Opinion ID: 740229
Heading Depth: 2
Heading Rank: 1

Heading: The Order of Restitution to Identified but Unlocated Victims

Text: 18 A sentencing court's order of restitution is reviewed for abuse of discretion. See, e.g., United States v. Soto, 47 F.3d 546, 550 (2d Cir.1995); United States v. Lavin, 27 F.3d 40, 42 (2d Cir.) (per curiam), cert. denied, 513 U.S. 976, 115 S.Ct. 453, 130 L.Ed.2d 362 (1994). Given Berardini's acknowledgement that he grossed $39,271 in the unlawful scheme, and given the identification of the 62 victims whose losses totaled that sum, we see no theoretical error or abuse of discretion in the district court's ordering restitution in that amount to the identified victims. The problem that may arise is a practical one when restitution is to be made to victims who, though identified, cannot be located. We believe the provisions of the 1994 Criminal Code applicable to Berardini, see 18 U.S.C. § 3583(e) (1994); id. §§ 3663(h)(1) and (2) (1994) (current versions at id. §§ 3613(f) (1996) and 3664(m)(1)(B) (1996), respectively, see Antiterrorism and Effective Death Penalty Act of 1996, Pub.L. No. 104-132 (AEDPA) §§ 207(c)(3), 206(a), 110 Stat. 1214, 1239, 1235); and 18 U.S.C. § 3613(a) (1994) (current version at id. § 3613(c) (1996), see AEDPA § 207(c)(3), 110 Stat. 1214, 1239), provide the court with the authority needed to resolve this problem. 19 Preliminarily, we note that although there is some suggestion in the District Court Clarification that Berardini might make restitutionary payments to the Clerk of the Court for some 20 years, no such requirement was authorized by the Code or imposed in the sentence. The applicable version of § 3663(f) provided that when an order required restitution within a specified period or in specified installments, [t]he end of such period or the last such installment shall not be later than ... five years after the end of the term of imprisonment imposed. 18 U.S.C. § 3663(f)(2) (1994) (repealed by AEDPA § 205(a)(2), 110 Stat. 1214, 1230; see 18 U.S.C. § 3572(d)(2) (1996), AEDPA § 207(b), 110 Stat. 1214, 1236-37). The sentence in this case does not violate that provision because the oral sentence, which made the $39,271 payment due immediately and stayed that requirement without specifying the duration of the stay with respect to the balance due in excess of the monthly payments, was supplemented by the written Judgment, which specifies that the $39,271 total is to be paid at least three months prior to the expiration of Berardini's three-year term of supervised release. Thus, the oral sentence and the Judgment together make clear that, in addition to the payments of $300 per month during the term of supervised release, Berardini will be required to make a balloon payment so that by three months prior to the expiration of that term, he will have paid a total of $39,271. Although, as discussed below, Berardini's assets may remain vulnerable to civil attachment, there is no requirement in the sentence that he make payments after the end of his supervised-release period. 20 The practical problem raised by Berardini will first present itself at the point that the balloon payment is due, if not all of the victims to whom the $27,480 is owed have then been located. The problem would arise because the Judgment orders that the restitutionary payments be made to the victims, rather than to the government on behalf of the victims. Accordingly, unless all of the presently unlocated identified victims turned up by that time, it would be impossible for Berardini to comply with the combination of conditions imposed by the district court. In that event, either party may seek a ruling from the court as to whether and how the balloon-payment requirement of the judgment is to be complied with. 21 In response to such an application, which we assume would be made prior to the due date of the balloon payment, and hence prior to the end of the supervised-release period, the court could exercise its authority under 18 U.S.C. § 3583(e) to modify the terms of supervised release. Under that section, after consideration of the pertinent sentencing factors, the court could, for example, terminate Berardini's supervised release and remit his obligation to make further restitution. See id. § 3583(e)(1) (court may terminate a term of supervised release and discharge the defendant released at any time after the expiration of one year of supervised release). Alternatively, the court could modify ... the conditions of supervised release. Id. § 3583(e)(2). Under this provision, for example, if the court learns that a given victim is deceased, it could order that the restitution be made to the victim's estate. See id. § 3663(c) (1994) (current version at id. § 3663(a)(1)(A) (1996), see AEDPA § 205(a)(1), 110 Stat. 1214, 1229). Or it could order that Berardini make his balloon payment to the government as trustee for the as-yet-unlocated victims. Ordering that the payment be made to the government as trustee would not increase Berardini's punishment; it would merely introduce an intermediary to which Berardini is required to make the already scheduled payment. 22 Assuming that the court orders Berardini to make the balloon payment to the government as trustee for the as-yet-unlocated victims, various sequences might follow. First, if Berardini does not make the entire required balloon payment to the government, he will not have complied with the conditions of his supervised release, and the government may move the court to punish him. Regardless of how the court might rule on such an application, the victims who are entitled to restitution would, unless the court orders otherwise, retain their rights to be paid. Section 3663 provides that a restitution order may be enforced 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)(2) (1994). An unpaid money judgment in a civil action remains in effect for 20 years. See N.Y.C.P.L.R. 211(b) (McKinney 1990) (money judgment is presumed to be paid and satisfied after the expiration of twenty years from the time when the party recovering it was first entitled to enforce it); see also Fed.R.Civ.P. 69(a) (federal judgments to be enforced in accordance with the practice and procedures of the state in which the district court sits). Further, as Berardini concedes, the government may file a lien on behalf of the victims to secure Berardini's obligation to make restitution. See 18 U.S.C. § 3663(h)(1) (1994) (an order of restitution may be enforced by the government in the manner provided for the collection and payment of fines in subchapter B of chapter 229 of this title [i.e., 18 U.S.C. §§ 3611-3615]); id. § 3613 (1994) (a fine is a lien in favor of the United States, which continues until the liability is satisfied, remitted, or set aside, id. § 3613(a) (1994), or until it becomes unenforceable by the passage of 20 years from the date of the judgment or by the death of the defendant, see id. § 3613(b) (1994)). We assume that the government has filed, or will file, a lien on behalf of the persons entitled to restitution, as it advised the district court is its normal practice, see District Court Clarification at 4. Thus, unless sooner satisfied, remitted, or set aside, the lien filed by the government would remain effective until 20 years after the judgment; at the 20-year mark, by operation of law, that lien would become unenforceable. We note that the 20-year period covered by the government's lien may not precisely match the 20-year period during which the victims have the right to enforce the restitution order as a civil judgment, for the former period normally begins upon entry of the judgment of conviction, whereas the latter period begins at the time the victims gain the right to enforce the judgment. Since the balloon payment is not due until three months before the end of the supervised-release period (which presumably began in late 1996), the rights of the 42 as-yet-unlocated victims to collect have not yet ripened. 23 Second, if Berardini makes the required balloon payment to the government as trustee for the victims, and has made the required monthly payments, the government's lien would properly be extinguished at that point because the restitution debt would have been satisfied. Berardini would be entitled to a declaration to that effect, and any victims who thereafter came forward could obtain their moneys from the government. 24 Finally, if Berardini makes the balloon payment to the government as trustee, and if all or any portion of that money is not claimed by the victims, the question will arise as to what is to be done with the unclaimed money. Insofar as Berardini might seek to have unclaimed restitutionary payments being held by the government repaid to him at some time during the 20-year period following his payment, it is not clear that the court would have the authority to order such a repayment. Although a lien filed by the government may presumably be remitted by the court at any time prior to the expiration of the 20-year period specified in § 3613(b), see 18 U.S.C. § 3613(a) (1994)--(we note that such a lien would, by hypothesis, already have been extinguished because Berardini's debt would have been satisfied)--it may well be that the rights of the victims to seek satisfaction directly by enforcing the restitution order in the manner of a judgment in a civil action, id. § 3663(h)(2) (1994), cannot be so extinguished after the end of Berardini's supervised-release period, for the court's power under § 3583(e) to reduce or modify the terms of supervised release exists at any time prior to the expiration or termination of the term of supervised release. 18 U.S.C. § 3583(e)(2) (emphasis added). We leave consideration of this question to the district court in the first instance, if Berardini makes such an application and if the court is inclined to grant it. 25 If, 20 years after Berardini makes the required balloon payment, any of that money remains unclaimed, the rights of the victims to enforce the restitution order as a civil judgment will then expire. Since the government was not a victim of Berardini's offense and the court expressly refused to impose a fine, there would appear to be no basis for allowing the government to keep the money. And since at that point, if Berardini had not made the ordered payments, the vulnerability of his assets to attachment on that account would have ended, we would think the district court would order that any sums unclaimed by his victims be returned to him. Promotion of respect for the law requires that a defendant who has made the required payment not be left worse off for complying with the court's order than he would have been had he disobeyed it. 26 Berardini complains that it is unfair to leave him in a state of uncertainty by virtue of an order that he make payments to victims who may not ever be found. We see no inappropriate uncertainty. As discussed above, upon application of the parties prior to the expiration of the supervised-release period, if the court orders Berardini to make his payments to the government on the unlocated victims' behalf and Berardini complies with that order, there will be no cloud on his assets, for the lien will have been extinguished by Berardini's satisfaction of the debt; the possibility that there may be money to be returned to Berardini at the end of the pertinent 20-year collection period can hardly be termed a cloud. If Berardini does not make the required balloon payment, the resulting lien and exposure to the possibility of civil enforcement by his victims will be an appropriate consequence of his offense and his failure to comply with the terms of his supervised release.