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SCOTUS Holds Restitution Is Criminal Sanction – Update for January 26, 2026

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CAPTAIN OBVIOUS SAYS RESTITUTION IS CRIMINAL PUNISHMENT

The ruling was short, simple, unanimous, and transpicuous to any federal defendant: last week, the Supreme Court ruled that restitution is a criminal penalty and not just some random civil judgment.

Thirty years ago, Holsey Ellingburg, Jr. robbed a Georgia bank with a sawed-off shotgun. He was convicted after a jury trial of 18 USC § 2113(a) and robbery and 18 USC § 924(c) using a firearm during a crime of violence.

Holsey served about 27 years in prison. By the time he got out in 2022, he had paid about $2,200 toward his $7,600 restitution obligation for the money he stole. His probation officer demanded that Holsey keep paying after his release. Holsey argued he didn’t have to.

Holsey’s restitution obligation arose under the Victim and Witness Protection Act of 1982. The VWPA only let courts collect restitution for 20 years after the judgment was entered, meaning that Holsey’s restitution obligation ended in about 2016. But sometime after Hosley’s robbery, Congress passed the Mandatory Victims Restitution Act. The MVRA extended a defendant’s obligation to pay restitution to “20 years after release from imprisonment.”

Holsey argued that the Constitution’s Ex Post Facto Clause of Article I, Section 9 of the Constitution applies to restitution orders. The Ex Post Facto Clause prohibits applying a new law that retrospectively criminalizes actions that were legal when committed or changes the punishment prescribed for a crime. The Government said restitution is not a criminal penalty but rather just a civil judgment to make a victim whole, so the MVRA could be applied to Holsey’s restitution obligation, even though it arose before the MVRA passed.

Last week, the Supreme Court disposed of the Government’s claim in a short 9-0 decision. Justice Kavanaugh wrote that “[r]estitution under the MVRA is plainly criminal punishment… Whether a law violates the Ex Post Facto Clause requires evaluating whether the law imposes a criminal or penal sanction as opposed to a civil remedy… When viewed as a whole, the MVRA makes abundantly clear that restitution is criminal punishment. The MVRA labels restitution as a “penalty” for a criminal “offense… Only a criminal defendant convicted of a qualifying crime may be ordered to pay restitution. Restitution is imposed at sentencing for that offense together with other criminal punishments such as imprisonment and fines. And at the sentencing proceeding where restitution is imposed, the Government, not the victim, is the party adverse to the defendant.”

Writing in the Sentencing Matters Substack on Ellingburg last fall, law professor Lula Hagos observed that

[c]riminal restitution — the money paid by a defendant to a victim — has grown into one of the most troubling, yet least examined, features of modern criminal sentencing… Restitution has quietly grown — both in scope and severity — into a sanction that can extend punishment for years, frequently without compensating victims… The Court will not be able to solve all criminal restitution’s woes in Ellingburg. But it should take the crucial step of acknowledging that criminal restitution is punishment subject to the Ex Post Facto Clause. Acknowledging restitution’s punitive nature would bring coherence to constitutional doctrine and prevent the government from imposing punishment without its safeguards…

As it is now, many Circuits hold that restitution cannot be challenged in a § 2255 motion because it is not a criminal sanction. Restitution is often imposed after the sentencing hearing in proceedings where the defendant is not present. The proofs needed to establish restitution are often quite thin. Ellingburg has the potential to change much of that.

 

Ellingburg v. United States, Case No 24-482, 2026 U.S. LEXIS 504 (January 20, 2026)

Substack, Punishment by Another Name (October 13, 2025)

~ Thomas L. Root

NACDL Releases Badly-Needed Federal Restitution Study – Update for September 26, 2025

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We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.

NO ONE CARES ABOUT RESTITUTION… UNTIL THEY DO

Neither fish nor fowl, restitution has long been considered to be remedial – intended to make victims whole – rather than punishment. And many defendants who receive a restitution order pay little attention to it because they are much more fixated on the amount they are getting the enormous amount they will be ordered to pay someday.

Unfortunately, someday always comes, leaving defendants struggling in many cases with restitution that has nothing to do with what they can afford, how much they made from the offense, or even the losses of the victims.

Last week, the National Association of Criminal Defense Attorneys published a report on federal restitution that was detailed, surprising, and insightful. The report found that $110 billion of federal restitution debt remains outstanding, with a full $100 billion of that being deemed “uncollectible.” The average amount of a federal criminal restitution order is more than $3.3 million, including not the “full amount” of a victim’s losses, but often includes calculations of pre-and post-judgment interest as well. In 30% of restitution orders, the victims incurred no loss but are entitled to repayment anyway.

Restitution hearings can be held after sentencing hearings, and not every circuit recognizes a defendant’s right to be present at those restitution hearings (although a pending Supreme Court case, Ellingburg v. United States, may have something to say about that). Courts do not have to apportion liability among defendants; when defendants are found “jointly and severally liable,” each defendant is legally responsible for the full amount of the victim’s losses.

Just last week, the 3rd Circuit ruled that a restitution order where the defendant had stolen from two gun stores was flawed because the stores were awarded the value of the guns and lost sales income from the guns as well.

The NACDL study recommended that Congress and the Supreme Court should recognize that a restitution hearing is part of the sentencing process and therefore is a “critical stage” in the criminal legal process at which the defendant has a right to be present, that because a sentencing is focused on incarceration, a separate restitution hearing should be required to specifically address how much restitution should be ordered and to whom.

The study also argued that federal restitution statutes should be amended to require judges to consider a defendant’s ability to pay, and when payment is ordered, defendants should only be required to reimburse actual losses. The study proposed that joint and several liability should be eliminated.

The chance for any constructive criminal justice legislation with this President and this Congress is minimal. Just last night, we saw the DOJ used on the direct order of the President to charge one of his political enemies. So don’t expect any defendant-friendly changes in the law any time soon, even if they make perfect sense.

Still, the 46-page study, well-crafted and meticulously documented, is worth the download.

NACDL, Empty Pockets and Empty Promises: How Federal Restitution Law Fails Everyone (September 16, 2025)

Ellingburg v. United States, Case No. 24-482 (oral argument October 14, 2025)

United States v. McCormack, Case No. 24-2500, 2025 U.S. App. LEXIS 24139 (3d Cir. September 18, 2025)

 

~ Thomas L. Root

District Court Can Come For You Well After You Think It’s Over – Update for July 29, 2025

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We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.

PAY THE MAN, SHIRLEY

In 2014, Mikel Mims was convicted of conspiracy to commit wire fraud.  The district court sentenced her to probation and ordered her to pay $255,620 in restitution.  After Mikey completed probation in 2017, she stopped paying restitution despite her still owing about $200,000.

After all, she was beyond her criminal sentence. The court had nothing to hold over her. Right?

Wrong. Five years later, the district court – acting within Mikey’s original criminal case – ordered her to bring her payments current. Citing the Mandatory Victims Restitution Act and the Federal Debt Collection Procedures Act of 1990, the district court concluded that it still had jurisdiction to enforce restitution in the underlying criminal case. The district court ordered Mike to pay up.

Mikel appealed, arguing that she had completed her probation and that the district court no longer had jurisdiction in her original criminal case to order compliance. She contended that she was off scot-free! Two weeks ago, the 11th Circuit disagreed.

No one contested that the district court had jurisdiction over Mike’s underlying criminal offense and could order her to pay restitution as part of her criminal judgment. Starting there, the 11th Circuit applied the ancillary jurisdiction doctrine, which “recognizes federal courts’ jurisdiction over some matters (otherwise beyond their competence) that are incidental to other matters properly before them,” to hold that the district court’s hold on Mikel extended far beyond the end of Mikel’s criminal sentence. 

The ancillary jurisdiction doctrine “enable[s] a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees,” the Circuit ruled.  “We have historically recognized that district courts have “inherent power to enforce compliance with their lawful orders through civil contempt… Here, the district court lawfully entered the restitution order as part of Mims’s criminal judgment… Accordingly, we conclude that the district court had ancillary jurisdiction to enforce the restitution order it had included in Mims’s criminal sentence via the compliance order.”

The district court can’t impose prison time or extend probation in the criminal case. Rather, its enforcement power is limited to the civil contempt power, but the Circuit nonetheless held that the district court can continue to hold sway over a defendant far beyond the end of supervised release or probation.

United States v. Mims, Case No. 22-13215 (11th Cir., July 15, 2025)

~ Thomas L. Root

The Thief As Victim – Update for August 22, 2024

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We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.

PAY THE MAN, SHIRLEY

John O’Hara ripped off his mama.

paytheman240822In February 2019, John pled guilty to wire fraud and bank fraud for stealing over $300,000 from his aged mother, whose finances he was managing. She died a few weeks after his guilty plea – from a broken heart, perhaps? – but she nonetheless passed on leaving her entire estate to her boy John.

At sentencing, the Court ordered John to do 26 months in prison and to pay $332,150 or so in restitution to his mother’s estate. Despite knowing the restitution that John paid to the estate would end up back in his own pocket, the government did not object to the restitution order.

John was released in May 2021 but – contrary to his conditions of supervised release – had paid no restitution since his release from prison. Normally, a supervised releasee would be violated for such a history of noncompliance with release conditions, but the district court was realistic. In May 2023, it issued an order noting that while John had failed for two years “to pay any portion of the restitution as directed by the Court,” still,

inasmuch as the defendant would be the recipient of any restitution he might pay in the future, it is hereby ordered that, within fourteen days, the United States is directed to state its position regarding whether the defendant should be discharged from his existing restitution obligation.

The government suggested that since it couldn’t see the defendant being allowed to pay himself, the Court should substitute the Crime Victims Fund in place of his mother’s estate. John, of course, suggested that the court just forget the whole restitution thing.

The district court ruled that “allowing a perpetrator to effectively receive his own restitution would have the effect of nullifying a court’s restitution order and circumventing Congress’ intent to require mandatory restitution under the Mandatory Victims Restitution Act.” It thus amended the judgment to require John to pay the $332,150 to the Crime Victims Fund.

John appealed, and this week, the 6th Circuit reversed the amended judgment, saying (albeit reluctantly), “Pay the man, Shirley.  And that man is yourself.”

After a court imposes a sentence, the Circuit observed, it has no authority to change the sentence “unless such authority is expressly granted by statute.” Because a restitution order is a part of the sentence, if a court wants to change a restitution order, “it must point to express statutory authorization to do so.”

money240822While 18 USC § 3664 expressly allows modification of restitution order, it lists only “a handful of ways a restitution order may be altered.” It may be amended if the victim’s losses are not ascertainable at sentencing, adjusted due to a defendant’s changed economic circumstances, or modified if the defendant is resentenced.

None of these, the 6th said, apply here, “so the district court could not use them to amend the judgment.”

The Circuit understood the district court’s motivation. “This is a case where a court may be tempted to elide the statute’s text to do what makes practical sense within the spirit and confines of the MVRA,” the appellate court wrote. “But even given the MVRA’s laudable goals, a court does not have discretion to ignore the statutory limits on modifying a final restitution order.”

This is not to say that the courts are without power to deny John his plan to pay himself restitution. The 6th included a detailed footnote observing that Kentucky statute § 381.280(2) excludes people from inheriting the results of their wrongdoing. “We leave the statute’s application to state courts,” the appellate decision states. “We only note that such a statutory scheme seems to fit the occasion and reiterate that it would be in the power of the probate court to apply its terms were the estate to be reopened and receive any money.”

The Circuit’s message: Justice may yet triumph, Mr. O’Hara.

United States v. O’Hara, Case No. 23-5695, 2024 U.S. App. LEXIS 20983 (6th Cir. Aug. 20, 2024)

– Thomas L. Root

The Fine Print Counts In A Deal With the Devil – Update for February 20, 2024

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‘SHUT UP AND SIGN’ LEADS TO A LOT OF BUYER REMORSE

About 95% of all federal indictments end with a plea agreement where the defendant agrees to take a guilty plea in exchange for government promises that often seem evanescent if not illusory. If I had a dime for every prisoner who has told me that he or she only signed because defense counsel said to, I would be writing this on the beach of my private Caribbean island instead of at a desk looking out at February snow in Ohio.

plea161116Two cases decided last week remind all prisoners – including those who have already signed their plea agreements – that in a plea agreement, every promise counts. A defense attorney’s disservice to the client is never greater than when he or she rushes them into signing a “good deal” without first painstakingly walking the defendant through every provision and explaining it in detail.

Eric Rudolph (remember him?) decided to express his political views by blowing up Olympic venues and abortion clinics. The innocents he slaughtered in the process were just icing on his demented cake. After five years on the lam, Eric was caught dining out of a dumpster in Murphy, North Carolina, and was later convicted of one 18 USC § 844(i) arson offense and five companion 18 USC § 924(c) counts for using a firearm (bombs studded with nails qualify under the statute as “firearms”) in the commission of the arson.

Eric’s approach to the plea agreement was unrepentant. He said he had “deprived the government of its goal of sentencing me to death,” and that “the fact that I have entered an agreement with the government is purely a tactical choice on my part and in no way legitimates the moral authority of the government to judge this matter or impute my guilt.”

Uh-huh. Eric’s statement brings to mind old Gus McRae (Lonesome Dove) addressing outlaw Dan Suggs, who was about to be executed with his brother but expressed only hatred and contempt:

Gus McCrae: I’ll say this, Suggs; you’re the kind of man it’s a pleasure to hang. If all you can talk is guff, you can talk it to the Devil.

supermaxcell240220I’m no fan of mandatory life sentences and even less of the death penalty, but it’s amazing how malleable our principles can be when we’re punched in the face with pure-D evil. Eric undeservedly got a life sentence, which he’s spending in the mountains of Colorado (although he never gets to see them from his concrete cell at ADX Florence).

As part of the plea deal he was proud of for depriving the Feds of the death penalty, Eric waived the right to collaterally attack his sentence in any post-conviction proceeding, including under 28 USC § 2255. But because of what the Court disapprovingly calls “the evergreen litigation opportunities introduced by the categorical approach” to § 924(c) litigation,” Eric – who has apparently decided that freedom some day isn’t such a bad goal – has filed two § 2255s so far. Last week, the 11th Circuit turned down his second one as barred by the plea agreement and, in so many words, told Eric to enjoy his place in the mountains for the rest of his life.

In the last few years, courts have applied the Supreme Court’s “categorical” approach to determining whether an offense is a “crime of violence” within the meaning of 18 USC § 924(c)(3)(A), that is, “an offense that is a felony and has as an element the use, attempted use, or threatened use of physical force against the person or property of another.” Even Eric’s district court agreed that after the Supreme Court’s decision in United States v. Davis, his arson offenses were no longer crimes of violence under the federal statute (because one can be convicted of arson for burning down his or her own property). But that didn’t matter, the district court said, because Eric had given away his right to bring a § 2255 motion to correct the error.

Last week, the 11th Circuit agreed. It held that “a plea agreement is, in essence, a contract between the Government and a criminal defendant. And because it functions as a contract, a plea agreement should be interpreted in accord with what the parties intended. In discerning that intent, the court should avoid construing a plea agreement in a way that would deprive the government of the benefit that it has bargained for and obtained in the plea agreement.”

Eric’s plea deal, the 11th said, contained the common waiver of the right to bring a collateral attack on his sentence. But Eric argued that the plea deal only prohibited collateral attacks on the sentence, while his collateral attack was on the § 924(c) convictions.

dumpsterfire249220Eric’s argument was a dumpster fire, the Circuit said. “The text of 28 USC § 2255, the history of that same statute, and the habeas corpus right that it codified, all point in the same direction: 2255 is a vehicle for attacking sentences, not convictions.” Starting with the origins of English habeas corpus through the codification of 2255 up to last summer’s Supreme Court Jones v. Hendrix decision (where SCOTUS said “Congress created 2255 as a separate remedial vehicle specifically designed for federal prisoners’ collateral attacks on their sentences”), the 11th concluded that the history, the plain text of the statute “shows the same, as does Rudolph’s requested relief… [His] motions are collateral attacks on his sentences, so his plea agreements do not allow them.”

Winning his § 2255 would have been a huge deal for Eric. The 18 USC § 844(i) conviction carries a maximum 10-year sentence. Each of the § 924(c) convictions carries a maximum of life. Had Eric been allowed to bring the § 2255, he would have gone from his concrete cell straight to walking the streets (something most of his victims would never enjoy again).

*     *     *

Meanwhile, over in Louisiana, Keesha Dinkins – a front-office worker at Positive Change healthcare clinic – was swept up in a Medicaid billing fraud. She didn’t make a dime from the fraud beyond her normal salary, but her lawyer had her sign a plea agreement for 24 months and restitution of $3.5 million.

positivechange240220Despite the deal she made, she argued that she should not be on the hook to share the restitution equally with Positive Change’s owner (who got a lot more time than she did). Last week, the 5th Circuit told her that it was Positive that it would not Change her restitution:

The criminal justice system in this country relies on plea agreements to provide efficient resolutions to criminal cases. Indeed, over 95 percent of federal criminal cases are resolved without trial. It would undermine the principle that plea bargains are contracts to hold that a party can agree to a specific amount of restitution, supported by record evidence, and then in the next breath, challenge an order imposing that exact amount of restitution.

The 5th observed that her plea agreement provided that “Dinkins — not Positive Change — was responsible for the $3.5 million loss.” That is how the judgment will remain.

Rudolph v. United States, Case No 21-12828, 2024 U.S. App.  LEXIS 3278 (11th Cir., February 12, 2024)

United States v. Johnson, Case No 22-30242, 2024 U.S. App. LEXIS 3487 (5th Cir., February 14, 2024)

– Thomas L. Root

Restitution – A Foretaste of Eternity? – Update for September 16, 2022

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DIAMONDS ARE FOREVER… RESTITUTION JUST SEEMS LIKE IT

The 3rd Circuit last week reminded defendants sentenced in the last 25 years (since 1996), that the Mandatory Victims Restitution Act places a very relaxed limitation on how long the Feds can chase them for money.

restitution170508Michael Norwood successfully argued that his liability for bank robbery restitution arose before the MVRA was passed in 1996. In ruling in his favor, the Circuit noted that the MVRA provides that a defendant’s “liability to pay a fine shall terminate the later of 20 years from the entry of judgment or 20 years after the release from imprisonment of the person fined.” 18 U.S.C. 3613(b). The lien on a defendant’s assets persists as long as he or she is liable to pay.

In short, the 3rd reminded readers, “under the MVRA, a restitution lien never becomes unenforceable, and a defendant’s liability to pay expires not twenty years after entry of the defendant’s judgment, but twenty years after the defendant’s release from imprisonment.”

United States v. Norwood, Case No. 20-3478, 2022 U.S. App. LEXIS 25181 (3rd Cir., September 8, 2022)

– Thomas L. Root

Why Be Precise When a WAG will Do? – Update for October 11, 2019

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THE COURT HAS HEARD THAT GOVERNMENT EXCUSE ON LOSS CALCULATIONS BEFORE

lollipopcost191011For the countless federal criminal defendants whose sentence is driven by a calculation of the amount of loss their offense caused, the excuse of “close enough for government excuse” has special meaning: all too often, the Government gins up some number – often enough, a WAG – and tells the Court that the precise loss figure cannot be calculated, but here’s a “reasonable estimate.”

And of course, the Government reminds the court that “a district court may accept a ‘reasonable estimate’ of the loss based on the evidence presented.” And the court usually goes along with it.

The loss amount is crucial to the defendant, not only because the he or she is going to be ordered to pay that amount in restitution, but because the Guidelines offense level under USSG § 2B1.1(b)(1) –  and the suggested sentencing range – skyrockets with the amount of estimated loss.

That “reasonable estimate” standard has slid over the years to seemingly permit the government to give a “reasonable estimate” (usually heavy in favor of the government) in virtually any case. Steal candy from a baby? The Government will tell the court that all it can do is estimate that the Tootsie Pop was worth $200,000.

Last week, the 11th Circuit pushed back.

Roberta Sheffield was convicted of running an IRS tax scheme that netted unjustified $1,000 tax refunds to a lot of people. At sentencing, the government produced a spreadsheet showing a loss of $3.46 million. Roberta complained that the spreadsheet contained duplicate entries, but she had no list of what entries were wrong. The government admitted there might be some errors, but argued that the burden was on the defendant to prove the spreadsheet wrong.

The 11th Circuit disagreed. It held that “once the government acknowledged that there was in fact some duplication, it could not carry its burden without correcting the spreadsheet.” The Circuit noted that recent studies show 90% of restitution is uncollectible, and that it was unlikely Roberta and her co-conspirators would ever satisfy the award.

broke191011At oral argument, Roberta asserted that the duplicate entries totaled $136,000. The Court noted that the error amounted “to a mere 4% of the government’s proposed total of $3,461,638. So one may wonder why it is that we are reversing a multi-million dollar restitution order when the result on remand is likely to be approximately the same and payment (at least full payment) is unlikely. The reason is a simple one. Ms. Sheffield has the right not to be sentenced on the basis of inaccurate or unreliable information, and is not required to pay restitution she is not responsible for.”

United States v. Sheffield, 2019 U.S. App. LEXIS 29502 (11th Cir. Oct. 1, 2019)

– Thomas L. Root

The Court Giveth, The Court Taketh Away – Update for May 18, 2017

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LISAStatHeader2small
TAKE MY MONEY

cartheft170519Kapelle Simpson-El had, in an earlier life, sold cars. Stolen cars. The feds caught up to him, and he was duly locked up. His sentence included the mandatory restitution obligation, in Kapelle’s case about $433,000.

Kapelle did his time, and after he was released, he dutifully paid at least 5% of his monthly paycheck toward restitution. No surprise there: on supervised release, an offender can be sure that his or her probation officer is first and foremost a collection agent for the court.

It will come as little surprise to anyone who has received Bureau of Prisons medical care that Kapelle, who was injured in prison, received “inadequate medical attention and a lack of treatment” from Health Services. After he got out, Kapelle sued under the Federal Tort Claims Act, and settled with the government for $200,000.

lord170519At that point, the government asked Kapelle’s sentencing judge to modify his restitution payment based on Kapelle’s “material change in economic circumstances.” The government wanted him to turn over the entire $200k for restitution. The district court ordered Kapelle to apply $145,640 of the settlement funds toward restitution.

Under 18 U.S.C. § 3664(k), a court can adjust a restitution order when there is a “material change in the defendant’s economic circumstances that might affect the defendant’s ability to pay restitution.” The district court invoked this authority, reasoning that the settlement funds could affect Kapelle’s ability to pay restitution.

Kapelle appealed, arguing that the settlement was just intended to make up for “a lifetime of lost income.” Earlier this week, the 10th Circuit upheld the shakedown.

The Circuit complained that Kapelle’s “lost income” characterization “rests on a questionable factual foundation, for the settlement might have included some compensation for non-economic harm. After all, the settlement resolved a suit in which Mr. Simpson-El had claimed ‘hedonic damage to his quality of life’ as well as economic loss.” Even if Kapelle was right, the 10th said, the fact that money he would earn in the future was delivered to him now in a lump sum was “time-savings [that] could reasonably be viewed as a material change in economic circumstances.”

lottoThe Circuit panel said the district court properly considered Kapelle’s current economic condition. “The court stated the obvious,” the 10th wrote. “There was now a substantial new fund that had not existed before the time of the settlement. Pointing to the newly created fund, the court relied on a readily apparent change: Before the settlement, Mr. Simpson-El would have had to wait years to earn $200,000; after the settlement, he would immediately recoup $200,000.”

Of course, if Kapelle had earned the $200,000 over 10 or 15 years, he would have paid 5% of that (or $10,000) in restitution on it. Receiving it all at once, he paid at the rate of 72%. Of course, Kapelle’s victims would see no problem with such an outcome, and they would have a point. Still, the math is troubling.

United States v. Simpson-El, Case No. 16-3107 (10th Cir., May 17, 2017)

– Thomas L. Root

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Pay the Man, Shirley – But It’s Not a Sentence – Update for May 8, 2017

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OPPORTUNITY KNOCKS…

For the past 20 years, federal law has required that those convicted of crimes where victims suffer tangible harm pay restitution to those hurt by their conduct.

restitution170508While prosecutors and others of that ilk like to fume that drug offenses – where willing buyers purchase commodities that the government has deemed fit to outlaw from willing sellers – are not victimless, those offenses have thus far been exempted from restitution. But for economic crimes – bank fraud, tax evasion, even where executive misconduct causes a company’s stock price to fall – courts slap defendants with staggering restitution liabilities that affect them long after the sentence is served. Often it’s well deserved, such as where a Ponzi operator has fleeced elderly victims out of life savings. But we have seen cases where the “victims” vehemently denied they were due restitution, but it was ordered anyway.

To defendants, a big restitution judgment may seem like a sentence. It sure did to Zack Dyab. Zack pled guilty in 2010 to a couple of white-collar offenses, wire fraud and money laundering, for which he was sentenced to 10 years and ordered to pay $6.4 million in restitution. Like most people in his position, after his conviction, Zack filed a habeas corpus motion pursuant to 28 USC 2255. And like most people, his 2255 motion failed.

Two years later, the government moved to amend Zack’s restitution to reflect that one of his co-conspirators would be jointly and severally liable for a portion of the obligation, and to update the identities and addresses of some of the people entitled to share in the restitution. Somehow no one served Zack with the government’s motion – a common enough problem for federal inmates, who cannot participate in the federal courts’ electronic filing and service system – and the court issued an amended judgment in due course.

carpe170508Zack did receive a copy of the amended judgment. Being a carpe diem kind of guy, he took the opportunity presented by the amended judgment to file another § 2255 motion, this one claiming his due process rights were violated because he received no notice that the amended judgment was being considered. The district court denied the motion, and last week, the 8th Circuit agreed.

The Circuit held that a § 2255 motion was not the right means of challenging the amended judgment, because § 2255 motions can only be used for claims involving release from custody. Because “a dispute about restitution does not involve a claim of a right to be released from custody,” the Court said, “a prisoner cannot challenge the restitution portion of his sentence under § 2255.”

moneylaundering170508Zack also argued he ought to be allowed to challenge his money-laundering conviction all over again, because that conviction is what led to the restitution order, and there was a fresh judgment on file that he should be able to attack. Noting that “not every change to a judgment results in a new sentence or judgment that wipes clean the slate of post-conviction motions previously filed,” the 8th Circuit disagreed:

We think the district court’s order amending Dyab’s judgment did not result in a new sentence or judgment. There was no substantive proceeding that adjudicated Dyab’s guilt or determined the appropriate punishment. The court did not alter the amount of Dyab’s restitution obligation or otherwise change Dyab’s sanction. The court updated the addresses of certain restitution payees… and reflected that one of Dyab’s co-conspirators… was jointly and severally liable for some of the losses. These actions are not sufficient to create a new sentence or judgment that would permit Dyab to file a successive § 2255 motion.

Dyab v. United States, Case No. 16-1296 (8th Cir., May 4, 2017)

– Thomas L. Root

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