Ninth Circuit Expands Reach of Restitution Orders
In United States v. Harris, No. 16-10152 (9th Cir. Apr. 20, 2017), the Ninth Circuit considered whether distributions from an irrevocable, discretionary trust may be garnished to satisfy a restitution order. Michael Harris was convicted of charges relating to theft from an employee benefit plan. He was sentenced to 30 months in prison and ordered […]
In United States v. Harris, No. 16-10152 (9th Cir. Apr. 20, 2017), the Ninth Circuit considered whether distributions from an irrevocable, discretionary trust may be garnished to satisfy a restitution order. Michael Harris was convicted of charges relating to theft from an employee benefit plan. He was sentenced to 30 months in prison and ordered to pay $646,000 in restitution. Years after completing his prison sentence, Mr. Harris had paid only a fraction of the restitution. As a result, the government applied for a writ of garnishment for any money or property Mr. Harris received as the beneficiary of two irrevocable, discretionary trusts that Mr. Harris’s parents established for his support. Although Mr. Harris largely disclaimed his interest in the trusts, the government nevertheless argued the trustees should be ordered to make restitution payments to the United States in the event the trustees made any distributions of trust property to Mr. Harris.
The court found Mr. Harris’s interest in the trusts was subject to garnishment for two reasons. First, although the trust documents stated the trustees had total discretion in deciding whether to make any distributions to Mr. Harris, under state law Mr. Harris could nevertheless petition a court for an order compelling a distribution if a trustee abused their discretion. Second, under federal law, once the trusts created a property interest in favor of Mr. Harris, his disclaimer under state law could not defeat the attachment of the writ of garnishment.
In United States v. Johnson, No. 15-30350 (Apr. 21, 2017), the Ninth Circuit determined whether a court may order restitution for uncharged misconduct. A jury convicted Donald Johnson of wire fraud. He was sentenced to five years of probation and ordered to pay $5,648.50 in restitution. The criminal conduct for which Mr. Johnson was convicted largely occurred in the state of Montana. However, this conduct was part of a larger fraudulent scheme in which Mr. Johnson made false claims about being a Grammy-nominated musician. The scheme reached individuals in Florida and Washington.
When crafting the restitution order, the district court concluded it could consider only the loss that resulted from the conduct for which Mr. Johnson was convicted. The government, however, argued that the district court should order restitution for Mr. Johnson’s entire scheme. In its opinion, the Ninth Circuit sided with the government and concluded that a district court may order restitution for all victims harmed by a fraudulent scheme, including those harmed by conduct beyond the count of conviction. However, the court stated the conduct must be “sufficiently related” to the overall scheme to defraud.
Each of these opinions show the importance of working with a qualified Oregon criminal defense attorney. Restitution is frequently given less attention than other terms of a sentence, but it can have a tremendous impact long after an individual completes their sentence.