*

The Honorable Avern Cohn, United States District Judge for the Eastern District of Michigan, sitting by

designation.

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 06a0241p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

FEDERAL DEPOSIT INSURANCE CORPORATION,

Plaintiff-Appellant,

v.

RICHARD E. DOVER,

Defendant-Appellee.

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No. 04-6437

Appeal from the United States District Court

for the Eastern District of Tennessee at Knoxville.

No. 03-00210—R. Leon Jordan, District Judge.

Argued: December 1, 2005

Decided and Filed: July 11, 2006 

Before: BOGGS, Chief Judge; BATCHELDER, Circuit Judge; and COHN, District Judge.*

_________________

COUNSEL

ARGUED: Kathleen V. Gunning, FEDERAL DEPOSIT INSURANCE CORPORATION,

Arlington, Virginia, for Appellant. Dean B. Farmer, HODGES, DOUGHTY & CARSON,

Knoxville, Tennessee, for Appellee. ON BRIEF: Kathleen V. Gunning, FEDERAL DEPOSIT

INSURANCE CORPORATION, Arlington, Virginia, for Appellant. Dean B. Farmer, Kristi M.

Davis, HODGES, DOUGHTY & CARSON, Knoxville, Tennessee, for Appellee.

_________________

OPINION _________________

BOGGS, Chief Judge. This is a case of statutory interpretation. The Federal Deposit

Insurance Corporation (“FDIC”) appeals from a grant of summary judgment dismissing the FDIC’s

suit to collect $19.6 million under a criminal restitution order entered pursuant to 18 U.S.C. § 3663,

part of the Victim and Witness Protection Act (“VWPA”) of 1982,. The action was instituted before

the repeal of the Act. The outcome turns on an interpretation of the Act. We reverse in part and

affirm in part and order that summary judgment be entered in favor of the FDIC.

1
No. 04-6437 Federal Deposit Ins. Corp. v. Dover Page 2

1

18 U.S.C. § 3663(h) provides:

(h) An order of restitution may be enforced–

(1) by the United States–

(A) in the manner provided for the collection and payment of fines in subchapter B of chapter 229 of

this title; or

(B) in the same manner as a judgment in a civil action; and

(2) by a victim named in the order to receive the restitution, in the same manner as a judgment in a

civil action.

18 U.S.C. § 3663(h).

I

In 1991, Richard E. Dover (“Dover”), now a resident of Knoxville, pled guilty to two counts

of making a false statement to Sunbelt Federal Savings, in violation of 18 U.S.C. § 1014. The

conduct underlying the offenses to which he pled guilty concluded in 1985. At a sentencing hearing

in 1993, the United States District Court for the Southern District of Texas (“sentencing court”)

sentenced Dover to two years of probation on each count, running concurrently. Under the VWPA,

the sentencing court also entered an order for criminal restitution in the amount of $19,620,928.58.

This was imposed as a “special condition of probation.” The sentencing court ordered further that

restitution payments would constitute payment against a $284 million civil judgment that had been

entered against Dover in 1990 in favor of Sunbelt, and, conversely, payments on the civil judgment

would count as restitution. Restitution was to be paid to the District Court Clerk for disbursement

to the Resolution Trust Corporation (“RTC”), the receiver for the victim.

RTC sold its interest in the civil judgment to Stonehenge/FASA in 1994. In 1995, when

Dover was released from dischargeable debts by a bankruptcy court, he settled this claim with

Stonehenge/FASA for $5,000.

Following the failure of Sunbelt, the FDIC succeeded to the victim’s interest in the

restitution. It is undisputed that, although Section 3663(f) was repealed in 1996, it applies to this

case because Dover was sentenced while it was still in effect.

In 1998, Dover completed his probation. He had not made any restitution payments (save

for the $5,000 settlement, which counts towards the restitution) by this time. The FDIC’s amended

complaint therefore seeks a restitution amount $5,000 lower than that originally sought. 

The United States Attorney’s Office in Knoxville, Tennessee, filed discovery requests in

October 2002 and instituted an action to enforce the restitution of $19.6 million. In January 2003,

the district court granted the FDIC’s motion, unopposed by Dover, to intervene in the action. Three

months later, the FDIC filed a complaint with the district court to recover $19.6 million in restitution

pursuant to 18 U.S.C. § 3663(h), the clause that empowers the victim to pursue enforcement “in the

same manner as a judgment in a civil action.”1

The United States withdrew and the district court permitted the FDIC to proceed in its

parallel action. Pursuant to the order of the district court, the parties filed motions for summary

judgment.

Dover argued that, as a “special condition” of his probation, his obligation to pay restitution

expired at the end of his probation under the time limits set forth in § 3663(f)(2). He also argued

that the release of his civil liability on the $284 million judgment foreclosed the FDIC’s action to

collect restitution. The FDIC argued that, because the sentencing court had ordered Dover’s

restitution payable immediately, not within a specified period or in specified installments, certain
No. 04-6437 Federal Deposit Ins. Corp. v. Dover Page 3

2

18 U.S.C. § 3663(f) provides:

(f)(1) The court may require that such defendant make restitution under this section within a specified

period or in specified installments.

(2) The end of such period or the last such installment shall not be later than–

(A) the end of the period of probation, if probation is ordered;

(B) five years after the end of the term of imprisonment imposed, if the court does not order probation;

and

(C)five years after the date of sentencing in any other case.

(3) If not otherwise provided by the court under this subsection, restitution shall be made immediately. . . . . 18 U.S.C. § 3663(f).

statutory time limits contained in § 3663(f)(2) did not apply.2 The FDIC also argued that this

section places time limits only on the sentencing court’s authority to schedule payment of restitution;

it does not terminate the defendant’s obligation to pay at the end of those statutory time limits if

restitution is still outstanding.

The district court held that the civil settlement of the $284 million judgment did not affect

the restitution order. It held that private parties cannot release criminal wrongdoers from

punishment. However, the court granted summary judgment for Dover. The court relied primarily

on United States v. O’Brien, 109 F. App’x 49 (6th Cir. 2004) and its interpretation of United States

v. Joseph, 914 F.2d 780 (6th Cir. 1990). It adopted the conclusions of the O’Brien court that:

1) a defendant’s restitution obligation may not be extended beyond the time periods

mentioned in § 3663(f), and 

2) when the deadlines have passed, the restitution obligation has expired and cannot be

enforced. 

The district court therefore found that Dover’s restitution order had expired at the end of his

probation and that the FDIC was not entitled to pursue enforcement of the restitution order. The

FDIC filed a timely notice of appeal. 

We review de novo the grant of summary judgment in favor of Dover. Boone v. Spurgess, 385 F.3d 923, 927 (6th Cir. 2004). We hold that the district court erred in finding that an

immediately payable restitution order entered under 18 U.S.C. § 3663(f)(3) expired at the end of the

criminal defendant’s probation period. We affirm the district court’s conclusion that settlement of

a civil judgment with the victim and satisfaction of that judgment does not estop the FDIC from

collecting criminal restitution in favor of the same victim.

II

This case presents a question of first impression, insofar as it concerns a restitution order

pursuant to the now-repealed terms of the VWPA, a sentence including probation and restitution but

no imprisonment, and an order by the sentencing court for immediate payment of the restitution,

rather than by a schedule of installments or by a fixed date in the future.

III

In the court below, Dover argued that his obligation to pay restitution expired at the end of

his probation because he was ordered to pay restitution as a special condition of that probation. The

FDIC argued that the restitution’s having been made a special condition was immaterial to its expiry,

and that the time limitations contemplated in § 3663(f)(2)(A) were inapplicable because the
No. 04-6437 Federal Deposit Ins. Corp. v. Dover Page 4

3

Joseph addressed 18 U.S.C. § 3579(f). The Comprehensive Crime Control Act of 1984 renumbered §§ 3579

and 3580 as §§ 3663 and 3664, without change in their language.

sentencing court ordered the restitution to be paid immediately, rather than on a schedule, as

contemplated by § 3663(f)(1)-(2).

The district court found United States v. Joseph, 914 F.2d 780 (6th Cir. 1990) controlling.3

The Joseph court had concluded that subsection (f) “expressly limits the life of a restitution order.”

Joseph, 914 F.2d at 786. The district court noted that the more recent United States v. O’Brien, 109

F. App’x 49 (6th Cir. 2004) affirmed Joseph as good law.

Because interpretation of Joseph and O’Brien supported the district court’s analysis, and

because those cases might appear quite similar to the facts here, further exposition of the precedents

is useful. 

We distinguish Joseph on two chief grounds: first, the district court in that case ordered

restitution to be paid at specified times (or at least at times to be specified later), not immediately,

and second, our discussion of time limits in that case was situated, if not expressly couched, in the

context of payment on a required security agreement.

Joseph pled guilty to making a false statement to the Small Business Administration and to

filing a false federal income tax return. The district court sentenced him to two years of

imprisonment for the false statement, and imposed a three-year suspended sentence and five-year

probation for the tax violation. The court further ordered him to pay restitution as “one of the

conditions of” the probation for the tax violation. Joseph, 914 F.2d at 781. The Joseph court quoted

the language of the district court’s order:

The defendant shall pay restitution in the amount of $318,000, . . . which amount will

fairly compensate the SBA for any unpaid advances it made, and . . . defendant and

the SBA [will] execute forthwith a consent judgment in favor of the SBA in such

amount, which shall be in full settlement of all claims of the SBA against defendant;

and defendant will execute security agreements to secure its payment during and

after the period of probation. The payment of such restitution shall be by periodic

payments during the period of probation in the amounts and in accordance with the

payment schedule to be established by the Probation Department, which schedule

may be adjusted by the Probation Department as it determines appropriate during the

period of probation.

Quoted in Joseph, 914 F.2d at 783. (Emphasis supplied.)

We note that the district court ordered, pursuant to the language of what is now numbered

§ 3663(f)(1), periodic payments. This distinguishes our case from Joseph. Dover’s sentencing

judge ordered that his restitution be paid “immediately.” 

This court ultimately refused to enforce payment of Joseph’s unpaid restitution agreement.

We held that “[i]f restitution is ordered under the Victim Act, finally, the court may not require the

defendant to execute a consent judgment or otherwise require him to secure payment ‘during and

after the period of probation.’” Id. at 786.

We must look to the opinion’s bar on “otherwise requir[ing] him to secure payment ‘during

and after the period of probation.’” We find that it is not intended to prohibit all restitution

extending beyond the time of probation. We find instead that the key to its meaning lies in the word

“secure,” and we note that time limits were discussed in that case in the context of contractual
No. 04-6437 Federal Deposit Ins. Corp. v. Dover Page 5

instruments such as promissory notes. In Joseph, immediately following the sentence quoted supra, we quoted sections of the statute and cited United States v. Bruchey, 810 F.2d 456 (4th Cir. 1987)

as instructive. In that case, the “Fourth Circuit held that it was error for the district court to exact

a promissory note on which the victim could have brought suit for 21 years[.]” Joseph at 786. We

quoted the Bruchey court’s statement, inter alia, that the “victim and defendant never ‘agreed’ on

the terms of a promissory note and we conclude that the district court should not compel a defendant

to sign such an ‘agreement.’” Ibid. Because this was the section the Joseph court quoted, we

conclude that we intended to emphasize the phrase “secure payment,” and that, for the purposes

contemplated in that case, an “otherwise” method of securing payment was understood to be through

a vehicle such as a promissory note.

The facts of the unpublished O’Brien case are closer to the facts here. In O’Brien, the

defendant pled guilty to bank fraud and money laundering. The district court sentenced him to a

term in prison and supervised release, plus restitution. O’Brien never paid. The United States sued

him in federal court. We adopted the district court’s interpretation of the Government’s suit as an

effort to enforce the restitution order in that case. O’Brien, 109 F. App’x at 50. Our court then

reversed the district court’s grant of summary judgment to the government. Our analysis from that

case was closely followed by the district court in the case now before us. The key part follows:

The district court erred in granting the Government's motion for

summary judgment because the criminal restitution order has expired

and is no longer enforceable against O’Brien. When O’Brien was

sentenced in 1995, federal law permitted sentencing judges to order

a defendant to pay restitution immediately or to order that a

defendant pay restitution within a specified period or in specified

installments. See 18 U.S.C. § 3663(f) (1995). The statute provided,

however, that the payment period could not extend beyond five years

after the end of any term of imprisonment imposed or beyond the

term of probation where no term of imprisonment is imposed. 18

U.S.C. § 3663(f)(2)(B). In United States v. Joseph, 914 F.2d 780 (6th

Cir.1990), this court concluded that this provision expressly limited

the life of criminal restitution orders, and the defendant’s restitution

obligation could not be extended beyond the statutory period. Id. at

786. In so holding, the court noted that, during the statutory period,

the sentencing court retained the equitable power to modify a

criminal restitution order if a defendant’s circumstances change.

Once the statutory period ended, however, the sentencing court

would be without jurisdiction to make equitable adjustments. In the

instant case, there is no dispute that the statutory period has expired.

Accordingly, if the action filed by the Government is an attempt to

enforce the criminal restitution order, the district court erred in

granting summary judgment in favor of the Government, because the

criminal restitution order could no longer be enforced against

O’Brien.

O’Brien, 109 F. App’x at 51 (footnotes omitted)

The district court in Dover wrote that the “same analysis applies to the case now before the

court.” 

There are at least two ways to distinguish O’Brien from our case. First, O’Brien was

sentenced to prison time plus restitution, not just probation and restitution. Second, the district judge

ordered O’Brien to “begin to pay the restitution ordered . . . immediately, to the extent possible
No. 04-6437 Federal Deposit Ins. Corp. v. Dover Page 6

. . . .” (Page 3 and n.1 of “Amended Judgment Including Sentence Under the Sentencing Reform

Act,” U.S. v. O’Brien, Case No. CR2-93-152, September 5, 1995). The district court in our case

simply ordered restitution “to be paid immediately,” without further qualification. In so doing, it

did not order a payment schedule that would extend beyond the time of its jurisdiction. An order

for complete immediate payment is distinguishable from an order to begin payment “to the extent

possible.” Because subsections 3663(f)(1) and (3) contemplate the timing and periodicity of

restitution payments–a “specified period” and “specified installments” are discussed in (f)(1) and

“immediate[]” payment is established as the default in (f)(3)–this distinction is important.

We do not rely solely on these distinctions between our case and O’Brien. As an

unpublished decision, O’Brien is not binding on this court. Insofar as O’Brien is interpreted to hold

that, where restitution is ordered to be paid immediately, a restitution order expires at the end of a

convict’s supervisory release or probation, we find that holding to be non-binding and that

interpretation to be incorrect.

Because § 3663(f)(1), Joseph, and O’Brien discuss imposition of restitution to be paid in

periodic installments, because the case now before us involves a clear order to pay restitution

immediately, and because the policy underlying restitution would be thwarted if a convict could

merely delay payment beyond the end of probation to escape his full punishment, this court declines

to follow the district court’s reasoning.

IV

Indeed, our reading of the statutory language, especially subsections (f)(1)-(3), indicates that

a cutoff date applies only where periodic or scheduled installments have been ordered. It is

consistent with the policy of restitution and also with the aim not to burden defendants with

restitution payments that are scheduled by the judge to be made long after the penalty of probation

or release has ended. However, it would be inconsistent with the policy of restitution to extend this

logic to orders of immediately payable restitution. Defendants should not be able to escape payment

of restitution permanently simply by avoiding payment for a while.

Our conclusion in this case as to the meaning and policy of § 3663 aligns this circuit with

the general trend of opinion in our sister courts.

In United States v. Rostoff, 164 F.3d 63 (1st Cir. 1999), the First Circuit held that

“[e]nforcement of [a] restitution order is governed not by subsection (f) . . . but by subsection (h).”

Id. at 67. The district court did not consider this case. The facts of Rostoff are similar to those of

Dover. The brothers Rostoff (Steven and David) were convicted of fraud, false statement, and

conspiracy in their commerce with a savings and loan. They were each sentenced to a prison term,

supervised release, and restitution “not to exceed $650,000.” Id. at 64 (internal quotations omitted).

Importantly, like the sentencing court in Joseph, the sentencing court in Rostoff ordered that the

restitution be paid “in installments as determined by the probation department.” Ibid. The Rostoffs

each paid only roughly $8,000 during their supervised release. However, they took steps to hide

assets belonging to them, in violation of the terms of their release. A fortnight before the end of the

Rostoffs’ period of supervised release, the United States sued both brothers, seeking a declaration

that the restitution debt was enforceable. The First Circuit upheld the district court’s ruling that the

restitution order had not expired.

Though it is possible to distinguish Rostoff on the grounds that the restitution in our case was

imposed with an order for immediate payment, the First Circuit’s reasoning is instructive,

particularly in its analysis of the VWPA’s purpose. The Rostoff court held that subsection (h)

“governed” the “[e]nforcement of the restitution order.” Id. at 67. It held further that this subsection

applied to restitution orders payable immediately but also to those payable at later dates. To hold
No. 04-6437 Federal Deposit Ins. Corp. v. Dover Page 7

otherwise, the court noted, would “create the anomalous result that an order of restitution that is due

immediately expires twenty years [the Massachusetts limit on enforcement of judgments in favor

of the government] after it is issued, while an order of restitution due in the future expires the instant

its due date passes.” Such a result would “give . . . defendants an incentive to ‘run[] out the clock

in the fourth quarter of play’ rather than redress their wrongs” and “would be entirely at odds with

the express object and policy of the VWPA of which subsection (f) is a part.” Id. at 67-68 (quoting

United States v. Rostoff, 956 F. Supp. 38, 43 (D. Mass. 1997) (internal quotations and citation

omitted).

In United States v. Idema, 118 F. App’x 740, 743 (4th Cir. 2005), the Fourth Circuit stated

clearly that “the time limitations in the VWPA do not apply to this case because the district court

ordered Idema to pay restitution immediately. The time limitations in § 3663(f) apply only when

the district court schedules payments over time or by installments.” 

The Seventh Circuit squarely addressed the question before this court in United States v.

House, 808 F.2d 508 (7th Cir. 1986). Judge Easterbrook wrote for a unanimous panel:

Section 3579(f)(3) makes restitution due immediately, like an

ordinary debt. Section 3579(f)(1) allows the sentencing court to

depart from that rule and to establish a payment schedule–payment

“within a specified period or in specified installments.” Section

3579(f)(2) says that “[t]he end of such period or the last such

installment” shall come within a specified time. The reference–“such

period” or “such installment”–is to the periods and installments

established under § 3579(f)(1). Unless there is such a period or

installment, § 3579(f)(2) is inapplicable. So when an order to pay

restitution does not establish a period or set a schedule of

installments, it also is not limited in time.

This makes perfect sense. Restitution is a debt, which may be

collected using the means appropriate to other debts. 18 U.S.C.

§ 3579(h). Debts do not abate after five years. . . . The power of a

district judge to establish a schedule of repayment under § 3579(f)(1)

created a risk that the schedule would be so extended as to make the

order ineffectual. A defendant told to pay in 40 years has been told

he can keep the money. So § 3579(f)(2) limits the use of § 3579(f)(1)

to drag out the process of restitution. Such a limit is unnecessary

when payment is due immediately under § 3579(f)(3). 

Id. at 511.

The Ninth Circuit cited and quoted House approvingly on this point in United States v.

Soderling, 970 F.2d 529, 535 n.12 (9th Cir. 1992). And the Eleventh Circuit appears to have favored

a similar position, if only briefly and in a footnote, in United States v. Fuentes, 107 F.3d 1515, 1533

n.33 (11th Cir. 1997), where it wrote that “although the sentencing court must determine the amount

of restitution in light of the defendant’s ability to pay within the time period provided by § 3663(f),

the defendant is not automatically ‘off the hook’ at the end of that period.”

With respect to the issue of the interpretation of the VWPA and enforcement of the

restitution, we reverse the judgment of the district court.
No. 04-6437 Federal Deposit Ins. Corp. v. Dover Page 8

V

The district court clearly ruled that Dover’s settlement of his civil liability of $284 million

(for $5,000) does not affect the restitution order. The FDIC concedes that the amount of that

settlement is to be deducted from the $19.6 million it is seeking to recover in this enforcement

action. Dover argues in his brief that the district court ruled incorrectly on this issue. Dover

contends that “the FDIC is estopped from further collection efforts because Mr. Dover settled with

the victim and paid the settlement in full.” (Appellee’s Brief, 27). 

Dover’s argument fails. The district court properly cited United States v. Bearden, 274 F.3d

1031 (6th Cir. 2001) for the proposition that, in words of the Memorandum Opinion, a 

settlement between a criminal wrongdoer and his victim that releases

the wrongdoer from further liability does not affect a district court’s

ability to impose a restitution order at sentencing. The fact that the

settlement in this case was entered into after the restitution was

ordered does not mean that the basic principle set out in Bearden

does not apply. Id. at 2041 (A purpose of criminal restitution is

punishment. ‘It would be improper to permit private parties to

release criminal wrongdoers from punishment.’).

Our court has spoken convincingly in favor of the FDIC’s position on this point. Settlement

of a civil liability does not affect enforcement of a restitution order except insofar as the amount of

that settlement might, consistent with the terms of the original sentence, count against the

recoverable amount in the enforcement suit. We affirm this portion of the district court’s judgment.

VI

We REVERSE in part and AFFIRM in part and order that summary judgment be entered

in favor of FDIC.