Wednesday, February 05, 2014

Restitution Order Reversed

US v. Freeman:  Robert Freeman received a conviction for obstructing federal bankruptcy proceedings.  As part of his sentence, he was ordered to pay restitution to four people that took out loans to support his ministry business.  However, these four “purported victims” were not specifically victims of Mr. Freeman’s act of obstruction. These folks took out loans to support Mr. Freeman’s ministries, which he then used to finance luxury cars and a home, though these individuals did not have the resources to repay their debts.  

The district court failed to cite a statutory basis for the restitution award, but noted that it would not impose a fine as part of Mr. Freeman’s sentence because it imposed the restitution.  It actually imposed restitution as a condition of the defendant’s supervised release.

The Fourth Circuit reviews restitution awards for an abuse of discretion.  The district court’s discretion to order restitution depends upon statutory, not inherent, authority.  The Fourth Circuit picked out four possible statutory provisions which could have served the basis for the imposed restitution, including as a part of Mr. Freeman’s supervised release, under 18 U.S.C. sect. 3563(b).  This statute, according to the Fourth Circuit, required that victims could be victims only of the offense of conviction.   As these folks were not victims of Mr. Freeman’s obstruction of the bankruptcy proceedings, they were not victims who could receive restitution here.  Accordingly, the Fourth Circuit panel reversed and remanded.

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