have described the postrestraint hearing to be held in preindictment cases. Section 853(e)(1)(B) indicates that upon

application of the United States, the court may enter protective orders to preserve the availability

of property that the government asserts is subject to criminal forfeiture prior to indictment if it

finds the government is likely to prevail on the issue and the government’s need for availability

outweighs any hardship of the property owner. Third parties may move for modification of a

restraining order on the grounds of hardship and less onerous alternatives. At least on the face of

things, third parties may not move to have a restraining order modified on the grounds that the

property restrained belongs to them rather than to the defendant, although they may do so at the

conclusion of the criminal case.

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Traditionally, the federal courts will not enjoin the commission of a crime unless expressly

authorized to do so by statute. As part of the Comprehensive Crime Control Act of 1984,

Congress enacted 18 U.S.C. 1345 which authorized the federal courts to enjoin the commission of

various fraud offenses and to freeze property derived from some of these offenses, namely,

banking law or health care offenses. H.R. 845 and S. 973 / H.R. 4110 would each have enlarged

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Section 1345 to authorize both injunctions and freeze orders relating to any federal offenses for

which restitution might be ordered. Their reach would have been different since their view of

offenses for which restitution may be ordered was different. For H.R. 845, it would have been any

federal offense which proximately causes another pecuniary loss. For S. 973 / H.R. 4110, it would

have been the mandatory restitution crimes, that is, any federal crime of violence, property

damage, fraud, and product tampering, as well as the discretionary restitution crimes, that is, any

other crime proscribed in Title18, the various aircraft safety and drug offenses, and the

environmental crimes that S. 973 / H.R. 4110 would have added to the restitution list. Given the

wide-ranging freeze orders that the bills would have made available elsewhere, the freeze order

component of their amendment of Section 1345 may have been unnecessary.

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(name redacted)

Senior Specialist in American Public Law

/redacted/@crs.loc.gov, 7-....

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