What Happens if I Don’t Pay Restitution in Federal Court?

What happens if you are sentenced in federal court and don’t pay restitution that is ordered as part of your sentence?

Whether you are released on community supervision after a prison sentence or serving probation, payment of court-ordered restitution may be a condition of your sentence. If you don’t pay the restitution, the Court may have several options including revoking your supervised release or probation, holding you in contempt of court, or converting your restitution amount to a civil judgment against you.

What if the Court tries to put you in jail for failing to pay restitution 20 years after your conviction and after you have completed your sentence?

What Happens if I Don’t Pay Restitution?

Federal law requires the court to order restitution in cases where there was a loss of property or bodily injury to a victim. If the restitution cannot be paid in a lump sum by the defendant, payments are usually made while the defendant is serving probation or supervised release.

Mandatory Restitution in Federal Court

Pursuant to 18 USC Section 3663(A), restitution is mandatory in certain types of cases in federal court, including white collar crimes that involve fraud or deceit:

(c)(1) This section shall apply in all sentencing proceedings for convictions of, or plea agreements relating to charges for, any offense—

(A) that is—

(i) a crime of violence, as defined in section 16;

(ii) an offense against property under this title, or under section 416(a) of the Controlled Substances Act (21 U.S.C. 856(a)), including any offense committed by fraud or deceit;

(iii) an offense described in section 1365 (relating to tampering with consumer products); or

(iv) an offense under section 670 (relating to theft of medical products); and

(B) in which an identifiable victim or victims has suffered a physical injury or pecuniary loss.

In a white collar fraud case, restitution will include the return of property or money that was taken, including any appreciation of the funds between the time of the offense and the time of conviction:

(b) The order of restitution shall require that such defendant—

(1) in the case of an offense resulting in damage to or loss or destruction of property of a victim of the offense—

(A) return the property to the owner of the property or someone designated by the owner; or

(B) if return of the property under subparagraph (A) is impossible, impracticable, or inadequate, pay an amount equal to—

(i) the greater of—

(I) the value of the property on the date of the damage, loss, or destruction; or

(II) the value of the property on the date of sentencing, less

(ii) the value (as of the date the property is returned) of any part of the property that is returned.

Restitution may also involve reimbursing a victim for other expenses they incurred as a result of the criminal case:

(4) in any case, reimburse the victim for lost income and necessary child care, transportation, and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.

What if Your Conviction was 20 Years Ago?

Once you’ve been released from prison and completed supervised release, your court case is over, right? What if you did not finish paying the court-ordered restitution?

Prosecutors in an Oregon case are asking the court to put a former defendant in jail, although his conviction was 20 years ago and he has completed his sentence:

Assistant U.S. Attorney Kathleen L. Bickers says Michael L. Myatt, a Beaverton fund manager who was convicted of fraud, was ordered at sentencing to pay $1.7 million in restitution with interest. He now owes more than $3 million. He stopped making his monthly payments of $8,000 in March 2018, despite his “substantial resources,” she said.

“Defendant’s willful failure to pay restitution despite possessing the apparent means to do so compels his re-sentencing to additional imprisonment in order to address his own misconduct as well as to deter other defendants from engaging in similar behavior,’’ Bickers wrote to the court.

Can someone be “resentenced” based on their failure to pay restitution, after they have completed their sentence?

Can My Probation Be Revoked if I Don’t Pay Restitution?

One remedy courts may have is a probation revocation. If you are serving probation or supervised release and a condition of your sentence was to pay restitution, you may be violating the terms and conditions of your probation by not paying the court-ordered restitution. On the other hand, if you can demonstrate that you are unable to pay the restitution, your probation cannot be revoked solely for failure to pay. A violation for failure to pay must be willful.

If your probation or supervised release is revoked, you could be sent back to prison to serve any remaining time on your sentence. But what if, as in the Oregon case above, you have already served your sentence and completed your supervised release?

Wouldn’t that be additional time based on facts that were not determined by the jury (see U.S. v. Haymond)? If the defendant has served his time and completed supervised release, there is no remaining time for him to serve on his sentence. If his supervised release is finished and over, there is no supervised release for the court to revoke.

The court would be sentencing the former defendant to additional time in a case that has already been closed. Which brings us back to U.S. v. Haymond – would the court be sentencing him to additional time based on facts that were not determined by a jury?

Can I Be Held in Contempt of Court if I Don’t Pay Restitution?

One thing courts can do is hold a defendant in contempt of court for willful failure to pay court-ordered restitution.

A court can hold a person in criminal contempt of court – a determinate sentence based on their failure to follow the court’s order, or a court can hold a person in civil contempt of court – once they pay the money, they are released.

In either case, as with a probation revocation, the failure to pay must be willful – in the Oregon case, the prosecutors noted that the former defendant has a substantial income, substantial resources, two homes, two cars, and a “record of high-end purchases.” They claim that he had the resources to pay, and instead chose to just stop making the payments.

Can I Be Sued if I Don’t Pay Restitution?

Another option is a civil lawsuit filed by the victims in the case, or the defendant and victims could agree to convert the unpaid restitution into a civil judgment.

In cases where a defendant clearly does not have the means to pay restitution as ordered, the court is likely to convert the restitution into a civil judgment that the victims can collect once you do have the resources to pay.

But, if you clearly do have the means to pay and choose not to, you can bet that prosecutors and the court will do everything they can to make you pay and to punish you if you do not…

Federal Appellate Attorney in Columbia, SC

Elizabeth Franklin-Best is a federal white collar criminal defense and federal appeals lawyer located in Columbia, SC.

For more information, call us at (803) 331-3421 or send us an email to set up a consultation about your case.