United States District Court, D. Connecticut
RULING RE: UNITED STATES' MOTION FOR DISBURSEMENT
OF FUNDS (DOC. NO. 155)
C. Hall United States District Judge.
April 20, 2005, defendant Stephen P. Corso
("Corso") entered a plea of guilty to one count of
wire fraud in violation of section 1343 of title 18 of the
United States Code and one count of attempted income tax
evasion in violation of section 7201 of title 26 of the
United States Code. See Minute Entry (Doc. No. 9).
Four years later, on February 3, 2009, the court sentenced
Corso to a term of imprisonment to be followed by supervised
release, and imposed a restitution obligation of $5, 446,
735. See Judgment (Doc. No. 73). A separate
Restitution Order entered shortly after Corso's
sentencing proceeding specifying the amount of restitution
Corso owes to individual victims, as well as the schedule on
which Corso is obligated to make restitution payments.
See Restitution Order (Doc. No. 74).
February 17, 2016, the United States filed the Motion now
pending before the court, which asks the court to disburse
funds currently held in the Registry of the Court to
individual victims pursuant to the Restitution Order.
See United States' Mot. for Disbursement of
Funds ("Mot. to Disburse") at 1-2 (Doc. No. 155).
The funds in the Registry of the Court come from a variety of
sources, including restitution payments made by Corso and the
government's garnishment in September 2014, of a
"previously undisclosed financial account."
Id. at 2. All told, there is $597,
496.06 in the Registry of the Court available for
distribution. These funds were being held by the court while
the government worked on obtaining "additional contact
information for the remaining victims." Id. The
pending Motion states that the necessary information has been
compiled, with the result that the government now seeks to
have these funds distributed. See id. at 3.
the pending Motion primarily seeks to have the funds in the
Registry of the Court distributed to Corso's victims
pursuant to the Restitution Order, the government has also
asked "that this Court acknowledge and prioritize . . .
child support arrearage" due to Corso's former
spouse, Beth Ann Corso ("Mrs. Corso"). Id.
The government states that section 3205(c)(8) of title 28 of
the United States Code, which provides that "[j]udicial
orders and garnishments for the support of a person shall
have priority over a writ of garnishment issued under this
section, " grants priority to child support payments
owed to Mrs. Corso over payments of restitution to
Corso's victims under the Restitution Order. See
Mot. to Disburse at 2-3 (Doc. No. 155). The government
represented that child support arrearages of $13, 567.94 were
owed to Mrs. Corso as of February 17, 2016, pursuant to
Orders entered by state courts in California and Connecticut.
See id. at 2.
receiving the government's Motion, the court ordered
Corso to show cause why the Motion should not be granted.
See Order to Show Cause (Doc. No. 156). In a brief
response, Corso disputed that there is any past-due child
support owed, but otherwise "agree[d] with the
government's general proposition that the garnished funds
at issue should be applied first to outstanding support
obligations (if any), and the balance used toward
[Corso's] restitution obligation." Def.'s Resp.
to Order to Show Cause Re: Gov't Mot. for Disbursement of
Funds ("Corso Resp.") at 1 (Doc. No. 157).
the court ordered Corso to show cause why the
government's Motion should not be granted, the court
received a series of letters from Mrs. Corso. See
Letter from Beth Ann Corso to Judge Hall ("Mrs. Corso
Letter #1") (Doc. No. 158-1); Letter from Beth Ann Corso
to Judge Hall ("Mrs. Corso Letter #2") (Doc. No.
165); Letter from Beth Ann Corso to Judge Hall ("Mrs.
Corso Letter #3") (Doc. No. 166). In these letters, Mrs.
Corso principally asserts that she is entitled not just to a
priority distribution of funds to cover past-due child
support payments, but that she is also entitled to a priority
distribution of funds to cover alimony arrearages.
See Mrs. Corso Letter #1 at 1-2 (Doc. No. 158-1). As
of March 14, 2016, Mrs. Corso was owed $200, 482.01 in
past-due alimony payments, as well as additional sums for
property settlement arrearages, unreimbursed medical bills,
and attorneys' fees. See Order of Danbury
Superior Court (Doc. No. 166-1); see also Mrs. Corso
Letter #3 (Doc. No. 166) (stating that Mrs. Corso is owed a
total of $262, 268.01).
court construed Mrs. Corso's first letter as a Motion to
Intervene and ordered Corso and the government to show cause
why her Motion should not be granted. See Order to Show
Cause (Doc. No. 159). In response, the government argued that
Mrs. Corso could participate in this action as an
"interested party" pursuant to section 3202(c) of
title 28 of the United States Code and that, as a result, it
was unnecessary to allow Mrs. Corso to intervene.
See United States' Resp. to Order to Show Cause
("Gov't Resp.") at 3 (Doc. No. 160). In that
same filing, the government argued that Mrs. Corso's
alimony arrearages should not be afforded priority over
restitution payments to Corso's victims. See id.
at 4. After due consideration, the court accepted the
government's argument and granted Mrs. Corso status as an
"interested party" in this action. See
Order (Doc. No. 161).
April 14, 2016, the court held a hearing on the pending
Motion to Disburse Funds. See Minute Entry (Doc. No.
173). Counsel for both the government and Corso were present
and participated in the hearing, as did Mrs. Corso, who
appeared pro se. See id. At the close of
the hearing, the court took the government's Motion under
reasons that follow, the court now GRANTS the Motion for
Disbursement of Funds (Doc. No. 155), and orders that the
full sum held in the Registry of the Court be distributed to
Corso's victims pursuant to the Restitution Order entered
in this case. See Restitution Order (Doc. No. 74).
Although the court is sympathetic to Mrs. Corso's plight,
the court concludes that she is not entitled to a priority
distribution of funds to cover child support or alimony
arrearages under federal law. The victims who are still owed
restitution as identified in the Restitution Order are: D. &
S. Patrick; K. Mansour; J. & R. Barber; C. Souki; P. Kessler;
M. Hadid; A. & Robin Burditt; the Internal Revenue Service;
the State of Connecticut; and substitute victim Executive
Risk Indemnity Inc. See Restitution Order (Doc. No.
the government's Motion for Disbursement of Funds invokes
section 3205(c)(8) of title 28 of the United States Code-part
of the Federal Debt Collection Procedures Act
("FDCPA"), see Mot. to Disburse at 1 (Doc.
No. 155)-the liability at issue in this case arose under the
Mandatory Victims Restitution Act ("MVRA") which,
among other things, makes restitution mandatory in cases
"in which an identifiable victim or victims has suffered
a physical injury or pecuniary loss." 18 U.S.C. §
3663A(a)(1), (c)(1)(B). Federal law makes clear that the
government may enforce restitution orders entered pursuant to
the MVRA "in accordance with the practices and
procedures for the enforcement of a civil judgment under
Federal law or State law." 18 U.S.C. § 3613(a),
(f); see also 18 U.S.C. §
3664(m)(1)(A)(i)-(ii). In other words, "the government
is authorized to enforce any restitution order imposed as
part of a criminal sentence by using its authority under
FDCPA." United States v. Cohan, 798 F.3d 84, 89
(2d Cir. 2015).
the FDCPA is a tool that the government may use when seeking
to enforce an order of restitution entered pursuant to the
MVRA, the FDCPA itself makes clear that, in the event a
provision of the FDCPA conflicts with the MVRA, it is the
MVRA that governs. See 28 U.S.C. § 3001(b)
("To the extent that another Federal law specifies
procedures for recovering on a claim or a judgment for a debt
arising under such law, those procedures shall apply to such
claim or judgment to the extent those procedures are
inconsistent with this chapter."); see also 28
U.S.C. § 3003(b)(2) (noting that the FDCPA "shall
not be construed to curtail or limit the right of the United
States under any other Federal law or any State law . . . to
collect any fine, penalty, assessment, restitution, or
forfeiture arising in a criminal case"); United
States v. Elashi, 789 F.3d 547, 553 (5th Cir. 2015)
("Thus, when the FDCPA's procedures conflict with
the procedures laid out in another federal law, it is the
other procedures-here, the procedures in the MVRA-that must
the plain text of the MVRA makes clear that, in the event the
MVRA conflicts with any other federal law, the MVRA must
prevail. See 18 U.S.C. § 3613(a), (f)
("Notwithstanding any other Federal law . . . a judgment
imposing [an order of restitution may be enforced against all
property or rights to property of the person fined . . .
."); Elashi, 789 F.3d at 552 (noting that
"[t]his court has interpreted this
‘notwithstanding' clause as signaling a clear
Congressional intent to override conflicting federal
law" (internal quotations, alterations, and citation
omitted)); see also Cisneros v. Alpine Ridge Group,
508 U.S. 10, 18 (1993) ("As we have noted previously in
construing statutes, the use of such a