Fines and Restitution in Federal Drug Cases.

No, they are not. Restitution differs from criminal fines and forfeiture in two key ways. The first key difference is the statutes that apply. The MVRA and VWPA apply to criminal restitution in cases involving a criminal drug offense (or other qualifying offense), but not to criminal fines or forfeiture. Similarly, criminal fines are subject to 18 U.S.C. § 3572, and matters related to forfeiture (whether criminal or civil) are governed by 18 U.S.C. §§ 981 and 982 and other statutes. As a result, the MVRA and VWPA govern the timing and applicability of restitution as financial restitution under those statutes. However, the MVRA and VWPA do not address all of the financial consequences of a federal criminal conviction in a drug case (MVRA, 18 U.S.C. § 3663A(a)(1); VWPA, 18 U.S.C. § 3663). While forfeiture issues can be complex and a defendant’s obligations for restitution can be substantial, forfeiture-related property issues (including seized assets) are legally distinct from restitution disputes under federal law.

The second key difference is the purpose of the payment:

• Fines are meant to punish the defendant for their crime(s) and are paid to the federal government.
• Restitution is meant to compensate victims for their losses caused by the defendant’s criminal offense. As the U.S. Supreme Court said, “The primary goal of restitution is remedial or compensatory, cf. Bajakajian, supra, at 329, but it also serves punitive purposes.” (521 U.S. 201, 215).
• With forfeiture, the goal is either to strip the defendant of the proceeds of their illegal criminal acts or to deprive the defendant of assets the government claims are subject to forfeiture based on their alleged use in a crime.

Unlike restitution, criminal fines are not required as a sentencing provision under the MVRA or VWPA. Consequently, while a criminal drug case defendant’s ability to pay may affect when they pay restitution in some circumstances, it generally cannot affect whether they have to pay criminal fines or be subject to forfeiture.

When Does the MVRA Make Restitution Mandatory in a Federal Drug Case?

The Mandatory Victims Restitution Act (MVRA) dates from 1996 and governs mandatory restitution for specified federal offenses. The VWPA was enacted in 1982 and generally governs court-ordered restitution in cases involving qualifying federal criminal offenses not covered by the MVRA. Both statutes are codified at 18 U.S.C. §§ 3663, 3663A, and 3664, but they apply in different scenarios.

Under the MVRA, restitution is mandatory for qualifying offenses listed in 18 U.S.C. § 3663A(c), including certain offenses against property and violations of 21 U.S.C. § 856(a), but not federal drug-trafficking convictions generally. Both the MVRA and VWPA identify the covered offenses that qualify for restitution.

Under the MVRA and VWPA, the covered offenses include:

• Certain offenses against property, including violations of 21 U.S.C. § 856(a), and other offenses listed in 18 U.S.C. § 3663A(c), when an identifiable victim suffers physical injury or pecuniary loss.

The MVRA and VWPA specifically list covered offenses under:

• 18 U.S.C. § 3663A(c)

Under the MVRA, if any of the offenses listed in 18 U.S.C. § 3663A(c) are involved, courts must order restitution based on the applicable statute. Specifically, under the MVRA:

• While prosecutors must identify the victims, the victims may not need to affirmatively prove their losses if they were direct and a predictable consequence of the crime.
• Under the MVRA, courts generally must order full restitution for qualifying losses, while the defendant’s financial circumstances affect the payment schedule rather than the amount of restitution.

Under the MVRA or VWPA, when a federal judge determines that a federal criminal offense has been committed, the judge may either:

• Order the defendant to pay restitution, or
• Decline to order restitution, either because:
• The drug case defendant does not have any ability to pay, or
• The drug case defendant’s criminal acts did not cause the victim(s) to suffer the financial losses of a qualifying nature under the VWPA (or MVRA).

Even under these circumstances, the federal judge must then determine whether any other penalties including criminal fines and/or forfeitures need to be assessed.

What can a Defendant Challenge about Federal Drug Restitution at Sentencing or Afterward?

Restitution is a common focal point of dispute in federal sentencing hearings for a variety of reasons. Defendants often attempt to challenge some aspect of restitution, such as the identity and nature of the restitution victim(s) or the amount of the compensable pecuniary loss suffered by the restitution victim(s). Modification of restitution orders may likewise raise various litigation issues, although the research provided here does not identify any specific issues involving the modification of restitution orders.

While the research did not establish a general procedure for federal restitution forgiveness, these appear to be matters that can be addressed during plea negotiations between the prosecution and the defense.

Likewise, the research did not establish that defendants can negotiate restitution in a manner that is independent of the terms of their plea. However, the provided research indicates that defendants and prosecutors can negotiate for the purpose of reducing restitution obligations during plea negotiations. This may include negotiating for the forfeiture of seized assets, for the denial of restitutory payment, or for specific forms of restitution that are less burdensome.

Additionally, plea negotiations may address restitution issues that could be subject to review by a federal judge prior to the court’s approval of a plea agreement.

However, all issues related to restitution are subject to the federal judge’s authority to order appropriate restitution obligations.

A defendant who has already been sentenced must generally establish “substantial justification” to be eligible for restitution modification, but this does not, per se, preclude defendants from attempting to request modification or other forms of restitution relief if it is warranted under the law.

Defendants have limited grounds for challenging restitution obligations, and defendants who failed to raise objections during sentencing may be barred from seeking to assert new restitution-related defenses in post-sentencing appeals, depending on the specific circumstances involved.

If federal agents are at your door, the firm's advice is the same as every defense lawyer's: say you want your lawyer, then stop talking.

How Do Incarceration, Disability, or Unemployment Affect Restitution Payments?

Under the MVRA, a drug case defendant’s inability to pay a court-ordered restitution amount does not eliminate the requirement that the defendant pay restitution. Instead, if the defendant is required to pay restitution under the MVRA, the defendant’s financial circumstances initially affect the defendant’s restitution payment schedule rather than the defendant’s obligation to pay restitution.

In other words, when judges apply the MVRA, a drug case defendant’s ability to pay will generally affect (but not determine) the timing of when the defendant must pay restitution in a federal drug case.

While courts will generally abide by the restitution payment schedules they issue unless a defendant has sufficient legal grounds to request modification, courts may also adjust restitution payment schedules when a drug case defendant’s ability to pay changes, or when other legal justifications apply.

Additionally, defendants who are subject to the MVRA may be eligible to have their restitution payment schedules modified for a variety of reasons. Under 18 U.S.C. § 3664(k), a court may adjust a restitution payment schedule after a material change in the defendant’s economic circumstances, but the statute does not authorize reducing the restitution amount merely because the defendant is unable to pay.

In general, while the defendant’s ability to pay is a relevant consideration for various restitution-related issues, courts will not generally reduce the amount of restitution that a drug case defendant is required to pay. Furthermore, criminal fines are typically assessed without regard to a defendant’s ability to pay restitution, although the defendant’s ability to pay can be a relevant factor when determining the amount of fines and other penalties a defendant is required to pay.

Finally, a modification to a defendant’s payment schedule does not necessarily mean that the amount of restitution the defendant is required to pay has been reduced, as a defendant’s payment schedule can change without reducing the amount of the underlying restitution obligation.

When Does Federal Restitution Collection End, and What Property or Codefendants Remain Involved?

In general, the enforcement of a restitution obligation lasts twenty years from the entry of a judgment or release from incarceration, with the latter occurring later in most cases. According to the supplied research, this is an absolute twenty-year limit that a court cannot extend, and, following this twenty-year period, no restitution liability remains under the relevant statute.

The twenty-year period for collecting restitution begins from the entry of judgment or the release from incarceration, depending on which occurs later. Defendants’ restitution payment schedules will reflect their individual circumstances. However, while a restitution payment schedule may only last for a limited number of years, the government can seek to enforce payment of any restitution liability up to twenty years from the date on which the twenty-year period begins.

Under 18 U.S.C. § 3664(h) and the MVRA (which incorporates 18 U.S.C. § 3664), federal judges can impose joint-and-several restitution liability on multiple defendants in a criminal case. This means the judge may order defendants to pay restitution “jointly and severally,” as well as imposing separate limits as to each defendant’s liability.

When judges impose joint-and-several restitution liability, they will generally consider all pertinent factors including any information that is available concerning each defendant’s ability to pay. In particular, federal judges must consider:

• The court may make each defendant liable for the full amount of restitution or apportion liability to reflect each defendant’s level of contribution to the victim’s loss and economic circumstances.
• Each defendant’s ability to pay, to the extent that the judge imposes joint-and-several restitution liability based on the factors above.

Even in the case of joint-and-several liability, each defendant’s right to restitution modification is protected to the extent that such a right is granted by federal law. However, modifications to one defendant’s liability will not, per se, affect the liability of other defendants who are subject to the same restitution order.

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Every case turns on its own facts, and general information is no substitute for advice about yours. Todd Spodek, managing partner of Spodek Law Group, and the firm's attorneys defend federal criminal and white collar matters nationwide. Reach the firm at 888 348 8028.