United States District Court, D. Connecticut
ORDER DISMISSING INDICTMENT INCLUDING RESTITUION AND
JEFFREY ALKER MEYER UNITED STATES DISTRICT JUDGE.
Robert E. Lee pleaded guilty to five counts of wire fraud. He
was sentenced to a term of imprisonment and subject to orders
of restitution and forfeiture. While his appeal was pending,
defendant passed away from cancer. The Second Circuit vacated
the judgment and instructed me to dismiss the indictment with
respect to the sentences of imprisonment, supervised, release
and a fine, as well as to consider whether the orders of
restitution and forfeiture should survive defendant's
death. Doc. #72.
estate now seeks abatement of both the forfeiture and
restitution orders; the Government does not object to
dismissal of the forfeiture order but argues that the Court
should not vacate its restitution order. Because the
restitution order is predicated on a conviction that the
Second Circuit has now vacated, I conclude (reluctantly) that
the criminal restitution order that I entered against
defendant in this action must also be dismissed. Accordingly,
I will dismiss the indictment in all respects.
January 2011 and March 2014, defendant defrauded investors by
operating a classic “Ponzi scheme” of raking in
money from investors to pay off other investors until the
entire scheme collapsed. In December 2014, defendant pleaded
guilty to five counts of wire fraud in violation of 18 U.S.C.
§ 1343. I sentenced him to 63 months in prison followed
by 36 months of supervised release, a $10, 000 criminal fine,
$359, 001.24 in criminal forfeiture, and $1, 150, 815.57 in
restitution. He then appealed his sentence to the Second
his appeal was pending, defendant died from cancer. Absent
objection by the Government, the Second Circuit vacated the
judgment, and remanded the matter to me with instructions to
dismiss the indictment with respect to the orders of
imprisonment, supervised release, and a fine, and also to
consider, if necessary, whether the orders of restitution and
forfeiture should survive even though defendant died during
the pendency of the appeal. Doc. #72.
death of a federal criminal defendant while his direct appeal
is pending ordinarily “abates not only the appeal but
also all proceedings had in the prosecution from its
inception.” United States v. Wright, 160 F.3d
905, 908 (2d Cir. 1998). Two ideas have been advanced to
justify the abatement rule: “First, the interests of
justice ordinarily require that [a defendant] not stand
convicted without resolution of the merits of an appeal. . .
. Second, to the extent that the judgment of conviction
orders incarceration or other sanctions that are designed to
punish the defendant, that purpose can no longer be
Second Circuit has yet to decide whether the abatement rule
not only invalidates a defendant's conviction but also
extends to invalidate any accompanying order of criminal
restitution. See Id. at 909 (reserving decision on
this issue). In the meantime, other federal appeals courts
have split on this issue. See United States v.
Volpendesto, 755 F.3d 448, 453 (7th Cir. 2014)
(collecting cases). Some courts hold that a restitution order
should survive a defendant's death during appeal, because
“restitution is intended to compensate victims much
like a civil judgment, ” such that these courts
“do not see restitution as part of the offender's
punishment.” Ibid. (citing cases). By
contrast, other courts reason that a court's authority to
enter a restitution order stems only from the fact of a
conviction in the first instance; if the conviction itself
abates, the restitution order must likewise abate, and
“the fact that criminal restitution serves a
compensatory purpose does not enable it to be imposed in the
absence of a final conviction.” Id. at 454.
light of the fact that the Second Circuit has vacated
defendant's conviction, I agree with the latter view-that
the restitution order must abate as well. “Federal
courts have no inherent power to order restitution.”
United States v. Zangari, 677 F.3d 86, 91 (2d Cir.
2012). Instead, a court's power to order restitution
“depends upon, and is necessarily circumscribed by,
statute.” Ibid. Because the order of
restitution in this case rested on the Mandatory Victims
Restitution Act, 18 U.S.C. § 3663A-a statute that
operates only on the basis of the entry of a valid
conviction-my restitution order pursuant to that statute
cannot survive once the conviction no longer does so. Cf.
Wright, 160 F.3d at 908-09 (declining to decide the
issue but noting that “the analytical underpinnings of
such a proposed accommodation [to allow for survival of
restitution order] are not entirely clear to us, since there
is no civil judgment against Leslie [the deceased defendant],
and once the conviction is vacated there would seem to be no
foundation for the order of restitution”).
sake of defendant's many victims, I regret vacating the
restitution order. Nevertheless, as the Government notes in
its briefing, it has filed civil actions to continue to
pursue the restitution interests of the victims. See
United States v. $358, 077.17, 3:14-cv-1759 (JAM);
United States v. $465, 789.31, 3:15-cv-1353 (JAM).
foregoing reasons, the indictment is ...