SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOC62438
CRIMINAL FINES AND RESTITUTION: ARE FEDERAL OFFENDERS COMPENSATING VICTIMS?
SUBCOMMITTEE ON CRIME
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
MAY 6, 1999
Serial No. 72
Printed for the use of the Committee on the Judiciary
Page 2 PREV PAGE TOP OF DOCFor sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR S. SMITH, Texas
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB GOODLATTE, Virginia
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRIS CANNON, Utah
JAMES E. ROGAN, California
LINDSEY O. GRAHAM, South Carolina
MARY BONO, California
SPENCER BACHUS, Alabama
JOE SCARBOROUGH, Florida
Page 3 PREV PAGE TOP OF DOC
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
TAMMY BALDWIN, Wisconsin
ANTHONY D. WEINER, New York
THOMAS E. MOONEY, SR., General Counsel-Chief of Staff
JULIAN EPSTEIN, Minority Chief Counsel and Staff Director
Subcommittee on Crime
BILL McCOLLUM, Florida, Chairman
STEVE CHABOT, Ohio
BOB BARR, Georgia
Page 4 PREV PAGE TOP OF DOCGEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR S. SMITH, Texas
CHARLES T. CANADY, Florida
ASA HUTCHINSON, Arkansas
ROBERT C. SCOTT, Virginia
MARTIN T. MEEHAN, Massachusetts
STEVEN R. ROTHMAN, New Jersey
ANTHONY D. WEINER, New York
SHEILA JACKSON LEE, Texas
PAUL J. MCNULTY, Chief Counsel
GLENN R. SCHMITT, Counsel
DANIEL J. BRYANT, Counsel
BOBBY VASSAR, Minority Counsel
DAVID YASSKY, Minority Counsel
C O N T E N T S
May 6, 1999
Page 5 PREV PAGE TOP OF DOC McCollum, Hon. Bill, a Representative in Congress from the State of Florida, and chairman, Subcommittee on Crime
Stana, Richard M., Associate Director of Administration of Justice Issues, United States General Accounting Office, Washington, DC
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Stana, Richard M., Associate Director of Administration of Justice Issues, United States General Accounting Office, Washington, DC: Prepared statement
Material submitted for the record
CRIMINAL FINES AND RESTITUTION: ARE FEDERAL OFFENDERS COMPENSATING VICTIMS?
THURSDAY, MAY 6, 1999
House of Representatives,
Subcommittee on Crime,
Committee on the Judiciary,
Page 6 PREV PAGE TOP OF DOC The subcommittee met, pursuant to call, at 9:37 a.m., in Room 2237, Rayburn House Office Building, Hon. Bill McCollum [chairman of the subcommittee] presiding.
Present: Representatives McCollum, Gekas, Coble, Smith, Canady, and Scott.
Staff present: Paul J. McNulty, Chief Counsel; Bobby Vassar, Minority Counsel; and Veronica Eligan, Staff Assistant.
OPENING STATEMENT OF CHAIRMAN MCCOLLUM
Mr. MCCOLLUM. The Subcommittee on Crime will come to order. Today we examine one of the most important responsibilities of the criminal justice system, compensating crime victims for the losses they suffer. Justice demands that criminals be punished for their offenses, but also it demands that they restore to their victims, if possible, what has been lost or compensate them for their suffering. If offenders are not being ordered to pay restitution, justice is not being served. Simply that, and nothing more.
Today we will also address another fundamental principle of our criminal justice system. That is the principle of fairness. Fifteen years ago Congress set in motion a process for establishing uniformity in sentencing in the 94 districts throughout the United States. The goal was to ensure that defendants who committed similar crimes would receive similar punishment no matter where they were sentenced.
The Federal sentencing guidelines established in 1987 have gone a long way to achieving this uniformity with regard to prison sentences. Today we will hear that we may still be a long way from the goal of fairness and uniformity in the Federal system when it comes to fines and restitution. We will learn that where an offender is tried will determine in large part whether he will be required to pay a fine or restitution. We will also learn more importantly that restitution may not be ordered by Federal judges as frequently as it should, and strangely enough, was less frequently ordered in 1997, the year after Congress mandated restitution for violent and property crimes in 1996.
Page 7 PREV PAGE TOP OF DOC
This and other important information will be presented to us this morning by officials from the General Accounting Office. For the past 2 years, GAO has been studying several issues relating to orders of restitution and criminal fines imposed on Federal offenders. Senator Hatch and I requested this study because we wanted to know who is being ordered to pay and of those ordered to pay, are they actually doing so.
In its report being released publicly today, GAO describes the enormous diversity that exists across Federal circuit and district courts when it comes to fines and restitution. The report finds that victims in certain Federal districts are far more likely to be compensated for their losses than victims of the same crime in other districts. The report also finds that the odds of being fined in one district may be three or four times greater than in another for the same crime. We must find out if this lack of uniformity, if it can be explained by legitimate differences in the individual cases, we need to find out whether it can be or not or an even deeper, more troubling problem in the Federal criminal justice system.
Representatives from GAO have suggested that certain cultures exist within many Federal districts which may be harmful to the interests of victims. These districts may have longstanding weaknesses in cooperation between the U.S. Attorney's office and the court officials. If this is true, we must ensure that these cultures change.
It should be noted that the Administrative Office of the U.S. Courts was invited to testify in person at today's hearings, but declined to do so. However, the Courts have submitted a statement for the record from Chief Judge George Kazen of the Southern District of Texas. Judge Kazen is the Chairman of the Committee on Criminal Law of the Judicial Conference of the United States. Without objection this statement will be made a part of the record. Hearing no objection, it is so ordered.
Page 8 PREV PAGE TOP OF DOC
I want to thank GAO for its diligent work over the last 2 years and I look forward to hearing from them this morning. I yield to Mr. Scott, our ranking member.
Mr. SCOTT. Mr. Chairman, before I make my remarks, I think you indicated that the administrative arm of the courts have declined to testify?
Mr. MCCOLLUM. That is correct.
Mr. SCOTT. Were they given appropriate notice?
Mr. MCCOLLUM. They were given a week and a half notice, according to what I understand.
Mr. SCOTT. Did they indicate that they didn't want to testify or didn't have time to prepare testimony?
Mr. MCCOLLUM. The staff indicates that it was a time question.
Mr. SCOTT. I wouldn't want the record to reflect that they had declined if that is not what they did.
Mr. MCCOLLUM. Well, I think they did decline, whatever the reason. But nonetheless, your point is made. Apparently they had some time problems and could not or didn't feel they could testify.
Page 9 PREV PAGE TOP OF DOC
Mr. SCOTT. Thank you, Mr. Chairman. This hearing involves an important subject, the effectiveness of our courts in getting restitution to crime victims. The GAO report that we are considering provides information that may prove useful in that inquiry. However, at this point it appears to do a better job of raising questions than answering them. The report documents variances among the 94 judicial districts in their rates of ordering fines and restitution. I am not surprised that such a variance exists. Fines are discretionary and are based in part on ability to pay. Restitution, while required in most cases pursuant to the Mandatory Victim Restitution Act of 1996, is not required in cases where there is no identifiable victim or loss. There are, of course, differences in types and numbers of cases as well as differences in demographic factors among the districts.
The report admits these factors exist and that they impact the rates of ordering fines and restitution. The report also admits that there may be many reasons for not ordering restitution in individual cases, such as the stolen money having been recovered or restitution having been paid prior to sentencing or that the case involved an attempt or conspiracy. And there is no indication as to what the proper rate of ordering fines or restitution or as to what the proper variance of such a rate should be.
Yet the report suggests that the variance is so great that these and other factors do not explain the extent of the variance among the districts. One question squarely raised by the report is whether the MVRA hindered or helped the cause of restitution given the overall rate of ordering restitution actually dropped more than 50 percent after the act. This drop may suggest that while it is appealing from a political perspective to require that restitution be ordered in every case, in many instances it is a shallow gesture. Given that the earlier report assessed restitution collection effectiveness among the courts, the lower rates of ordering restitution may be a recognition by the courts that an offender ordered to pay restitution or a fine that he or she cannot come close to paying, will more likely pay nothing at all; or if the offender is ordered to pay an amount that he or she can pay, it is more likely that at least some portion will be paid.
Page 10 PREV PAGE TOP OF DOC
With regard to fines, this phenomenon is important because that money goes to the Crime Victims Fund, which pays for critical victim services such as rape counseling and victim assistance programs.
So, Mr. Chairman, I hope that we would do more than just look at the issue of consistency among districts, but also consider the broader issue of how well the MVRA is serving victims, and I guess another question is what impact the Sentencing Commission has on achieving a reasonable uniformity in sentencing.
So Mr. Chairman, I am looking forward to the testimony with the hope that it will help us understand what we might do to assure higher rates and amounts of restitution to victims of crime and some reasonable uniformity amongst the districts.
Mr. MCCOLLUM. Thank you, Mr. Scott.
Mr. Smith, do you desire any opening comments?
Mr. SMITH. I do not.
Mr. MCCOLLUM. Thank you. I want to welcome our first and only witness today, if he would come forward. Our only witness is Richard M. Stana. Mr. Stana is the Associate Director of Administration of Justice Issues for the United States General Accounting Office. He has been with the General Accounting Office since 1976 and has worked on a myriad of domestic and defense issues in GAO's headquarters division, the Detroit office, and in the European office. Mr. Stana has a Bachelor of Business Administration and Economics and a Master of Business Administration and Financial Management from Kent State University.
Page 11 PREV PAGE TOP OF DOC
Accompanying Mr. Stana is Richard Griswold and Jan B. Montgomery. Mr. Griswold is the evaluator in charge of the restitution study which we are considering today, and works in GAO's Los Angeles office. He has been with GAO for 26 years studying various administration of justice issues. Mr. Griswold is a certified public accountant with a degree in accounting from San Diego State University.
Jan Montgomery is the Assistant General Counsel for the Administration of Justice Issues in GAO's Office of General Counsel. She has been working on criminal justice issues for GAO for approximately 10 years. Ms. Montgomery has a Bachelor's Degree in Philosophy from Miami University and a Juris Doctorate from Georgetown University Law Center.
We welcome you today to the Crime Subcommittee hearing. The statements will be admitted into the record without objection, which they are. Mr. Stana, we recognize you to give us your shared thoughts, your statement, any summary you want whatever it may be.
STATEMENT OF RICHARD M. STANA, ASSOCIATE DIRECTOR OF ADMINISTRATION OF JUSTICE ISSUES, UNITED STATES GENERAL ACCOUNTING OFFICE, WASHINGTON, DC
Mr. STANA. Thank you very much, Mr. Chairman. We are pleased to be here today to discuss the results of our report on the differences among Federal courts in ordering offenders to pay fines and restitution. As you know, individuals convicted of a Federal crime can be ordered by the court to pay a fine or restitution at sentencing. Criminal fines, which are punitive, are to be paid in most cases to the Department of Justice's crime victims fund.
Page 12 PREV PAGE TOP OF DOC
Restitution law was reformed by the Mandatory Victim Restitution Act, MVRA, and now requires the court to order full restitution in certain cases to each victim in the full amount of each victim's losses. Unlike fines, restitution is to be paid or ordered regardless of the offender's ability to pay.
For our report you asked us to identify the percentage of offenders who were ordered to pay fines and restitution in fiscal year 1997, identify the differences across judicial circuits and districts in the percentages of offenders ordered to pay fines and restitution, provide officials' opinions about possible reasons for these differences and document the changes in the rate at which offenders were ordered to pay fines and restitution before and after MVRA was passed. In the report we are releasing today we respond to these objectives in detail. I would just like to summarize and make two main points.
First, the judicial district in which the offender is sentenced is a major factor in the likelihood of whether a fine or restitution is ordered. U.S. Sentencing Commission's data base shows that overall, about 19 percent of offenders were ordered to pay fines and about 20 percent of offenders were ordered to pay restitution. However, our multivariante statistical analysis revealed great variations across the 12 judicial circuits and 94 Federal judicial districts.
Across districts, for example, the percent of offenders who were ordered to pay fines ranged from 1 percent to 84 percent and the percent who were ordered to pay restitution ranged from 3 percent to 49 percent. The likelihood of an offender being ordered to pay fines or restitution could have been three times or more greater in one Federal judicial district than in an adjacent district.
Page 13 PREV PAGE TOP OF DOC
Another major factor was the type of offense committed. For example, our analysis showed that 6 percent of offenders sentenced for immigration offenses were ordered to pay a fine while almost one-third of property offenders were ordered to pay a fine. Similarly, while 1 percent of drug offenders were ordered to pay restitution, almost two-thirds of fraud offenders were ordered to pay.
Besides the type of offenses committed, other factors that were associated with whether an offender was ordered to pay included factors such as gender, race, education, citizenship, length of sentence, and type of sentence imposedsuch as prison, probation or some alternative sentence. We controlled for all of these factors for four specific types of offenses, robbery, larceny, fraud, and drug trafficking, and found that the judicial district in which an offender was sentenced continued to be a major factor in whether an offender was ordered to pay a fine or restitution.
For example, offenders convicted of fraud in the Eastern District of Pennsylvania were 13 times more likely to be ordered to pay a fine and three times more likely to be ordered to pay restitution than fraud offenders in the Eastern District of New York. Offenders convicted of fraud offenses in the Middle District of Florida were four times more likely to be ordered to pay restitution than in the Central District of California. Offenders convicted of drug trafficking offenses were 99 times more likely to be ordered to pay a fine in the Western District of Texas than they were in the Southern District of California. Offenders convicted of larceny offenses were 177 times more likely to be ordered to pay a fine in the Middle District of Georgia than in the Southern District of Florida.
Page 14 PREV PAGE TOP OF DOC Some court officials and prosecutors attributed the differences to the nature and types of offenses committed and the types of offenders sentenced in these districts. Our analysis controlled for many of these factors. Some officials believe that the culture or the management style among the district court officials and prosecutors contributed to the differences. We can discuss more about that later.
My second point is that the effect of MVRA has been mixed, but overall the percent of offenders ordered to pay has declined. Our multivariante statistical analysis showed inconsistencies across the three types of offenses we analyzed. Larceny offenders who were sentenced for crimes committed after MVRA went into affect were about half as likely to be ordered to pay restitution as those sentenced for crimes committed before MVRA went into effect. Robbers who were sentenced for crimes committed after MVRA went into effect were about one-third more likely to be ordered to pay restitution as those sentenced for crimes committed before MVRA went into effect. Fraud offenders who were sentenced for crimes committed after MVRA went into effect were about 20 percent less likely to be ordered to pay restitution as those sentenced for crimes committed before MVRA went into effect. Although we selected larceny, fraud, and robbery for detailed analysis because of the likelihood of a victim being due restitution, a substantial percentage of all offenders, about one-third to two-thirds of offenders sentenced, were not ordered to pay restitution even if their crimes were committed after MVRA became effective.
In discussing our results, some court officials and prosecutors said that it was still too early to assess the full impact of MVRA. In their written responses to a draft of our report, the Executive Office of the U.S. Attorneys and the United States Sentencing Commission cited training efforts planned for court officials and prosecutors on MVRA, and Department of Justice acknowledged that more remains to be done to increase the number of cases in which restitution is imposed. Court officials and prosecutors offered as possible explanation that stolen money or assets might have been recovered, an offender might have paid restitution prior to sentencing, and the offense might have been attempted fraud or robbery and the offender was arrested prior to obtaining money from the victim, or the offense might have been a telemarketing scheme or some other scheme where there were just too many victims to make restitution orders practical.
Page 15 PREV PAGE TOP OF DOC
In closing, the large statistical variation among judicial districts raises questions on a broad level about whether the goal of uniformity in the imposition of fines and restitution is being met. Our analysis shows that offenders could be much more likely in some jurisdiction than in others to be ordered to pay a fine or restitution for the same type of crime.
This concludes my oral statement. My colleagues and I would be happy to answer any questions you or the other members may have.
[The prepared statement of Mr. Stana follows:]
PREPARED STATEMENT OF RICHARD M. STANA, ASSOCIATE DIRECTOR OF ADMINISTRATION OF JUSTICE ISSUES, UNITED STATES GENERAL ACCOUNTING OFFICE, WASHINGTON, DC
FEDERAL COURTSDIFFERENCES EXIST IN ORDERING FINES AND RESTITUTION
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the results of our review of the imposition of fines and restitution in federal criminal cases. My statement will outline the results presented in our recently completed report, Federal Courts: Differences Exist in Ordering Fines and Restitution (GAO/GGD9970, May 6, 1999).
For that report, you asked us to (1) identify the percentages of those offenders who were ordered to pay fines and restitution in fiscal year 1997 and those who were not, (2) identify differences across judicial circuits and districts in the percentages of those offenders who were ordered to pay fines or restitution and those who were not, and (3) provide officials' opinions about possible reasons for these differences. We also documented changes in the rate at which offenders were ordered to pay fines and restitution before and after the Mandatory Victims Restitution Act (MVRA),(see footnote 1) which was enacted April 24, 1996.
Page 16 PREV PAGE TOP OF DOC
To answer your questions, we used 1997 data from the United States Sentencing Commission (USSC). USSC maintains a computerized data collection system, which forms the basis of its clearinghouse of federal sentencing information. We performed a statistical analysis of this data base for all 12 judicial circuits and 94 districts for offenders ordered to pay fines and restitution. We performed multivariate statistical analyses to determine which factors affected the likelihood of offenders being ordered to pay fines or restitution. We did not determine whether fines or restitution ordered were actually paid. We discussed our results with officials of the Department of Justice (DOJ), the Administrative Offices of the U.S. Courts (AOUSC), USSC, and with chief judges, chief probation officers, and representatives of U.S. Attorneys offices in seven judicial districts. A complete description of our scope and methodology can be found in our report.
Individuals convicted of a federal crime can be ordered by the court to pay a fine or restitution at sentencing. Criminal fines, which are punitive, are to be paid in most cases to DOJ's Crime Victims Fund. USSC Guidelines provide guidance on the minimum and maximum fine amounts to be imposed by the courts, based on the offense. In establishing the USSC, Congress sought, as one objective, uniformity in sentencing by narrowing the wide disparity in sentences imposed for similar criminal offenses committed by similar criminal offenders. Fines may be waived if the offender establishes that he or she is unable to pay and is not likely to become able to pay a fine. MVRA reformed restitution law and now requires the court to order full restitution in certain cases to each victim in the full amount of each victim's losses, without regard to the offender's economic situation. Previously, as with fines, the court could waive restitution, in most cases, based on offenders' inability to pay.
Page 17 PREV PAGE TOP OF DOC
The Importance of the Judicial Circuit or District in the Likelihood of an Offender's Being Ordered to Pay a Fine or Restitution
While many factors influenced whether an offender was ordered to pay a fine or restitution, the judicial circuit or district where the offender was sentenced was a major factor during fiscal year 1997. This variation among judicial circuits and districts occurred overall for all federal offenders sentenced under USSC Guidelines during that year; and, although occurring less, this variation persisted when we performed multivariate statistical analysis for federal offenders sentenced for four types of offenses.
Most of the approximately 48,000 federal offenders sentenced under USSC Guidelines in fiscal year 1997 were not ordered by the courts to pay a fine or restitution. About 19 percent were only fined by the courts, and about 20 percent were only ordered to pay restitution. Of the offenders sentenced, about 2 percent were ordered to pay both fines and restitution. The total amount of fines and restitution ordered was over $1.6 billion dollars.
The percentage of offenders ordered to pay fines or restitution varied greatly across the 12 federal judicial circuits and 94 federal judicial districts. Across districts, for example, the percentage of offenders ordered to pay fines ranged from 1 percent to 84 percent, and the percentage of offenders ordered to pay restitution ranged from 3 percent to 49 percent. The likelihood of an offender's being ordered to pay fines or restitution could have been three or more times greater in one federal judicial district than in an adjacent district.
An important factor in determining whether an offender was ordered to pay a fine or restitution was the type of offense committed. While 6 percent of offenders sentenced for immigration offenses were ordered to pay a fine, almost one-third of property offenders were ordered to pay fines. Similarly, while 1 percent of drug offenders were ordered to pay restitution, almost two-thirds of fraud offenders were ordered to pay restitution.
Page 18 PREV PAGE TOP OF DOC
Besides the type of offense committed, other factors, based on our statistical analysis, that were associated with whether an offender was ordered to pay included sex, race, education, citizenship, length of sentence, and type of sentence imposed, such as prison, probation, or an alternative.
We controlled for all those factors for four specific types of offenses in our multivariate statistical analysis, and the judicial circuit or district in which the offender was sentenced continued to be a major factor in determining whether an offender was ordered to pay a fine or restitution. For example, offenders convicted of fraud in the Eastern District of Pennsylvania, which includes Philadelphia, were 13 times more likely to be ordered to pay a fine and 3 times more likely to be ordered to pay restitution than fraud offenders in the Eastern District of New York, which includes Brooklyn. Other examples include the following:
Offenders convicted of fraud offenses in the Middle District of Florida, which includes Orlando, were four times more likely to be ordered to pay restitution than those convicted of the same offense in the Central District of California, which includes Los Angeles.
Offenders convicted of drug trafficking offenses were 99 times more likely to be ordered to pay a fine in the Western District of Texas, which includes San Antonio, than they were in the Southern District of California, which includes San Diego.
Offenders convicted of larceny offenses were 177 times more likely to be ordered to pay a fine in the Middle District of Georgia, which includes Macon, than in the Southern District of Florida, which includes Miami.
Page 19 PREV PAGE TOP OF DOC
Some court officials and prosecutors provided explanations of why differences existed among the districts. Some attributed the differences to the nature and type of offenses committed or types of offenders sentenced in the districts. Some officials believed that the culture, or management style, in the judicial district among the prosecutors and court officials contributed to whether offenders were fined or ordered to pay restitution. The culture included how prosecutors and court officials worked together to identify victims and their losses, among other factors.
The Effect of Mandatory Restitution Has Been Mixed, but Overall the Percentage of Offenders Ordered to Pay Has Declined
Although the imposition of restitution for certain offenses became mandatory with the passage of MVRA, the percentage of offenders, overall, ordered to pay restitution during fiscal year 1997 actually declined to 12 percent for those who were covered by MVRA's provisions, down from 26 percent for those who were not. During fiscal year 1997, about 45 percent of offenders sentenced under USSC Guidelines were subject to MVRA's provisions, and 55 percent were not.
MVRA's amendments are to be, to the extent constitutionally permissible, effective for sentencing proceedings in cases in which the defendant is convicted on or after the date of enactment, which was April 24, 1996. However, because of an ex post facto issue, DOJ has issued guidelines that any provisions of MVRA for determining whether to impose restitution or the amount of restitution would be applied only prospectively to offenses committed on or after April 24, 1996. In general, the ex post facto clause of the U.S. Constitution has been interpreted to prohibit the application of a law that increases the primary penalty for conduct after its commission. For our analysis, we used DOJ's guidelines in determining whether an offender was or was not subject to MVRA's provisions.
Page 20 PREV PAGE TOP OF DOC
While the overall percentage of offenders ordered to pay restitution declined, our multivariate statistical analysis showed the following inconsistent results across the three types of offenses we analyzed:
The likelihood of an offender's being ordered to pay restitution for a larceny offense decreased by almost half;
The likelihood of an offender's being ordered to pay restitution for a robbery offense increased by almost half; and
The likelihood of an offender's being ordered to pay restitution for a fraud offense decreased slightly.
In discussing our results, some court officials and prosecutors said that it was still too early to assess the full impact of MVRA. Some officials commented that time was needed to become familiar with and implement MVRA, especially on the part of the Assistant U.S. Attorneys who prosecute cases covered by MVRA. Prosecutors in one district acknowledged that they were not yet fully implementing the law. In their written responses to a draft of our report, both the Executive Office of the U.S. Attorneys and USSC cited training efforts planned for court officials and prosecutors on MVRA. DOJ, in their comments, acknowledged that, while a number of steps have been taken, more remains to be done to increase the number of cases in which restitution is imposed.
Although we selected larceny, fraud, and robbery because of the likelihood of a victim's being due restitution, a substantial percentage of offendersabout one-third to two-thirds of offenders sentencedwere still not ordered to pay restitution, even when their crimes were committed after MVRA became effective. Court officials and prosecutors provided some reasons why restitution might not have been ordered in these cases. In some cases, stolen money or assets might have been recovered. In other cases, an offender might have paid the restitution prior to sentencing, removing the need for a restitution order. Another reason cited by officials was that the offense might have been an attempted fraud or attempted robbery for which the offender was arrested prior to obtaining money from the victim. Some officials also cited an exception to MVRA in ordering mandatory restitution, such as in cases where the number of victims is so large that it makes paying restitution impracticable. One district had a number of telemarketing schemes in which large numbers of victims were defrauded of small amounts. It was not practical to identify all victims and obtain restitution for them.
Page 21 PREV PAGE TOP OF DOC
Although offender characteristics, type of offense, and the nature of the sentence played a role, the judicial circuit or district where an offender was sentenced was a major factor in determining the likelihood of an offender's being ordered to pay a fine or restitution during fiscal year 1997. This variation among judicial circuits and districts occurred overall for all federal offenders sentenced under sentencing guidelines during that year; and, although occurring less, this variation persisted when we performed multivariate statistical analyses for federal offenders sentenced under sentencing guidelines for four types of offenses. The large statistical variation among circuits and districts raises a question, on a broad level, about whether the goal of uniformity in the imposition of fines and restitution is being met. Under current conditions, offenders could be much more likely in some jurisdictions than in others to be ordered to pay a fine or restitution for the same type of crime.
Although MVRA was intended to eliminate much of the discretion judges previously had in waiving restitution for certain types of crime, the overall percentages of offenders ordered to pay restitution has declined. Of the three offenses we analyzed, the percentages of robbery offenders ordered to pay restitution increased, while the percentages of larceny and fraud offenders decreased. However, there may be mitigating circumstances, such as recovery of stolen money that help explain why restitution was not ordered in a particular case.
This concludes my prepared statement, Mr. Chairman. I would be pleased to answer any questions you or other Members of the Subcommittee may have.
Page 22 PREV PAGE TOP OF DOC [Note: The completed report accompanying Mr. Stana's prepared statement, Federal Courts: Differences Exist in Ordering Fines and Restitution (GAO/GGD9970, May 6, 1999) is in the files of the House Judiciary Committee's Subcommittee on Crime. Or visit http://www.gao.gov]
Mr. MCCOLLUM. Thank you very much, Mr. Stana, for telling us that. I have several questions that I do want to have answered this morning, if I could, and I know we have a little time. This is a very good report. The Judicial Conference, as you said, reviewed this and they have been somewhat critical of the methodology in the report. They have stated that since it is based on only 1 year's worth of sentencing that it cannot be really reflective of the true actual conditions out there.
Is that something that you find a good argument, a plausible argument? Would it be preferable if you had studied 5 years' worth of these things or what?
Mr. STANA. With your permission, I would like to bring our chief statistician on the assignment up to the table to answer. This is the first time we have seen their critique and I think it is something that maybe we ought to discuss in more detail. We looked at the Sentencing Commission's 1995 and 1996 data base in addition to the 1997 data bank. Our report contains only the 1997 data base. I would like to divide the argument into two parts. With respect to fines, we saw the same variations in the 1995 and 1996 data base that we are reporting to you today on the 1997 data base. So in that respect we do have more than 1 year's data. The trends are there. While more research is always helpful, I think that our findings are valid.
Page 23 PREV PAGE TOP OF DOC With respect to MVRA, however, the 1997 data were the only data available. The 1998 data are still not available. So we believe that the 1997 data are instructive on what went on with MVRA following its enactment.
Mr. MCCOLLUM. What about their criticism that you relied solely on Sentencing Commission data bases and that an independent review of the cases, which you have said would be too onerous, would be the only way, in the Judicial Conference's view, that you could determine whether or not there really were valid reasons for variations.
Mr. STANA. I think doing a case-by-case analysis would always be educational and instructive. That is always true. The types of variations that we have seen across judicial districts, however, certainly could not be answered by a preponderance of, say, inability to pay cases being in one district or another. We saw districts that were next to each other where we had great variations. We had districts that had substantial statistical cell sizes for certain crimes that were in similar districts, such as the Eastern Pennsylvania and Eastern New York, where there were vast differences that really could not be explained by one universe having a preponderance of one type of case or offender than the other.
So to some degree, I think their point is valid. As I said, additional research of that variety would always be instructive. I don't think that it explains the variation.
Mr. MCCOLLUM. They also complain that you focused only on the number of cases in which fines or restitution were imposed rather than the amount that was imposed on the given case, therefore it is impossible to determine from the report whether the total amount of restitution imposed has increased under the MVRA. Is that a valid criticism?
Page 24 PREV PAGE TOP OF DOC
Mr. STANA. We did not look at the amount of restitution ordered. I think if we were to do that we would have to also go into the case with a little more detail than was reflected in their critique to determine whether the full amount was actually identified and ordered, not just the amount ordered. We were trying to see how MVRA was being implemented in the types of cases where one would think it should have been ordered, not the amount being ordered.
Mr. MCCOLLUM. That is fair. Can you tell us which of the 12 Federal circuits are among the lowest in ordering the payment of criminal fines and restitution and which are among the highest?
Mr. STANA. The report, I believe on page 11, figure 2, shows by circuit the percentage of offenders ordered to pay fines. You can see from this figure that the D.C. Circuit is the lowest. The two highest circuits would be the seventh and the third. You can see the variation on the chart. It almost looks like a suspension bridge if you connected the dots.
Mr. MCCOLLUM. I can see that there. So that is by circuit. If we needed to, we could dig in and find it by district, I gather?
Mr. STANA. Let me you through our analysis of fraud offenses. I don't know if you are restricted by time. Let's go to Table 1.7, and if I might, I would have Wendy Ahmed, our statistician, explain the analysis.
Page 25 PREV PAGE TOP OF DOC Mr. SCOTT. Do you have a page number?
Mr. STANA. Yes, page 42. Sometimes when you have a statistical report like this, your eyes can glaze over. But these statistics really are easy to understand once you have someone guiding you through them.
Mr. MCCOLLUM. If you would, please, Wendy.
Ms. AHMED. Table 1.7 on page 42. What we have here is a model of the likelihood of fraud offenders being ordered to pay fines or restitution. What we see here is, for example, in Pennsylvania East, offenders have 18 times the likelihood of being ordered to pay fines than in South Carolina. Along those same lines, in Pennsylvania East fraud offenders are six times as likely to be paying fines than in Florida South.
So these numbers are the odds ratios, which means that it is the difference between the two districts ordering restitution or fines compared to not ordering restitutions or fines.
Mr. STANA. You could see how the math would be done. For example, in Pennsylvania East, the factor shown under model 2 is 18. We could use Florida Middle as an example. That is your district.
Mr. MCCOLLUM. That is true.
Mr. STANA. If you divided 2.37 into 18, you find that you are nine times more likely in Pennsylvania East to be ordered to pay a fine than you would be in Florida Middle. You can do the math all the way down the line that way.
Page 26 PREV PAGE TOP OF DOC
Mr. MCCOLLUM. Is this based as well on numbers of cases? For example, maybe there was only one fraud case in the Middle District of Florida and there were 10 of them in Pennsylvania or vice verse? Is that a factor at all?
Ms. AHMED. In Florida Middle, there are 228 fraud cases sentenced in 1997. There are 225 in Pennsylvania East.
Mr. MCCOLLUM. So it is a real good comparison in that regard.
Ms. AHMED. These are.
Mr. STANA. In picking the four crimes that we did, and Rich Griswold could explain this in more detail, we tried to confine our analyses to crimes where there were many offense categories, many offense occurrences in each statistical cell. This is why we did not analyze mail fraud or another crime where there weren't as many offenders. But there were large numbers of offenders in the four categories we studied in each of the 94 judicial districts.
Mr. MCCOLLUM. Okay, good. I will yield to Mr. Scott. I have taken my 5 minutes and we will come back if we want to ask more. Please, Mr. Scott.
Mr. SCOTT. Thank you. Mr. Stana, you indicated that you did not look into the amounts, you just looked at the amounts ordered? Whether there was an order or not, the amount ordered?
Page 27 PREV PAGE TOP OF DOC Mr. STANA. Yes.
Mr. SCOTT. You did not look into whether or not anything had been paid?
Mr. STANA. No, although that would be an interesting study. If you would like some more information on that, we could study the collection of fines and restitution and report our results at another time.
Mr. SCOTT. Because if two judges, one ordered the fine and the other one didn't and the guy that was ordered a fine or restitution never paid, that would end up being the same thing; but on your report the judge would at least get credit for having made the order?
Mr. STANA. We didn't check whether the payment was madem, but that would be an interesting analysis.
Mr. SCOTT. Did you look at the likelihood of whether or not incarceration had been ordered, that is if someone had been sent to jail?
Mr. STANA. Yes, we did. We controlled for that factor among others. Let's go back to Table 1.7 on page 42. The difference between the model 1 and model 2 columns is that model 1 is a raw number that doesn't take into account those factors or the pull of those factors on a sentencing decision. Model 2 does. If you look further down the table where it says offender characteristics, it shows the effect of these different variables on whether a fine or restitution was ordered. Wendy, do you want to explain these?
Page 28 PREV PAGE TOP OF DOC
Ms. AHMED. As Mr. Stana said, we controlled for all of these other characteristics. For example, if you were sentenced to prison for a fraud offense, you could see that you are 70 percent less likely to pay a fine
Mr. SCOTT. Where is the 70 percent?
Ms. AHMED If you look at prison versus probation, under sentence characteristics, on page 43 at the second half of the table.
Mr. SCOTT. That is the last number, the 7.71?
Ms. AHMED. It is a .35 under model 2, under fines, across from prison versus probation.
Mr. STANA. Right under the bold title that says sentence characteristics.
Ms. AHMED. You are only .35 times as likely to be ordered to pay a fine if you are sentenced to prison over probation. An important thing to understand here is that these other factors do have some effect on the ordering of fines and restitution, though they aren't explaining away the bigger differences that we see across districts, and also across circuits in some of the other tables, for the various crime types.
Mr. SCOTT. You are I guess one-third as likely to have a fine imposed if you are sent to prison in those districts where they are sending more people to prison; you would expect one-third as much fines to be given.
Page 29 PREV PAGE TOP OF DOC
Mr. STANA. Another way to look at that, Mr. Scott, is to look at the difference between the outcomes of model 1 and model 2. You see that the likelihood of being ordered to pay a fine or restitution does change when you consider all of these factors. Let's go to the bottom of page 42 again. For example, if you look under model 1, which does not consider things like sentencing characteristics and different demographic characteristics, in Pennsylvania East, you are five times more likely than in South Carolina to receive a fine for a fraud offense. Once you consider all of these other factors, you become 18 times more likely to be sentenced to a fine with a fraud offense, as shown in the model 2 column. So the criticism that the analysis does not take into consideration these factors isn't valid, although we are not disputing the fact that a case-by-case analysis might other information. When we controlled for all of these factors statistically, the variances that we found among judicial districts certainly did not go away. In some cases they were exacerbated.
Mr. SCOTT. Whether or not a specific victim had been identified, how did that fit into the chart?
Mr. STANA. I am sorry.
Mr. SCOTT. Whether or not an identifiable victim, whether or not there was an identifiable victim and whether or not there was, in fact, a loss that was notfor example, I think one of the criticisms was that it was armed robbery and they caught you on the way out the door and they got the money back. You are not going to have restitution in that case.
Page 30 PREV PAGE TOP OF DOC Mr. STANA. We believe those kinds of situations tended to even out across districts, based on discussions with court officials about the caseloads. But what also emerged from these discussions was the importance of the culture of the district.
Rich, would you please explain what the officials told you about the cultures and what some of the people that you interviewed said the differences were between, say, a New York district where they once worked and the northern California district where they now work?
Mr. GRISWOLD. I just want to comment briefly on the concern that we had there was just one year of information on fines and restitution ordered. We also had the Sentencing Commission data. The Sentencing Commission prints a book every year that has aggregate statistics that show variation by districts in fines and restitution ordered. Thus, we had several years showing variation by district for fines and restitution combined. But as Rich said, we were presented with all of these factors why these variations might exist. So we wanted to do a much more sophisticated analysis. We controlled for all of these factors in our analysis and we still could not explain away the variations. In other words, the variations that persisted over the years continued when we did the more sophisticated analysis.
So we felt that we had to also go out and talk to court officials and prosecutors to find out why these variations existed. We asked them if they could provide us with some insights. We went to the Northern District of California, where there were prosecutors who had transferred from the Eastern District of New York. They commented on how different the culture was in the U.S. Attorney's office in San Francisco than it had been in Brooklyn. They said in San Francisco they mixed the civil and criminal attorneys together, whereas in the Eastern District of New York they were kept separate. In San Francisco the civil attorneys, who were focused very much on identifying monetary losses, aided the criminal prosecutors in identifying individuals and circumstances where there might be a victim and losses. They said there was more of an emphasis on making sure you identified the victim and making sure you identified the loss.
Page 31 PREV PAGE TOP OF DOC
Another brief analysis on culture was actually done for us by two chief probation officers, one in the Northern District of California and one in the Central District of California. What the chief probation officer found when he looked at bank robbery, which is a subset of our armed robbery statistic, was that in the Northern District of California restitution was being ordered in every case if there was a loss identified by the probation officer in a presentence report. But in the Central District of California the chief probation officer found that even if the probation officer had recommended that restitution should be ordered in a pre-sentencing report to the judge, the recommendation was not always being followed by the judge at sentencing. So in one district, the judges always followed the probation officer's recommendations on restitution and in another district they did not.
Those were some of the cultural differences that were brought up to us as we went around and talked to the different judges, prosecutors and probation officers.
Mr. SCOTT. Mr. Chairman, I had another question.
Mr. STANA. Mr. Scott, could I answer one other question? You asked us before whether we identified the victim losses in our study. I was just reminded that we tried to use the loss data in the U.S. Sentencing Commission data base to do that. The Sentencing Commission individuals who were responsible for maintaining the data base told us that the data weren't very reliable, that in some cases the data were missing or they just weren't entered into the system. So we did not calculate it because it would have given us a figure that was highly suspect.
Page 32 PREV PAGE TOP OF DOC Mr. SCOTT. When a judge sentences a defendant, you have got fines, costs, restitution, and incarceration. All of that is in the sentencing order?
Mr. STANA. Yes.
Mr. SCOTT. If they vary from the sentencing guidelines, they have to have a finding that they are varying from the sentencing guidelines; is that right?
Ms. MONTGOMERY. With regard to restitution, it does not have to be ordered if there is no identifiable victim. That is not going outside of the guidelines.
Mr. SCOTT. Well, if we are talking about sentencing, if you assume that they are complying with the sentencing guidelines, then they ought to be having uniform sentencing. If they are not complying, we ought to ask the Sentencing Commission why not.
Mr. STANA. That would be an interesting question.
Ms. MONTGOMERY. Under the statute and the guidelines, the inability to pay is a reason to not impose a fine.
Mr. SCOTT. The ability to pay is how much the fine should be.
Ms. MONTGOMERY. You can also just waive the imposition of a fine if the defendant establishes that they have no ability to pay.
Page 33 PREV PAGE TOP OF DOC Mr. STANA. That is another factor that was raised in the critique offered by the AO, that the ability to pay should have somehow entered into our analysis. There is no good ability to pay information in the USSC data base. We did attempt to triangulate it by looking at education level, size of family, and other factors. We derived a rough approximation of ability to pay that way. But again, when we controlled for that, we just didn't find that it accounted for the variation among districts. It just didn't statistically matter that much.
Mr. SCOTT. But if we are going to do anything about it, it seems to me that the Sentencing Commission would be where we would want to look rather than the statutory language; is that right?
Mr. STANA. I think there are a couple of things that could be done. One, the Department of Justice and the AO have mentioned educational initiatives that they have under way to inform the interested parties about the MVRA and what needs to be done. That certainly would be useful. As Rich Griswold pointed out, we saw differences in practices across different districts. In some districts, from the judge down to the working level, the expectation was that victims' losses would be identified and where they could identify a victim and a loss, it was expected that a restitution order would be made. They would make a serious effort to do those things. In other districts we found that they resigned themselves that the victim's losses will never be identified, will never be collected, and that it was better to move on. So they didn't order restitution as often as the others.
Mr. SCOTT. Were you able to determine whether or not there was a differenceI understand there was a gradual implementation of the MVRA, that they had had education in some circuits and hadn't gotten around to it in others. Were you able to discern any difference after the educational process had been finished?
Page 34 PREV PAGE TOP OF DOC
Mr. STANA. No. We took the data that were available for fiscal year 1997.
Mr. SCOTT. Do you have anydo you want to comment on why the orders of fines and restitution went down after the MVRA passed?
Mr. STANA. It is counterintuitive. It is puzzling. To some extent it might be accounted for by the type of caseload that existed after MVRA went into effect compared to before MVRA. For example, there might have been more immigration cases or drug cases where restitution is less likely in the post-MVRA caseload. But even when we tried to control for that possibility, the post-MVRA results didn't bring to the level we saw in the pre-MVRA period. It is puzzling. You would have thought that it would have made a difference, but it didn't appear to make the difference that was anticipated.
Mr. SCOTT. Thank you, Mr. Chairman.
Mr. MCCOLLUM. I have some more questions. Mr. Canady, do you want to ask yours first?
Mr. CANADY. No.
Mr. MCCOLLUM. First of all, in examining the data, there are some examples, of course, you have given us already of some big differences here in the ordering of fines and restitution between the districts. One I am curious about is there is only 1 percent of all drug offenders were required to pay fines in the Southern District of California, but 22 percent were required to do so in the Southern District of Texas. Do you have any explanation of why that is the case on that particular one? Is that one that you can refer to and find in your tables there?
Page 35 PREV PAGE TOP OF DOC
Mr. GRISWOLD. That is something that totally puzzles me.
Mr. MCCOLLUM. No good reason for that?
Mr. GRISWOLD. I can't think of any good reason.
Mr. MCCOLLUM. It looks like twice as many offenders in Dallas are ordered to pay restitution in robbery cases than in Los Angeles. That is just an interesting statistic. That doesn't make sense. You would think that Dallas and Los Angeles would be comparable in that but they are not. No good explanation for any of that?
Mr. STANA. No. As I said, we controlled for all of the variables we felt we could control for statistically, and this situation exists.
Mr. MCCOLLUM. You refer to the culture problems there. Can anybody elaborate, Mr. Griswold or otherwise, on the U.S. attorneys being a part of the problem? Because Judge Kazen refers to that in his Judicial Conference report. He is kind of saying that this is a U.S. attorney problem principally. Is that the culture problem that we are talking about or is there more to it than what Judge Kazen seems to be implying?
Mr. GRISWOLD. I think it relates to the culture. The office culture is something that you have to pick up when you walk into an office and you talk to people. You try and find out how they operate. The best insight I got was where prosecutors had transferred between offices and they could see the difference in the cultures of the two offices. That includes, as the judge is pointing out, what the offender is charged with. You must sure you identify the victim, and make sure you identify the loss during the plea agreement. Because most cases are handled by plea agreement and are not going to go to trial, somebody has to speak up for the victim when that plea agreement is put together.
Page 36 PREV PAGE TOP OF DOC
In the Northern District of California the prosecutors felt that there was just more of an emphasis to make sure that that victim and the losses were identified and put into that plea agreement than there was in the district from which he had come.
Mr. MCCOLLUM. So in other words, since such a large number of these cases involved plea agreements that involved recommendations of the U.S. Attorney to judges, those variations in the recommendations could account forthe plea agreements could account for a good deal of this disparity. Is that a fair assumption?
Mr. GRISWOLD. I think Judge Kazen makes a good point there.
Mr. STANA. Just to amplify, it is not only the judge who is responsible here. It is true that some judges in one district were given the recommendation to make a restitution order but declined. But I think it is also an issue for the working level staff, which I think is what you are getting at. It is how the U.S. attorneys work with the probation office, and how everyone works together with an attitude and an expectation that they are going to identify victims and their losses. If you have an attitude of resignation, of, gee, we are just not going to be able to do this, it is too hard, they are never going to pay it, what is the use, then you just won't see the numbers of restitution orders.
Mr. MCCOLLUM. Are there any statistics or any information in the data base in what you have done that would reflect the differences in districts based upon some of them having, say, a fraud area, many more cases that the judge actually went through trial on as opposed to the plea bargain, or is the plea bargain just roughly comparable to the same number of cases in every district across the country, so there is not a variable that is of any significance?
Page 37 PREV PAGE TOP OF DOC
Mr. STANA. We didn't see a variable like that to add into our analysis.
Mr. MCCOLLUM. One other question that I had was in your testimonyI don't think this was askedyou state that only 2 percent of all offenders are being ordered to pay both a fine and a restitution. I am curious not only why the numbers are so low, but also aren't the purposes of the fine and restitution different? It would strike me that there ought to be some real differences here between a fine and restitution. I don't know whether there are distinctions, whether your report and study shows and reflects this and what it reflects, whether or not there is any more emphasis now on restitution than on a fine; if somebody can afford to pay only so much, are the judges, are the courts, are the U.S. attorneys, and the probation officers recommending restitution over a fine, first, and, therefore, in cases of ability to pay there are lower fines and higher restitution? I am just curious about that variable and also why the 2 percent, why both is so low. Maybe that is the reason. I just don't know.
Mr. STANA. We attempted to control, I believe, for the type of sentence, the sentence characteristic, correct?
Ms. AHMED. Yes. We controlled for prison over probation, and then any kind of alternative sentence being imposed as well as the length of the sentence.
Mr. STANA. Are you are asking if one were sentenced to pay a fine, then one wouldn't be sentenced to restitution or vice versa, because they are mutually exclusive? That is not so. If you look under alternative sentencing, page 43 at the top of the table, that is where we would show whether a fine was ordered in the restitution case. You can see it did have an impact but, again, it wouldn't explain the variation. The 2 percent ordered to pay both a fine and restitution is included in the 19 ordered to pay a fine and the 20 percent ordered to pay restitutionit is not additional to those two. As to why that percentage is so low, aside from the statistics we are citing, it is difficult to say.
Page 38 PREV PAGE TOP OF DOC
Ms. MONTGOMERY. One point is, technically, under the law, restitution takes priority over fines. So in terms of imposition of fines, you have to take into account if it would get in the way of paying restitution.
Mr. MCCOLLUM. You follow up. Go ahead.
Mr. SCOTT. I think what you just said is that restitution comes first?
Ms. MONTGOMERY. Right.
Mr. SCOTT. So you are not getting in the way of restitution in terms of whatever you have got goes first to restitution. So imposing a fine would not get in the way of a victim being compensated?
Ms. MONTGOMERY. Right. As Rich Stana said, they are not mutually exclusive. You can certainly be ordered to pay both. But under the law, if there is a limited amount of money the restitution would have priority.
Mr. STANA. There is no ability to pay determination for restitution as there is for fines.
Mr. MCCOLLUM. I am disturbed that the report shows that less than half of the fraud offenders are being ordered to pay restitution in the Central District of Californiaof course, that is Los Angelesand the Eastern District of New York, Brooklyn. And in Manhattan the percentage is just 51 percent. That is really low for fraud, it seems to me, of that particular crime. Is there any explanation? Is these particular districts ones that you actually looked at or talked to somebody in? Do we know?
Page 39 PREV PAGE TOP OF DOC
Mr. GRISWOLD. We did talk to people in those districts. Fraud is a percentage that really puzzles me because on the previous work that I did, I looked at about 500 cases. Whereas in robbery you might recover the money, in fraud I didn't see many cases where you would get the money back. It was missing by the time the person was apprehended. I don't know why the fraud numbers are so low in these cases. It may be accounted for in some cases by attempted fraud, things where they caught the people in advance. Still, I don't think that is half the cases. I don't know why it is so low.
Mr. MCCOLLUM. One of the questions that you might have gotten in the field discussions that I am curious about too is you are probably aware that U.S. attorneys are required to have victim witness coordinators. I don't know if these individuals are dropping the ball or not. Are you familiar with the fact that they have such a person, such an entity within the U.S. Attorney's offices, so-called witness victim coordinators?
Mr. GRISWOLD. I am familiar with them. We usually talk to someone in the Criminal Division and the victim witness coordinator was usually notwell, I don't remember every
Mr. MCCOLLUM. It is just something that we need to pursue because this is the type of individual that I envision, whether it is true or not, who would be involved or should be involved in the U.S. Attorney's office in trying to make some of the restitution happen inside the shop. Maybe that is a failure, too. But we have no information that you have on that.
Page 40 PREV PAGE TOP OF DOC Any other questions anybody wants to ask? Mr. Scott, Mr. Canady.
Mr. SCOTT. Just a follow-up on the fraud. Does insurance make a difference, whether or not the fraud may have been covered by insurance?
Mr. GRISWOLD. Then the insurance company would become the victim.
Mr. SCOTT. And that the judge might be less concerned about the insurance company than he would some hapless individual?
Mr. GRISWOLD. I don't think under restitution you are allowed to make that distinction. If there is an identifiable victim, the judge should order restitution.
Mr. SCOTT. The judge should. But you wouldn't have noticedthat wouldn't have been part of data that you would have been looking at?
Mr. STANA. No. If there is an identifiable victim, as Rich Griswald pointed out, there should be a restitution order. I don't know that we would have any information to say whether it would make a difference whether it was an individual or a corporation who was the victim.
Mr. SCOTT. Thank you.
Mr. MCCOLLUM. Anything, Mr. Canady, that you wish to ask?
Page 41 PREV PAGE TOP OF DOC
Mr. CANADY. No.
Mr. MCCOLLUM. I want to make an observation in closing, and that is that first of all, you did a very fine job. I know that there are always things you could do more and that is what the Judicial Conference analogy is pointing out, there is no way for this to be complete. But the point is that you have demonstrated, I think, to everybody's satisfaction on this committee that there is a problem here of sizable proportions. There is something wrong with this much disparity. This is something the Judicial Conference really needs to look into. It is something that the Justice Department needs to look into and the U.S. Attorney's offices and with probation officers. We are not going to get to the bottom of that today, but it is a road map.
For example, if you look at your table on page 33 starting there, of all of the districts on finding restitution and just glance at those sheets, the disparityI know that you pointed out two or three, but the disparity is just all over the board. While we wouldn't expect it to be absolutely uniform and surely there are plenty of reasons why in a given case you would have a variable that would make it exaggerated perhaps; to have this much as you pointed out does not make for good justice. It is not fair. There is something wrong here, especially if the victim's restitution provisions that we passed. The mandatory provisions are not resulting in a greater emphasis on restitution. Then either the coordinators aren't doing their jobs that we think they are in the U.S. Attorney's office or there is a failure as you pointed out in the system, the operation between the probation officers and the U.S. Attorneys or the plea bargaining is in the way.
Page 42 PREV PAGE TOP OF DOC I don't know what the answer is, and I know that you don't either. But it does give us a lot of material with which to inquire and further do our job of oversight on the court system in the area of our juvenilenot juvenile, but our criminal justice system. So we want to thank you for this.
Mr. SCOTT. Mr. Chairman, one of the groups you left out in your list of people that we might want to hear from is the Sentencing Commission.
Mr. MCCOLLUM. Absolutely. I agree. You pointed it out earlier. They have a role to play in this, too, because I am sure they are concerned of the outcomes, that their guidelines are not necessarily getting the results that perhaps they would want either. I don't know whether they are. Did anybody here interview the Sentencing Commissioners in any way? Was that part of your report?
Mr. STANA. We spoke extensively with their data base managers and talked about the dimensions of the system and what you can say with it and what you can't say with it, which variables were reliable and which ones weren't. As far as talking to the commission staff, we did not, right?
Mr. GRISWOLD. We talked to some of the staff.
Mr. MCCOLLUM. The only reason that I ask that is as a predicate to, obviously, our need to get with the Sentencing Commissioners and the staff and determine what their perspective is on this and what their take is on it. They should be very concerned about this and share that concern since this is a variable that is too great for normalcy.
Page 43 PREV PAGE TOP OF DOC
Mr. Gekas, we were just about to conclude this hearing. What this is about, as you may be aware, is the General Accounting Office, they have just given us a report that is rather startling, which demonstrates an extraordinary variation on fines and restitution throughout the districts and the circuits in the country in four major crime areas in the study they have done. It is almost incomprehensible how this could be. The fact of the matter is that restitution actually is down in the Federal system in the year or so since the Mandatory Victim Restitution Act has been law rather than up when our intent was to get it up. If you have any questions or wish to inquire, you are certainly welcome.
Mr. GEKAS. No, but your comments lead me to comment on the fact that when we instituted sentencing guidelines several years back, we did so partially on the hope that disparity in sentencing would be reduced nationwide. That would carry with it, you would think, a reduction of disparity of fines, restitution, and other sanctions. And what you are saying to meI have not read this yetleads us to be puzzled about that.
Mr. MCCOLLUM. That disparity is as wide or wider than ever, it looks like, and it is extraordinary. So we have a lot more to do but you have the given us the blueprint and that is all we could ask for. We thank you, all four of you, for coming out today.
Mr. STANA. Thank you, Mr. Chairman.
Mr. MCCOLLUM. The hearing is adjourned.
[Whereupon, at 10:27 a.m., the subcommittee was adjourned.]
Page 44 PREV PAGE TOP OF DOC
A P P E N D I X
Material Submitted for the Hearing Record
PREPARED STATEMENT OF GEORGE P. KAZEN, CHIEF JUDGE, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
Mr. Chairman and Members of the Committee, I am George P. Kazen, Chief Judge of the United States District Court for the Sou them District of Texas. I am providing this written testimony to you today in my capacity as Chairman of the Committee on Criminal Law of the Judicial Conference of the United States. On behalf of the Judicial Conference, I appreciate the invitation to testify.
As you requested, I will discuss the recent report of the General Accounting Office (''GAO'') entitled Federal Courts: Differences Exist in Ordering Fines and Restitution (the ''Report''). We have reviewed a draft copy of the Report provided to us by the GAO. For reasons that I will describe, we believe that the Report is of limited value due to the short time period studied, the necessarily small database of cases upon which it was based, and the methodology employed in carrying it out. We also believe that the Report's usefulness is limited because the study on which it is based was conducted prematurely. Nevertheless, I will describe the efforts being undertaken by the judicial branch to implement the Mandatory Victim Restitution Act of 1996, Pub. L. No. 104132, 110 Stat. 1214 (codified as amended in-scattered sections of 18 U.S.C.) (''MVRA'') toward the goal that fines and restitution be equitably imposed nationwide. This goal is important to us. As you know, the members of the federal judiciary share your profound concern for the victims of crime, and the judicial branch has diligently taken steps to enhance our efforts in this area, particularly with regard to victim restitution.
Page 45 PREV PAGE TOP OF DOC
Although the Report suggests in its title that differences exist in ordering fines and restitution across judicial circuits and within circuits, the Report falls short in articulating the reasons for the differences other than noting that it may be too early to see the full impact of the MVRA and that there may be mitigating circumstances which explain why restitution was not always ordered.
As the GAO itself apparently recognizes, absent a lengthy analysis of many cases from every district in the country, it would be impossible to have a credible explanation for why fines and restitution orders would vary widely from one district to the next. A good deal of variation may be entirely appropriate, especially since in cases involving offenses not covered by the MVRA, the imposition and amount of restitution is left to the sound judgment of the court, based upon the facts and circumstances of the individual case. We simply do not know if such variation is appropriate, given the information available to us now. However, we firmly believe that one should refrain from making hasty policy decisions or far-reaching conclusions based upon this Report because of problems with its approach.
It is our understanding that, in preparing this Report, the GAO relied upon data from the United States Sentencing Commission's (''Sentencing Commission'') database for fiscal year 1997 (data representing guideline sentencing during the period between October 1, 1996 and September 30, 1997) to identify the percentage of offenders who were or were not ordered to pay fines and restitution, and to document changes in the rate at which offenders were ordered to pay restitution before and after the MVRA. The GAO also attempted to identify percentage differences across judicial circuits and districts in the number of offenders who were or were not ordered to pay fines or restitution. The Report also summarized court officials' opinions about possible reasons for the differences.
Page 46 PREV PAGE TOP OF DOC
In order to determine the percentage of offenders ordered to pay fines, it is our understanding that the GAO analyzed larceny, fraud, and drug trafficking crimes because of the large number of offenders sentenced. Likewise, to determine the percentage of offenders ordered to pay restitution, the GAO analyzed robbery, larceny, and fraud crimes because there were a large number of offenders sentenced, and these crimes typically result in identifiable victims.
The Report's conclusions are of limited value due to the limited time period studied, the resulting constrained database generated, and methodologies employed in its analysis.
One of the most significant problems with the Report stems from the fact that it is based upon only one year's data. The GAO relied only upon data from the Sentencing Commission's database for fiscal year 1997. One year is a very narrow window through which to examine this area. In view of all of the variables considered by the GAO, compared to the total number of defendants sentenced, the usefulness of the data from this study is, at best, somewhat marginal.
The data studied is too narrow in other respects, as well. The GAO relied solely on the Sentencing Commission database. It did not conduct an independent review of case files, noting that a review of court case files would have been time consuming. Such a study would indeed be time consuming and costly, but it would be the only way to provide a legitimate response to the inquiry. To my knowledge, the only entity within the judicial branch that would have a reasonable ability to perform such a study would be the Sentencing Commission, since it routinely collects from all courts presentence reports and judgments with statements of reasons how the sentences were determined. In any event, the Report does not consider prosecutorial decisions nor district or circuit court decisions, which could cause differences in when and how restitution and fines are ordered. For example, by relying only on Sentencing Commission statistics, it is impossible to ascertain if the courts made findings regarding disputes as to the proper amounts of restitution allowable. Also, in certain complicated telemarketing schemes with large numbers of victims, the courts might have made factual and legal findings that determining restitution would result in the complication and prolongation of the sentencing process to the extent that it outweighed the needs to provide restitution to victims. The GAO conceded that it did not review relevant district and circuit case law in this area, making it impossible to determine whether a particular court imposed, or failed to impose, restitution and fines according to prevailing law during this period. In addition, without an independent review of case files, it is difficult to confirm if stolen money or assets were recovered, if restitution was paid prior to sentencing, or if the offense did not actually result in a financial loss because it was merely an attempted offense or a conspiracy that did not succeed.
Page 47 PREV PAGE TOP OF DOC
The Report's methodology also fails to account for significant factors that could have a substantial effect upon the imposition rate of fines and restitution. For example, the Report fails to take into account prosecutorial charging and plea decisions or varying rates at which specific types of cases occur in particular district and circuit courts. Charging and plea decisions have a critical impact on the losses subject to restitution, since only losses resulting from the offense for which the defendant was actually convicted may be awarded under the current reading of the statute. Moreover, the Report does not consider the impact that a defendant's indigency may have upon imposition of fines and restitution. Specifically, the Report did not take into account how many offenders sentenced under the sentencing guidelines during the period of October 1, 1996 through September 31, 1997 had appointed counsel due to their inability to pay an attorney. According to statistics compiled by the Administrative Office of the U.S. Courts (''Administrative Office''), defendants qualified for court-appointed counsel pursuant to the Criminal Justice Act, 18 U.S.C. §3006A, (''CJA'') in almost eight-five percent (85%) of the cases in fiscal year 1997. As such, fines and restitution rates of approximately twenty percent (20%) would indicate that the courts are properly considering the defendant's ability to pay when imposing discretionary restitution or fines, since both must be based upon a defendant's ability to pay. Similarly, it cannot be determined from the data how many defendants were deportable aliens, who appear in ever increasing numbers.
Finally, the Report only focused on numbers of cases in which fines or restitution was imposed, rather than on the amount that was imposed in a given case. Therefore, it is impossible to determine from the Report whether the total amount of restitution imposed has increased under the MVRA. Simply reporting the number of cases in which restitution is imposed will not reflect whether courts were imposing partial restitution pre-MVRA, but full restitution post-MVRA in similar cases. The only way to determine the impact of the MVRA on the amount of restitution being ordered would be to study the facts underlying the cases compared to the dollar amounts of restitution imposed. In fact, according to data published by the Department of Justice, (DOJ) the amount, of restitution imposed since the MVRA has skyrocketed. In fact, DOJ statistics reflect that the criminal debt imposed owing to third parties in FY 1997 increased by more than $1 billion during FY 1997. U.S. Dept. of Justice, U.S. Attorneys Annual Statistical Report, FY 1996 and FY 1997.
Page 48 PREV PAGE TOP OF DOC
The Report's conclusions are of limited value because the study was premature.
As noted in the Report, the MVRA was enacted on April 24,1996. Due to ex post facto considerations, most courts have held that a defendant is not subject to the provisions of the MVRA unless the offense occurred after the enactment date. The period studied was a classic transitional period during which the courts were probably dealing with a mix of cases under both old and new restitution law. Moreover, the courts, as well as the U.S. Attorneys offices, were and still are learning about these new restitution provisions and how to properly implement them. In some respects these provisions are somewhat ambiguous. For example, the case law regarding losses subject to restitution under the previous version of the statute is complex and inconsistent. The MVRA introduces new definitions of the term ''victim'' that will affect the analysis of loss. It will take some time before the law develops sufficiently to yield consistent results.
Indeed, the problem with beginning the study during this transitional period was exacerbated by the GAO's own choice of offenses to analyze. Typically, robbery, larceny, and fraud cases are complex offenses, requiring months, if not years, of investigation before arrests are made. Moreover, under current case processing, once an arrest or an indictment is filed, an additional twelve to eighteen months may pass before sentencing. As a result, the number of defendants subject to the MVRA provisions (and, thus, the impact of the MVRA) within the pool of data examined by the GAO is difficult to quantify. Certainly, more reliable data could be generated by studying the impact of the MVRA once it has been established for a reasonable period of time.
Page 49 PREV PAGE TOP OF DOCThe judicial branch is continuing to take steps to implement the MVRA and enhance the collection of fines and restitution.
The judicial branch has diligently taken steps to implement the MVRA, educating court staff about the need to ensure that restitution orders are fairly and consistently entered and that all appropriate steps are taken to enhance the collection of fines and restitution. Indeed, on May 31, 1996, shortly after the passage of the MVRA, the Administrative Office issued a comprehensive memorandum, followed by several other memoranda, that fully described the implications of the new law, as well as setting forth the criteria for its implementation. These memoranda were the ''front line'' in preparing our courts and court personnel to meet the demands of the MVRA. Copies of the memoranda are attached. The Report acknowledges that it is still too early to assess the full impact of MVRA, given that time may be needed for a body of case law to be developed and for attorneys and judges to become, familiar with and implement the MVRA.
The federal judiciary has also taken steps in this area in response to an earlier GAO study, entitled Fines and Restitution: Improvement Needed in How Offenders' Payment Schedules are Determined (GAO/GGD9889; June 29, 1998) (''Collection Report''). The Collection Report recommended that the Administrative Office establish specific guidance, as policy, on how probation officers should determine how offenders should pay their fines and restitution. The Collection Report also recommended that the Administrative Office implement procedures to ensure that probation officers are aware of and recognize the guidance as policy. The Administrative Office and the Committee expressed concerns following its review of the Collection Report and recommended substantial revisions to the GAO in a letter dated April 20, 1998, which is attached. Nevertheless, we agreed that performance could be improved in this area and developed plans to do so.
Page 50 PREV PAGE TOP OF DOC
At its December 1998 meeting, the Judicial Conference Committee on Criminal Law (''Criminal Law Committee''), which I chair, endorsed the development of a monograph on the probation officer's role in fine and restitution collection. The monograph will describe current law in this area, consolidate Administrative Office policy, and encourage close working relationships between the probation officers and the financial litigation units located in U.S. Attorney offices to ensure that court orders are enforced.
In that regard, I must stress that it is the United States Attorney which represents the United States as a litigant in all these cases and, as in any case, it is ultimately the prevailing party's responsibility to collect any judgment awarded to that party. In criminal cases, a court can require a defendant to make good faith efforts to pay a judgment, but that ability only exists while the defendant is still under supervision. When large sums are involved, collection efforts must continue long past the time that supervision has expired. Even during supervision, such collection efforts as garnishment, execution sales, etc., must be initiated by the prevailing party, not by the court. No study of fines and restitutions could be meaningful without considering the policies of the various United States Attorneys offices throughout the country.
In April 1999, the Director of the Administrative Office, Leonidas Ralph Mecham, authorized the establishment of an Ad Hoc Work Group on Fines and Restitution. Eight participants were selected from a pool of more than fifty probation officers who expressed interest in participating in this project. Work group members represented California Central, Kansas, Idaho, Louisiana Middle, Massachusetts, New York Southern, Texas Southern, and Virginia Eastern. Other work group participants included representatives from the Administrative Office's Office of the General Counsel and Federal Corrections and Supervision Division, the Federal Bureau of Prisons, the United States Sentencing Commission, and the Federal Judicial Center, which plans to revise its Financial Investigation, Desk Reference for U. S. Probation and Pretrial Services Officers later this year.
Page 51 PREV PAGE TOP OF DOC
The work group met April 2830, 1999, at the Administrative Office, and a draft outline of the monograph has been produced. Over the next six months, the draft monograph will be provided to members of the Administrative Office's Chief Probation Officers Advisory Groups, Department of Justice officials, and staff at the Executive Office for United States Attorneys for comment. At its December 1999 meeting, the Criminal Law Committee will be presented with a draft monograph for approval.
Training is occurring on other fronts, as well. Staff from the Administrative Office's Office of the General Counsel and the Sentencing Commission have been involved in ongoing in-district training on mandatory restitution since July 1998. A session on restitution was presented to approximately 150 participants (circuit judges, district judges, probation officers, prosecutors and defense attorneys) at the Federal Judicial Center's National Sentencing Policy Institute in March 1999. Later this month, 160 probation officers and 140 prosecutors and defense attorneys will receive training on the MVRA at an annual training event sponsored by the Sentencing Commission and the Federal Bar Association. This summer, all district judges will be invited to receive training on restitution by staff from the Administrative Office's Office of the General Counsel and the Sentencing Commission at three Federal Judicial Center National Workshops for District Judges. A copy of the materials that the participants receive in all of these training programs, entitled Determining Victims and Harms for Restitution in Federal Criminal Cases, is attached. Finally, the Federal Judicial Center is planning a two hour broadcast on mandatory restitution on the Federal Judiciary Television Network in late July of this year. As we continue to review our programs, we will seek to further expand efforts in this area, as deemed appropriate.
Page 52 PREV PAGE TOP OF DOC Ultimately, however, education and training can only do so much in this or any other area. Fundamentally, the decision whether or not a particular defendant is ordered to pay a fine or restitution and, if so, how much, is made like every other sentencing decision or indeed any judicial decisionby each judge on a case-by-case basis. The variables in each case are innumerable. In our adversary system, each side presents its claims or defenses to the court and each side may appeal if dissatisfied with the court's decision. Specifically, the governmentwhich is essentially the plaintiff in all criminal caseshas the right to appeal any sentencing decision which it deems contrary to law. Results of such appeals by decisions of the circuit courts, and sometimes the Supreme Court, are what create a uniform body of law.
Once again, I would like to thank you for the opportunity to provide testimony on behalf of the federal judiciary. We look forward to working with the Members of this Subcommittee and the Department of Justice on the important issues raised here today.
Mr. RICHARD STANA, Associate Director,
|Administrative Office of the|
|United States Courts,|
|Washington, DC, April 20, 1998.|
Administration of Justice Issues,
General Accounting Office, Washington, DC.
DEAR MR. STANA: Thank you for the opportunity to comment on the draft General Accounting Office (GAO) report entitled, Fines and Restitution, Financial Standards Needed for Ability-to-Pay Determinations. The judiciary takes seriously its part in the collection of court imposed fines and restitution payments, and we welcome useful analysis and recommendations that will improve our performance. We appreciate that your review has raised some issues.
Page 53 PREV PAGE TOP OF DOC
As we outlined during our meeting with you on April 7, our telephone conference calls on April 9 and April 14, and our written submissions on April 10, we have a number of concerns with certain aspects of the report. We also believe, however, that the report can be modified to be of great value.
Our general observations concerning the report are detailed in Enclosure 1 and summarized below:
The current ''theme'' of the draft, as suggested in the title and text, sends the wrong message, i.e., that probation offices do not have substantial guidance available to them.
We believe that the theme should be modified to inform readers that substantial guidance and training are already available and should be used. As GAO has noted in the draft regarding existing training in this area, and as expressed to us in recent conversations about our guidance, if courts followed these available resources, this alone would go a long way toward meeting the objectives that the GAO and the judicial branch seek to achieve. Such a modification would make the GAO report a valuable toot to help us inform the courts.
Extensive guidance does in fact exist, which resolves one of GAO's principle concerns.
It was not until our April 7 meeting that the Administrative Office (AO) realized that the study team did not reviewindeed, did not havemuch of the available guidance materials. As indicated in the extensive materials provided, as you requested on April 7, (see Enclosure 2 listing 20 documents on this subject), the AO already has developed and provided to the courts the very type of guidance materials that GAO found to be lacking. It is this very guidance which the Federal Judicial. Center (FJC) uses as its foundation for developing training.
Page 54 PREV PAGE TOP OF DOC
As pointed out by FJC Director Zobel, the FJC, using Judicial Conference and AO policies, works in partnership with the AO and field probation officers to develop the training programs and attendant materials which the draft cites with appropriate praise and recognition.
The problems described in the draft are primarily performance issues. Although some individual probation officers may not be using or even be aware of the significant guidance that is available to them, as the study's examples and officer responses seem to suggest, the report should be revised to correct the erroneous premise that guidance does not exist.
The judiciary's governance structure should be taken into account to eliminate the impression that the AO has statutory authority to mandate compliance with the recommendations, as currently stated in the draft.
We believe that the report should describe the unique organizational structure of the judicial branch of government and make clear that it functions differently from the hierarchical executive branch agencies, including policy development, training, and program implementation.
By placing the roles of each component of the judiciary's governance structure into proper context, the report will enable its readers to better understand what can be done, and by whom, to improve officer performance. For example, the Judicial Conference and the AO develop policy guidance; the FJC has authority to train; and the individual judges have sole authority to set specific payment schedules and to require compliance by probation officers with the courts' directives.
Page 55 PREV PAGE TOP OF DOC
Although there is no statutory authority for the AO, Judicial Conference, or FJC to require probation officers to attend or follow the training advice, there are steps we can take which we believe will substantially remedy this problem.
The report should clearly and prominently indicate that the review was a study of conditions in two courts and that there were markedly different practices between the two courts.
The report should recognize that the majority of the probation officers interviewed and whose cases were examined during the review in the Central District of California had not received FJC training, and many were relatively inexperienced. Moreover, the probation office in the Central District of California has one of the highest turnover rates in the country, further underscoring why the report should not attempt (either directly or indirectly) to project its findings nationally.
Thus, the title of the report is too broad in implying national ramifications, and the statement in the report that the two districts were selected because they are representative courts needs to be modified. The comment of the Department of Justice (DOJ) that these courts are not necessarily representative is correct.
The report needs to make clear that most of the cases reviewed pre-dated the requirements of the Mandatory Victims Restitution Act.
The report should explain that the study concentrated on cases in which sentencing took place prior to the enactment of the Mandatory Victims Restitution Act (MVRA). The report does not consider the important differences in the laws in effect then and now, as explained in our letter to GAO dated January 26, 1998, and in the DOJ's recent response to the draft.
Page 56 PREV PAGE TOP OF DOC
The report should take greater note of the role of the Department of Justice in the execution of fines and restitution sentences.
The DOJ, through its United States attorney's offices' Financial Litigation Units (FLU), works closely with probation officers and is the primary entity responsible for collecting payment. As was discussed during one of our recent telephone conversations, in some districts the FLUs handle criminal debt collection in its entirety, a practice of which GAO is aware but did not examine for efficacy since it was outside the scope of the study.
We suggest that the report should recognize and take greater note of the DOJ role in the execution of fine and restitution sentences and avoid the appearance to readers * who are not fully familiar with this area, that the courts have sole responsibility in this area. Enclosure 3 provides specificity in this regard.
There are steps we are considering to improve program implementation and officer performance that we would like to have included in the report.
We agree that performance can be improved, and we are developing plans to do so. Accordingly, the report should note that in response to your study, we, are actively identifying steps that we can and will take to address these issues. These steps, as conceived so far, are outlined as follows:
Strengthen the AO's program review and financial audit functions in this area.
Page 57 PREV PAGE TOP OF DOC
Review a larger, more representative sample of districts to see how these tasks are being performed, assist the districts in addressing identified problems, and revise the guidance and training as needed.
Inform chief judges and chief probation officers nationwide about the importance of these issues and work with the courts to:
1) assess how well ability-to-pay determinations are being made at the local level, and
2) take steps to ensure that probation officers and their supervisors have adequate training to execute this important function properly.
In this connection, the FJC stands ready to redistribute its Desk Reference, frequently cited in your draft as both a training guide for in-court implementation of judicial branch policies and an off-the-shelf resource for different types of investigation. It can also be updated as necessary and perhaps made available electronically, like other FJC publications. Officers may also wish to arrange local mining through the Internal Revenue Service (IRS) or other law enforcement agencies, if appropriate.
Review and consolidate all financial investigation guidance so that it can be referenced readily by probation officers, and ensure it is widely distributed and also made available electronically to all officers on the judiciary's intranet.
Consider specific guidance, if provided by the GAO, regarding particular financial standards. You have mentioned in conversations, for example, that GAO may be suggesting standards such as those used by the IRS.
Page 58 PREV PAGE TOP OF DOC
We offer two important points in this regard: First we agree with the caution raised by the DOJ that ''debt collection is not an exact science, and is not readily adaptable to specific standards or guidance for repayment to be applied nationally,'' and second, that any recommendations you, wish us to consider in this area need to be very clear and specific, such as whether you are suggesting that we promulgate particular IRS or other agency standards.
Enclosure 4 provides specific comments and suggestions for modifying the draft report. We appreciate the open dialogue with you and hope that our resulting efforts will rove performance in this area.
Thank you for the opportunity to comment on the draft. Of course, we are available to provide any further assistance or clarification that you may need.
|Clarence A. Lee, Jr., Associate Director.|
GENERAL OBSERVATIONS ABOUT THE GAO REPORT
Page 59 PREV PAGE TOP OF DOC The current ''theme'' of the draft, as suggested in the title and text, sends the wrong message., i.e., that probation offices do not have substantial guidance available to them.
The report should include all of the Administrative Office (AO) guidance provided to the courts in this area, which, in fact is substantial. As you know, our records indicate that during the audit, the AO was never asked to provide the GAO with copies of the guidance materials it has provided to the courts. The AO provided copies of these documents to the GAO on April 8, 1998, as you requested during our meeting on April 7. In addition, Enclosure 2 contains a complete list of the specific guidance provided to probation officers concerning financial investigations, including determination of an offender's ability-to-pay.
In addition, the report should recognize the benefits of local court training initiatives. The AO assists and encourages courts to develop local training initiatives and procedures that further complement national policies. We have provided the GAO with copies of correspondence sent to all courts that encourage such programs, along with documentation sponsoring local joint training sessions. As outlined in our January 26, 1998 letter to the GAO, in the past three years, the Northern District of Texas has participated in an eight-hour financial investigation training program presented by the Internal Revenue Service and sponsored by the local financial litigation unit in the United States attorney's office.
The Role of the Judiciary and its Various Components Should be Explained
As noted during our discussion and in the materials sent to the GAO on April 10, 1998, we believe that the report should describe the unique organizational structure of the judiciary, which functions differently from hierarchical organizations, such as executive branch agencies, in relation to policy development training, and program implementation. As an important part of this structure, consistent with the principles of administrative decentralization, each of the 94 district courts is granted by statute and practice a great deal of independent authority in managing its own affairs. This includes the authority to appoint supervise, and train its employees,, and. to establish local practices and rules of operation. Court officials, including chief probation officers, report to the court, not to program managers in Washington.
Page 60 PREV PAGE TOP OF DOC
The Judicial Conference of the United States establishes policies; the AO provides guidance and establishes procedures to carry out the policies; and the Federal Judicial Center (FJC) works closely with the AO and teaches court staff the practical techniques and methods they need to implement the policies and procedures.
The AO and FJC work in partnership to develop FJC training programs that are based on policies adopted by the Judicial Conference through its various committees, developed and implemented by AO and court staff. The AO's program experts and the FJC training experts have worked closed together for many years, along with probation officers, to develop and provide core operational training for court probation office staff, including financial investigation training. For many years, funds were transferred to the FJC to cover the costs of these programs; and in fiscal year 1994, at the AO's request, Congress approved a permanent transfer of $1.1 million from the courts' appropriation to the FJC budget for new court personnel. The report should recognize this relationship since the FJC training is not separate from, but is built upon and is consistent with Judicial Conference policies.
As Judge Zobel's letter states:
Lest there be any confusion about the basis for the FJC training that you described, you should be aware and I believe your report at page 17 should reflect the fact that the FJC training you cite is based on Judicial Conference and Administrative Office policies and program guidance with respect to fine and restitution. The training provides extensive additional guidance for the practical implementation of those policies, based on techniques and methods used by field officers and refined for training presentation through standard FJC curriculum development processes.
Page 61 PREV PAGE TOP OF DOC
The Report Should Recognize the AO and FJC Partnership in Developing the Financial Investigation Training
In connection with financial investigations specifically, in 1992, an interagency group was convened (the second) by the FJC to assess emerging training needs. The group included representation from the FJC, AO, United States Sentencing Commission, and representatives from the AO Chief Probation Officers Advisory Council. This group recommended the development of the financial investigation training package, referenced in the report, which incorporates all fine and restitution policies and supplements the system-wide program approved by the Judicial Conference Committee on Criminal Law (then known as the Committee on Probation Administration) in the 1980's.
The evolution of fine and restitution collection issues, a history of AO involvement, and a description of all of the training initiatives in this area are included in greater detail in Enclosure 3.
The report should clearly and prominently indicate that the review was a study of conditions in two courts.
The report should emphasize that it focuses on just two judicial districts, which represent only 1.4 percent of all offenders who have sentences that include criminal monetary penalties, that it uses 20 examples from the Central District of California and six from the Northern District of Texas, and that there are markedly different practices between the two districts. The report should also recognize that the markedly different practices could be attributed to the fact that the majority of officers interviewed and whose cases were examined in the Central District of California had not received the FJC training and were junior in experience. The report should also reference the GAO report entitled, Federal Offenders: Trends in Community Supervision (GAO/GGD97110, August 13, 1997) that describes the current offender population, which presents a greater risk to the community and has more social, psychological, and medical problems than previous populations.
Page 62 PREV PAGE TOP OF DOC
The report contains many anecdotes, which can often be used to arrive at a simple understanding of a complex issue, but they do not always present an accurate picture of fine and restitution collection in the federal system generally or in the two, districts specifically. Some of the examples in the report appear to be inaccurate, misleading, or even inflammatory due to the omission of significant facts. For instance, one example suggested that a monthly payment schedule had been set too low, but failed to take into account the offender's high medical expenses, averaging $2,000 a month, necessary for the care of the offender's child who suffers from cerebral palsy. Another example involved an offender who was not making adequate payments, but the report does not state that the offender's supervision was ultimately revoked by the court because of continued drug use and the failure to pay restitution.
In another example, the report suggests that an offender took a $6,000 European cruise with his wife even though the offender had reportedly not made a single payment toward, a $50,000 fine. In fact, the offender purchased non-refundable cruise tickets prior to his sentencing. The offender satisfied the $50,000 fine one month after the offender's release from a community corrections center and long before the offender went on the cruise. Most of the examples do not support the report's stated objectives to identify guidance available to judges and probation officers for making ability-to-pay determinations and to assess how such determinations are made. Enclosure 4 contains other suggested revisions and clarifications.
The report needs to make it clear that most of the cases identified pre-date the requirements of the Mandatory Victims Restitution Act.
As noted in our letter to GAO, dated January 26, 1998, the report seems to focus on the Mandatory Victims Restitution Act (MVRA) law currently in effect without adequate consideration of the laws in effect at the time most of the fine and restitution cases reviewed were imposed, even though the Congressional request was to determine how the MVRA was working. We have enclosed a list of suggested revisions and clarifications for the report (see Enclosure 4) that provides detailed information on why this distinction is important.
Page 63 PREV PAGE TOP OF DOC
The report should take greater note of the role of the Department of Justice in the execution of fines and restitution sentences.
We also believe that the report should recognize and take greater note of the role of the DOJ in fine and restitution collection. Again, though the stated goal of the report is the assessment of ability-to-pay decision making, in fact the report raises issues of collection which cannot be understood without describing the major role of the DOJ. For instance, some of the examples in the report do not take into account the terms of plea agreements, which include specific requirements for offenders to sell assets to facilitate payment of fines and restitution. In other instances, the examples do not acknowledge that efforts could have been made by the DOJ to pursue collection, since the court authorized immediate payment of the fine or restitution.
The report should also recognize that collections can be enhanced when offenders are required to pay fines or restitution prior to sentencing. A number of the examples support the conclusion that offenders sentenced to periods of incarceration secrete or dispose of available assets identified in the presentence investigation report prior to their release to supervision. In addition, other examples reveal that those sentenced to probation sentences (without a term of imprisonment) generally make timely good-faith efforts to pay their fines and restitution based on identified ability-to-pay determinations made by probation officers. The report should also take into account forfeitures and other civil proceedings that may impact on an offender's overall financial condition pre- and post-sentencing.
There are steps we are considering to improve program implementation and officer performance which we would like to have included in the report.
Page 64 PREV PAGE TOP OF DOC
As mentioned, we believe the report's conclusions need modification (particularly at page 46) in implying that improved guidance and oversight by the AO will result in significant increases in collection. Increased collections take place when enforced collection techniques (e.g., liens, garnishment, and seizures) are utilized by the DOJ. Ultimately, the only toot the judiciary has to address collection is the threat of supervision revocation. Revocation, in and of itself, rarely results in increased collections; rather, it reduces and nearly stops collection in most cases, since incarcerated offenders are usually unable to make significant payments.
Over the past decade, the imposition and collection of criminal monetary penalties have been the subject of scrutiny by all three branches of government. We have worked hard to establish vital lines of communication with the other branches, and our coordination efforts are much improved with the DOJ, which has the authority, responsibility, and enforcement techniques and tools to effect actual monetary payments to victim and the treasury. We do not believe that portions of the criminal debt collection process can be assessed in isolation without greater recognition of the role and responsibility of the DOJ. Enclosure 3 sets out, in part, the evolution of criminal debt collection issues and AO training efforts.
While recommendations in the report have merit, they should be modified.
While established guidelines exist only the courts have the legal authority to mandate that probation officers follow them. Nonetheless', there are steps we can and will take to help improve the performance of the probation officer by ensuring, for example, that each court makes our established guidance in this area available to officers. We can also remind officers that they should timely obtain a personal financial statement from the offender. Officers can also be reminded to obtain and review monthly written supervision reports submitted by offenders that include monthly income, including employment income and income from spouses, and other assets.
Page 65 PREV PAGE TOP OF DOC
Moreover, we can remind them that they should require offenders to submit proof of earnings and use other. appropriate supervision techniques, including home inspections, to evaluate an offender's financial condition.
We believe the report identifies problems in at least one district. As we discussed during our meeting, we already have a substantial review process in place for this specific area, but only the courts have legal authority to require compliance. A copy of the supervision case review evaluation instrument used by the AO to conduct on-site reviews of probation, offices was provided to the GAO. While we do not believe that a review of two courts justifies a recommendation to correct what is not necessarily a systemic problem, we are, as we discussed at our meeting, nonetheless considering a special program audit in other districts to gauge the extent of the problems. We also believe that we can take steps to strengthen our existing review process so that any deficiencies are noted and corrective recommendations are made to the court.
LIST OF SPECIFIC AO GUIDANCE TO PROBATION OFFICERS ON FINANCIAL INVESTIGATIONS
Guide to Judiciary Policies and Procedures, Probation Manual, Volume X, Chapter II, Part D: Financial Investigation (rev. November 30, 1990) that describes the purpose of financial investigation techniques in a probation officer's determination of ability to pay; establishes the format for reporting assets, debts, net worth, necessary expenses, and monthly cash flow to the court; establishes forms and procedures for conducting financial investigations; and outlines issues to be addressed when assessing ability to pay.
Page 66 PREV PAGE TOP OF DOC
Guide to Judiciary Policies and Procedures, Probation Manual, Volume X, Chapter III, Part B, that describes sentencing options, including financial penalties, and provides additional guidance concerning fine and restitution, addressing such issues as ability to pay, enforcement and installment payment schedules.
Excerpt from the Presentence Investigation Report, Monograph 107 on Officers Analysis of Defendants Financial Condition Under the Sentencing Report Act of 1984 (March 1992) that instructs officers to consider the factors enumerated under 18 U.S.C. §3572 with respect to ability-to-pay determinations, and includes model ability-to-pay sections in the presentence investigation report and other guidance.
Excerpt from the Judicial Conference Committee on the Administration of the Probation System materials on Conducting Financial Investigations (July 1997) that describes the purpose for the new financial investigation model that was later revised by the FJC.
Excerpt from the Judicial Conference Committee on Criminal Law Report on Financial Investigation Techniques (July 1987) that reflects the Committee's adoption of the model.
Financial Investigation Participants Handbook for U.S. Probation and Pretrial Services Officers (1988) produced by the Financial Investigation Task Force organized by the AO and approved by the Committee on Criminal Law. This model was used in developing the Financial Investigation Desk Reference (1994) produced by the FJC with AO and court personnel.
Page 67 PREV PAGE TOP OF DOC
Joint Financial Training for United States Probation Officers and Assistant United States Attorneys (October 31, 1990) memo from Chief, Probation and Pretrial Services Division that describes the joint assistant U.S. attorney and probation officer training.
Prosecutor's Guide to Criminal Fines and Restitution Collection (December 11, 1992). Memorandum from Chief, Federal Corrections and Supervision Division(see footnote 2) transmitting this monograph developed by the Executive Office for United States Attorneys which describes techniques for the enforcement of fines and restitution.
Reports from Department of Justice/Federal Judiciary Criminal Fines Task Force (October 4, 1990 and February 3, 1992) that describe efforts taken by the task force on training and other initiatives.
Violent Crime Control and Law Enforcement Act of 1994 (September 21, 1994) memorandum from Chief, Federal Corrections and Supervision Division that provides the provisions of mandatory restitution.
Update to Probation Officers on the Imposition and Collection of Fines and Restitution (September 1, 1995) memorandum from Chief, Federal Corrections and Supervision Division.
Antiterrorism and Effective Death Penalty Act of 1996 (May 31, 1996) memorandum from Chief, Federal Corrections and Supervision Division that describes the provisions of the act in connection with mandatory restitution.
Page 68 PREV PAGE TOP OF DOC
Community Restitution Provision of the Mandatory Victims Restitution Act (February 18, 1998) memorandum from Chief, Federal Corrections and Supervision Division that describes the community restitution provisions and when officers should recommend the imposition of such restitution.
Imposition of Financial Penalties in the Second Circuit (March 5, 1998) memorandum from Chief, Federal Corrections and Supervision Division that describes suggested options for officers to consider when making recommendations to the court on the imposition and collection of fines and restitution.
News and Views Article: New Debt Collection Statute (June 10, 199 1). An article that advises officers that the presentence investigation report may be retained by the U.S. attorney's office and used for collection purposes.
Copies of various articles (June 198 1, September 1983, March and June 1986, September 1988, September 1990, and June. 1997) published in Federal Probation, a quarterly journal provided to all probation officers that contain various comprehensive analysis of case law involving payment schedules and other related fine and restitution issues.
The AO has also produced, distributed or revised several publications on fine and restitution matters including:
Imposition of Fines and Restitution Orders (May 15, 1992), a pamphlet to assist officers in making recommendations to the court on criminal monetary penalties.
Page 69 PREV PAGE TOP OF DOC
What You Need to Know About Your Criminal Debt (1992), a booklet for offenders describing their responsibilities when ordered to pay a criminal monetary penalty.
Bringing Criminal Debt Into Balance: Improving Fine and Restitution Collection (June 18, 1992), a booklet describing coordination efforts between the probation officer, clerk's office, U.S. attorney's offices, and others necessary for effective criminal debt collection.
The District Court Forms Package User Guide. including Instructions on Preparing the Judgments in a Criminal Case (rev. September 1996), a manual providing step-by-step instructions on preparing judgments to enhance criminal debt collection.
EVOLUTION OF CRIMINAL DEBT COLLECTION ISSUES AND AO TRAINING EFFORTS
Over the past decade, the imposition of criminal monetary penalties has been the subject of scrutiny by all three branches of government. Fines have always been an important part of the penalty structure of federal criminal law. In recent years', an increasing number of federal offenses have included provisions for restitution and, with the passage of the Mandatory Victims Restitution Act of 1996, the imposition of such restitution became mandatory for certain offenses regardless of the defendant's ability to pay. The judiciary has strived to meet its responsibilities in this area.
Page 70 PREV PAGE TOP OF DOC As with money judgments in civil cases, sentences imposing fines and restitution in criminal cases are not self-executing but must be enforced by the party prevailing in the litigation. In criminal cases, of course, the prevailing party is the Government, and it is the United States Attorney or other DOJ counsel who have the ultimate responsibility and necessary authority to effect collection of fines and restitution on behalf of the Government or third parties. While this allocation of responsibility is clear, there are continued misunderstandings. The following history may assist in clarification.
The interest by Congress in criminal debt collection began in 1984 in the course of its ongoing review of federal debt management and criminal sentencing policies. In 19831984, both Houses conducted subcommittee hearings at which DOJ officials and judicial branch representatives testified about the methods, difficulties, and results of criminal debt collection activities. Collection of Criminal Fines: Hearing before the Subcommittee on Energy, Nuclear Proliferation, and Government Processes of the Senate Comm. on Government Affairs, 98th Cong., Sess. 56 (1984) and Criminal Fine Enforcement: Hearings before the Subcommittee on Criminal Justice of the House Comm. on the Judiciary, 98th Cong., 1st and 2nd Sess. (1984). Central to the discussion was proposed legislation that would clarify debt collection responsibility, improve intergovernmental communication to aid the collection process, and make enforcement of criminal debt easier for the DOJ through liens, tougher penalties for non-payment, and other measures.(see footnote 3)
The GAO also played an active role during this period. Among other things, the GAO reviewed seven judicial districts and, in its report, entitled After the Criminal Fine Enforcement Act of 1984Some Issues Still Need to Be Resolved (GAO/GGD862, Oct. 10, 1985), suggested that the quality and quantity of information on a defendant's financial condition varied within the same probation office and that the approach to gathering financial information was fragmented throughout the probation system. The GAO also noted the need for officers to provide more thorough and carefully verified financial information to judges. The outcome of the Congressional deliberations and the GAO's review was the Criminal Fine Enforcement Act of 1984 (Pub.L.No. 98596, 98 Stat. 3134 (Oct. 30, 1984). In the House report that accompanied the legislation, it was noted that fine collection can be improved if the judiciary imposes reasonable fines, but that it is the responsibility of the DOJ to see to it that criminal fines are paid. H.R. Rep. 98906, 98th Cong., 2nd Sess. (July 25, 1984).
Page 71 PREV PAGE TOP OF DOC
Shortly thereafter, the GAO initiated a second investigation at the request of Senator Paul Laxalt, Chairman, Subcommittee on Criminal Law, Senate Judiciary Committee. In its fact sheet, entitled Criminal Fines, Imposed and Collected as a Result of Investigations of the Organized Crime Drug Enforcement Task Force Program (GAO/GGD86101, June 27, 1986), the GAO provided information on the dollar amounts of criminal fines which could have been imposed or were imposed by the courts at sentencing and the total amount collected as of December 31, 1985 for defendants prosecuted as a result of the Organized Crime Drug Enforcement Task Force Program.
In September 1986, the chairman of the House Judiciary Committee's Criminal Justice subcommittee introduced a bill to conform the Sentencing Reform Act of 1985 with the Criminal Fines Enforcement Act of 1984. While the focus of the hearing revolved around receipting of criminal debt payments, there still appeared be some confusion about the role of the judiciary and the DOJ in criminal debt collection. Judge Gerald Bard Tjoflat testified at a subcommittee hearing and pointed out that, under the U.S. Constitution, the courts have no power to collect money judgments, even when entered in favor of the Government. Quoting Alexander Hamilton, he observed that ''[t]he Judiciary, on the contrary, has no influence over either the sword or the purse. . . . It may truly be said to have neither Force nor Will, but merely judgment; and must ultimately depend upon the aid of the executive arm even for the efficacy of its judgments. . . .''. We believe these arguments are compelling today, despite our efforts to adequately provide training to officers and to spearhead coordination efforts. The ultimate responsibility and authority for collection rest with the DOJ through its United States attorney's office financial litigation unit.
Page 72 PREV PAGE TOP OF DOC To follow up on the GAO recommendations, in 1986, the AO formed a Financial Investigation Task Force comprised of several probation officers all with substantial financial expertise, staff from the FJC and staff from the Federal Corrections and Supervision Division (then named the Probation Division) to develop a new financial investigation model for use in the presentence investigation. The model was a ''collection-based'' approach that emphasized the need for officers to calculate the offender's ability-to-pay based on ''necessary expenses'' and not simply expenses, and to separate encumbered and unencumbered assets.
The FJC with cooperation with the task force designed a multi-part curriculum to implement the new model. The model was pilot tested in several districts and refined. The training package was presented to the Judicial Conference Committee on Criminal Law (then named the Committee on the Administration of the Probation System) at its July 1987 meeting. The Committee approved further development and implementation of the financial investigation model, which provided that the format, instructions, and forms be reviewed by a certified public accountant or financial expert so the language and terms used would correspond to commonly accepted terminology.
In September 1987, the curriculum for the training package was completed. It included a trainer's guide, a participant workbook, and videotapes of interviews between officers and offenders of various kinds, including self-employed offenders, and was designed to provide uniform and timely training to officers throughout the system and to equip districts with in-court staff resources and knowledge. Each district was invited to designate an officer to attend a the program. All districts participated and completed in-district training by the end of 1988.
Page 73 PREV PAGE TOP OF DOC In 1989, the Criminal Fines Task Force was created by the AO and the DOJ to examine and further address issues concerning the imposition and collection of criminal debts. Members of the* task force included high-ranking officials from the DOJ, including Deputy Associate Attorney General Tim Murphy, an AO Assistant Director, and Judge Vincent Broderick and Judge Stanley Harris in their capacities as members of the Judicial Conference Committee on Criminal Law.
This task force first met on October 5, 1989 and held regular meetings up until late 1992. Annuals reports were prepared for the Chief Justice of the United States and the Attorney General on October 4, 1990 and February 3, 1992. The task force examined and addressed issues concerning the imposition and collection of criminal debts and met a number of objectives that contributed to better coordination in criminal debt collection and management.
Among other things, the task force played an essential role in the revision of the Judgment in a Criminal Case, making it easier for the DOJ to pursue collection of outstanding criminal debts. The task force also developed a Criminal Debt Management Plan, adopted by the Attorney General's Advisory Committee of United States Attorneys. This plan was implemented in every United States attorney's office and probation officers were appraised of the plan in a memorandum sent to all chief probation officers in October 1990.
The task force created, sponsored, and piloted the first in-district joint training conference in May 1990 in the Eastern District of Pennsylvania. Since that time, AO and DOJ staff have participated in these joint sessions held in almost every district. In fiscal year (FY) 1990, two sessions were held; in FY 91, 66 sessions were held; and in FY 92, 23 sessions were held. Overall, more than 3,150 court staff made up of probation officers and financial litigation unit staff from the United States attorney's offices received the training.
Page 74 PREV PAGE TOP OF DOC
Upon the recommendation of the task force, several publications were produced or revised and distributed, including the Prosecutors' Guide to Fine and Restitution Collections (rev. December 11, 1992); Imposition of Fines and Restitution Orders (May 15, 1992); What You Need to Know About Your Criminal Debt (1992); Bringing Criminal Debt Into Balance: Improving Fine and Restitution Collection (June 18, 1992); and the District Court Forms Package User Guide, including Instructions on Preparing the Judgments in a Criminal Case (rev. September 1996).
In 1991 the Federal Debt Collection Procedures Act of 1990 (Public Law No. 101647, May 29, 1991) was enacted for the enforcement of criminal debt. The Federal Debt Collection Procedures Act codified 18 U.S.C. §3551(d), the provisions of Federal Rule of Criminal Procedure 32, allowing the retention of the presentence investigation report by the attorney for the government for use in collection financial penalties. This provision ensured that documented assets contained in the presentence investigation report could be pursued by the United States attorney's office.
In 1992, in connection with financial investigation specifically, an interagency group (the second) was convened by the FJC to assess emerging training needs. The group included representation from the FJC, AO, USSC, and representatives from the AO Chiefs Advisory Council's Training and Education Committee. This group recommended the development of a new financial investigation training package with additional information, techniques, and skills to supplement the 1980's system-wide program approved by the Judicial Conference Committee on Criminal Law. An advisory committee was formed made up of FJC, AO staff, and local probation officers. After a series of meetings throughout the system, assignments, and pilot testing, the FJC Desk Reference was developed and refined. This training was an expansion of the earlier training and included components for pretrial services officers and procedures to analyze the finances of individual and organizational defendants with limited and complicated financial portfolios. The Desk Reference was distributed to all districts with instructions for implementing and requesting additional copies. The FJC also provides financial investigation training in its new officer orientation program. In its modified version of the 1988 package, experienced probation officers teach investigation techniques and complement the information in the Desk Reference.
Page 75 PREV PAGE TOP OF DOC
After the GAO published a report entitled, Thrift Failures, Federal Enforcement Actions Against Fraud and Wrongdoing in RTC Thrifts (GAO/GGD9393, August 10, 1993), describing the status of civil and criminal enforcement actions that the federal government had taken against suspected and actual wrongdoing in failed thrifts under the control of the Resolution Trust Corporation (RTC), the AO began working closely with the Executive Office for United.States Attorneys, the RTC and the Federal Deposit Insurance Corporation (FDIC) to establish procedures to identify, reconcile, prioritize, and develop collection strategies for financial institution fraud cases. Since 1993, the AO also has actively participated in the development and implementation of regional training programs designed to addressed coordination issues between agencies for outstanding criminal restitution orders. This program includes probation officers, United States attorney's office personnel, and legal and regulatory staff from the FDIC and RTC. The next session is scheduled in May of this year.
GAO REPORT, STANDARDS NEEDED FOR ABILITY-TO-PAY DETERMINATIONS DETAILED SUGGESTIONS FOR REVISIONS TO THE REPORT
Page 2, paragraph 1
The statistics cited should include a reference to the source. This section should also be expanded to note that there are currently 91,434 offenders on federal supervision. According to AO officials studying federal offenders sentenced over the past two years, approximately 34,196 offenders have sentences that include a fine, restitution or both. Moreover, of the 144,040 federal defendants sentenced between 19951997, almost 63 percent required court-ordered appointed counsel based on their limited financial means.
Page 76 PREV PAGE TOP OF DOC
The report should also included a note that the 495 samples are from two of 94 districts and represent approximately 1.4 percent of all offenders who have sentences that include criminal monetary penalties.
Page 2, paragraph 2
We recommend that this paragraph be revised to reflect the language contained in the guidelines or the Mandatory Victims Restitution Act of 1996:
Under the Mandatory Victims Restitution Act of 1996 and the Sentencing, Guidelines, a person sentenced to pay a fine or other monetary penalty, including restitution, shall make such payment immediately, unless in the interest of justice, the court provides for payment on a date certain or in installments. If the court provides for payment in installments, the installments shall be in equal monthly payments over the period provided by the court, unless the court establishes another schedule. 18 U.S.C. §3572. In determining the method of payment, 18 U.S.C. §3664(f)(2) directs the court to consider the financial resources and other assets of the defendant, including whether any of these assets are jointly controlled; the income and projected earnings of the defendant; and the financial obligations of the defendant, including obligations to dependants.
A restitution order may direct the defendant to make a single, lump sum payment, partial payments at specified intervals, in-kind payments, or a combination of payments at specified intervals and in-kind payments. See 18 U.S.C. §3664(f) or U.S.S.G. §5E1.1(e).
Page 77 PREV PAGE TOP OF DOC
Page 2, paragraph 3
The report should be revised to acknowledge that probation officers have prescribed criteria for determining offenders ability to pay a fine or restitution. The first criteria, approved by the Judicial Conference Committee on Criminal Law, was published in 1987 with the first national training program on financial investigations. All districts participated and completed this in-district program in 1988. As explained in the materials sent to GAO on April 10, 1998, the report should recognize that all of the relevant AO guidance served as the foundation for the FJC financial training and that as such, the training is not separate, but is an instrument of AO. policy implementation. In addition, specific. guidance has been provided to officers as listed in enclosure 1 should be included in the report.
Suggested Replacement Language: As will become clear in this report, probation officers in the two districts reviewed did not make effective use of prescribed criteria for determining an offender's ability-to-pay a fine or restitution.
Page 3, paragraph 1
As reported to GAO in our letter dated January 26, 1998, most of the cases reviewed and identified in this report were for offenses that occurred prior to the enactment of the Mandatory Victims Restitution Act (MVRA) even though the Congressional request was to determine how the MVRA was working. We would recommend that the report reflect that the cases reviewed were all pre-MVRA cases.
Page 78 PREV PAGE TOP OF DOC The MVRA became effective for offenders convicted on or after April 24, 1996. An offender sentenced prior to April 24, 1996 remains subject to the prior law. Since the report describes cases sentenced after January 1, 1990 up through and including October 1997, at least six and one half years of sentencings (out of a maximum of seven and one half years, of data) would have been handled under the prior law. As a result, the report does not take into account important differences between the prior and new laws as noted below.
The report states that according to the MVRA, offenders should pay their court-ordered fines and restitution as a lump sum payment and that if a lump-sum payment cannot be made, installment payments are to be made. Although these statements are generally true since full and immediate payment of restitution is presumptive in the MVRA. However, judges have considerably more discretion under pre-MVRA law.
For example, pre-MVRA law provides that if the court ordered a defendant to pay restitution, it was to be paid immediately unless the court specified a different payment schedule. 18 U.S.C. §3663(f)(3). If the court ordered payments to be made over a specified period or pursuant to an installment plan, the period could end no later than (1) the end of the period of probation, if probation is ordered, (2) five years after the end of a term of imprisonment if * no probation is ordered, and (3) five years after the date of sentencing in any other case. 18 U.S.C. §3663(f)(2).
Fines were treated nearly the same under prior law, since the court had the authority, in the interest of justice, to establish a payment plan. If the court chose this option, the statute provided that, unless the court ordered otherwise, payments were to be made in equal monthly installments over a period not to exceed five years after the offender was released from prison. 18 U.S.C. §3572.
Page 79 PREV PAGE TOP OF DOC
Suggested Replacement Language: Most offenders in our sample were sentenced under the provisions of pre-MVRA law and paid their court-ordered fines and restitution, not as a lump sum, but with installment payment schedules.
Delete Sentence 2
Delete Sentence 3
Page 3, paragraph 1
We recommend that this paragraph be revised to acknowledge that the AO has defined realistic payment schedules but note that such a task is difficult since officers are confronted each day. with thousands of individual and difficult cases whose financial condition changes over time. We also recommend that this paragraph acknowledge that the AO enlisted the services of the FJC to conduct training for officers on financial investigations that you have outlined elsewhere in the report.
Suggested Replacement Language: The AO recommends that probation officers set realistic payment schedules based on specific guidance as incorporated in the FJC financial investigation training to probation officers. This training. . . .
Page 4, paragraph 1
We recommend that the statement that probation officers were not required to follow the financial investigation training in making ability-to-pay determinations be revised.
Page 80 PREV PAGE TOP OF DOC
Suggested Replacement Language: Recognizing the judiciary's unique organizational structure, probation officers are not required to take the training or adopt the lessons learned in the training if they take it.
Page 4, paragraph 2
Suggested Replacement Language: The two districts reviewed developed local training initiatives and procedures that should have further complement national policies.
We also recommend that this paragraph be expanded to, note that this conclusion was based on a review of 182 cases in the Central District of California and 204 cases in the Northern District of Texas in which 70 cases in the Central District of California were identified by GAO has having inconsistencies compared to the 29 cases in the Northern District of Texas identified as having inconsistencies.
Page 5, paragraph 2
We recommend that this paragraph be expanded to note that the officers interviewed by GAO dispute these conclusions and believe that these statements do not accurately characterize discussions they had during the interviews.
Suggested Replacement Language: Based on the cases reviewed, it appears to be distinctions between an officer's ability to make determinations about an offender's ability-to-pay when an offender is sentenced to probation (without imprisonment) with those sentenced to a period of incarceration. Offenders sentenced to imprisonment secret or dispose of assets identified in the presentence investigation report while in prison and prior to release to supervision. In addition, it appears that an offender's earning potential diminishes following a period of prison. Collections could be enhanced if offenders are required to pay fines and restitution prior to sentencing.
Page 81 PREV PAGE TOP OF DOC
Page 5, paragraph 3
The report states, that some offenders identified expenses as necessary, which limited their ability to pay fines to the government or restitution to victims.
As outlined later, according to the districts, in some instances where such expenses where noted, outstanding fines and restitution obligations had already been satisfied. The report should be revised to reflect those instances.
Page 6, paragraph 1
According to the report, personal financial statements were often 18 months old or older for offenders who were on installment payments, so probation officers were not in a good position to tell whether the payment amount should be changed.
The report should be revised to clarify that personal financial statements are not the sole means by which officers review the financial conditions of offenders. Each month offenders are required to complete and submit to the probation officer monthly written supervision reports that include monthly income, including employment income, including income from spouses, as well mother assets. Offenders are also required to submit proof of earnings to the probation officer each month. Officers also use other supervision techniques, including home inspections, to evaluate an offender's financial condition.
Page 6, paragraph 3
Page 82 PREV PAGE TOP OF DOC
The report should also acknowledge that the disparity in the number of issues identified by the GAO in the California and Texas districts. Of the examples sited, only six came from the Northern District of Texas while the remaining 19 came from the Central District of California. Moreover, as outlined later, some of the examples are inaccurate and omit specific circumstances of mitigation.
Page 7, paragraph 1
We think it would be helpful to note the differences between collection actions in probation cases and in cases where the offender has served a period of incarceration.
As noted later, in some instances, the assets the auditors identify as being available for payment toward criminal monetary. penalties had been identified by officers in the presentence report which pursuant to F.R.Crim. P. 32 is provided to the defendant and the government at the time of sentence and had been liquidated shortly after sentencing or during the offender's imprisonment. At the beginning of supervision, I in some instances several years later, the previous identified assets were no longer available. The Federal Debt Collection Procedures Act recognized this problem and authorized the United States attorney's office to retain the presentence investigation report for collection purposes.
Page 9, paragraph 2
The report states that the U.S. Sentencing Commission also has responsibility for interpreting sentencing provisions of the law. The report should be revised to clarify the Sentencing Commission's role. Nowhere in titles 18 or 28 is the Commission given the responsibility for interpreting the law. Only the courts interpret the law.
Page 83 PREV PAGE TOP OF DOC
Suggested Replacement Language: The Sentencing Commission has the responsibility to establish sentencing policies and practices by means of sentencing guidelines and policy statements. 28 U.S.C. §991 and 994.
Page 10, paragraph 3
Please see our previous comments as they related to page 2, paragraph 1.
Page 13, paragraph 3
The report indicates that the GAO did its work from March 1997 through October 1997, but it makes no reference to the fact that the auditors first begin their review of the case files in the Northern District of Texas and the Central District of California in April 1996 when the GAO begin a self-initiated study of fees assessed on federal offenders to defray costs incurred by the federal government in the administration of justice. We recommend that the report be revised to reflect the total amount of timefrorn April 1996 through October 1997auditors spent reviewing cases in the districts.
We recommend that the report be revised to include financial standards and other guidance documents provided to probation officers as provided in Enclosure 2.
Page 84 PREV PAGE TOP OF DOC
We recommend that the reports describe the natural nexus between various judiciary components in relation to policy development, training, and local implementation. The report should note that local courts are assisted and encouraged to develop local training initiatives and procedures that further complement national policies. The report should also note that in the past three years, officers in the Northern District of Texas have participated in an 8-hour financial investigation training program presented by the Internal Revenue Service and sponsored by the local financial litigation unit in the United States attorney's office.
Page 19, paragraph 3
As outlined in the FJC letter to GAO commenting on the report, there appears to be confusion over the use of the Consumer Expenditure Tables published by the Bureau of Labor Statistics in the training, and the report unfairly characterizes officers necessary expense determinations. We recommend that all references that criticize officers for presenting recommendations that do not comport with the tables should be deleted in the report.
Inconsistencies In Ability-To-Pay Determinations Created Apparent Inequities
We do not believe the inconsistencies described in the examples are based on inequities in ability-to-pay determinations but instead reflect the inconsistencies between pre-MVRA and MVRA law. We recommend the examples be deleted from the report. If the examples are not deleted, we recommend the report include the following:
Page 85 PREV PAGE TOP OF DOC
The report should acknowledge the DOJ role in collections, including the Inmate Financial Responsibility Program (IFRP). Under the program regulations, prison officials can collect inmate earnings or facilitate collection of fine and restitution from assets. identified in the presentence investigation report.
In most instances, the GAO has identified installment payment cases but fails to take into account that offenders were sentenced to periods of incarceration. According to the judgments in those cases, in most instances offenders were directed to make immediate fine and restitution payments. The judgments further direct officers to establish payment schedules at the commencement of supervision if outstanding unpaid balances remain. For incarcerated offenders who are ordered to pay financial penalties immediately, the IFRP authorizes collection by prison officials. The Department of Justice also generally takes immediate action to pursue collection using all of its various enforcement techniques when the judgment authorizes immediate collection.
The GAO reiterates its list of issues during, the review that have been previously identified in other portions of the report. We refer to other comments provided elsewhere in this summary.
No Mandatory Standards Exist for What Types of Assets Should be Made Available for Lump Sum Payments.
Page 86 PREV PAGE TOP OF DOC
While the GAO report makes a minor reference to the personal financial statement in a footnote, suggesting that the statement is used by officers in compiling financial information in a complete and uniform manner, one of the focal points of the handbook and Desk Reference is the AO staff developed Personal Financial Statement, Probation Form 48A, which is used by 6fficers not just to compile financial information, but as a tool for analyzing the financial information and determining an offender's ability-to-pay.
We believe standards have been provided for what types of assets should be made available for lump sum payments. However, only the courts have the legal authority to mandate that probation officers follow them. We recommend that these examples be deleted from the report. If the examples are not excluded, we recommend that they be clarified as follows.
Page 27, paragraph 1
According to the GAO report, an offender was sentenced to 12 months in prison and 36 months supervised release. He was ordered to pay a fine of $15,000 and restitution of $153,000. The offender reported a monthly income of $3,000 and was required to make monthly installment payments of $100. While under supervision, he sold a second home valued at over $850,000 and did not report what he did with the $290,000 proceeds in equity from the sale. Court records show the Proceeds were not applied toward the fine or restitution. The probation officer supervising the case said he did not know what the offender did with the proceeds from the sale.
We recommend that the report clarify that the offender was sentenced in another district and the judgment ordered payment of the restitution within 7 days from sentencing to the United States attorney's office to be transferred to the victim and that the fine was also due immediately. According to court records, the Central District of California accepted supervision of this case one year later. The property was sold in accordance with the terms of a plea agreement, prior to sentencing for $680,000 rather than the amount of $850,000 that the offender estimated on his personal financial statement prepared five months prior to sentencing for a net profit of $52,000. It appears that no action was taken at the time of sentencing to ensure that the proceeds from the sale were applied to the restitution order.
Page 87 PREV PAGE TOP OF DOC
Page 27, paragraph 2
According to the GAO report, the offender was sentenced to 72 months in prison and 36 months of supervised release. He was ordered to pay a fine of $32,000 and a restitution of $8,000. The auditors reported that while the offender reported a monthly income of $2,800 and expenses of $1,700 and was required to make monthly installment payments of $200. While under supervision, the offender sold $20,000 work of securities but did not report what he did with the proceeds.
We recommend that the report be revised to note that restitution was ordered by the court to be recovered by the government through forfeiture under RICO provisions, leaving the offender responsible for the $32,000 fine and that the financial litigation unit in the United States attorney's office has been unsuccessful in recovering the money. We also recommend that the reported be revised, since the monthly expenses for this offender are approximately $1,950 rather than $1,700.
Page 28, paragraph 1
According to the GAO report the offender was sentenced to 36 months in prison and 36 months of supervised release. He was to pay over $100,000 in restitution. The offender was required to make month payments of $400 to his victims. He reported a monthly income of $4,600 and expenses of $3,200. The probation officer said he was aware of the a painting owned by the offender that was valued at $185,000 but the offender was not required to sell or borrow against it to pay restitution to his victims.
Page 88 PREV PAGE TOP OF DOC
We recommend that the report acknowledge that while the offender initially reported sole ownership of the painting, he later reported to the probation officer that the painting was owned jointly with his mother and she was not willing to sell.
Page 28, paragraph 2
According to the GAO report the offender was sentenced to 46 months in Prison and 36 months of supervised release. Restitution in the amount of $1,450 was ordered. The auditors report that the offender reported earnings of $1,638 a month and expenses of $1,190. A monthly payment schedule of $50 was set. The offender reported receiving a legal settlement of $6,500 but was not required to use the money to pay the restitution.
We recommend that the report be clarified to note that the legal settlement was awarded in Philadelphia and the officer did not become aware of it until after the offender had spent the money. We also recommend that the report mention that the offender was a serious drug offender whose release was ultimately revoked for no less than 12 urinalysis stalls, failure to report for three months, a positive drug test, and for his failure to pay the restitution.
Page 28, paragraph 3
According to the GAO report the offender was sentenced to 3 years probation, fined $3,000 and ordered to pay restitution of $1,995. The auditors report that the offender had over $65,000 in a personal savings account and was allowed to pay $90 per month. The GAO also reports that the officer stated that as long as the offender made the $90 payments he left him alone.
Page 89 PREV PAGE TOP OF DOC
The report should mention that the offender was sentenced in another district and had already paid the restitution in full.
Page 29, paragraph 2
The report states that an offender, a doctor, was sentenced to 60 months of probation and 3,000 hours of community service. The offender was also fined $10,000. The probation set the installment payment at $200 per month. The offender reported real estate worth over $1,000,000 with over $900,000 in equity and over $500,000 in cash assets including $20,000 in a personal bank account. The probation officer supervising the case told us that it was not necessary for the offender to pay off the fine any sooner than by the end of the offender's 60-month probationary period.
The report should note that the. offender's financial situation changed as a result of her conviction and that the United States attorney's office had a lien filed against her property and the fine was satisfied.
Page 30, paragraph 1
According to the GAO report the offender was placed on 3 years probation and ordered to pay a $1,500 fine. The offender reported having over $25,000 in the bank. The probation officer on this case also told us that immediate payment was not expected of offenders and set a payment schedule of $50 per month.
Page 90 PREV PAGE TOP OF DOC The report should mention that the offender resided in a community corrections center for the first 6 months of supervision and that the fine was paid in full.
No Mandatory Standards are Required for Setting Installment Schedules
We believe standards have been provided to officers to assist them in setting installment schedules. As noted above, we recommend that the report acknowledge that only the courts have the legal authority to mandate that probation officers follow the standards. We also recommend that the report recognize that collections can be enhanced,if offenders are required to pay fines and restitution prior to sentencing since some of the following examples support our long-held belief that an offender's earning potentials are diminished following a period of incarceration. Moreover, some of the examples support the belief that an offender has time during incarceration and prior to release to supervision to secret or dispose of identified in the presentence investigation report. We recommend that the following examples be deleted from the report. If the examples are not excluded, we recommend the following clarifications be included in the report.
Page 33, paragraph 1
According to the GAO report the offender was sentenced to 33 month in prison and 36 months supervised release. He was also fined $3,000. The offender reported an average monthly income of over $2,000. The probation officer said she determined an installment payment schedule by suggesting payment amounts until the offender heard an amount he thought he could live with.
Page 91 PREV PAGE TOP OF DOC We recommend that the report note that the judgment orders the payment of the fine immediately and that any unpaid balance be paid during the term of supervision as directed by the probation officer. We also recommend that the report acknowledge efforts could have been made by the U.S. attorney's office to pursue collection while the offender was incarcerated either through the Bureau of Prisons IFRP or by pursuing any assets identified in the presentence report. We would also note that the probation officer states that at no any time was the offender allowed to set his own payment schedule.
Page 33, paragraph 2
According to the GAO report the offender was sentenced to 5 years in prison and 4 years of supervised release. He was also fined $6,000. The offender reported a monthly income of $2,200. The probation officer selected a monthly payment amount of $100 because he said it was a nice round number.
We recommend that the report note that the fine was due immediately and that the court ordered that following the offender's incarceration the unpaid balance of the fine will be paid during the term of supervision at a rate amortized over 3 years. We also recommend that the report acknowledge that efforts could have been made by the U.S. attorney's office to pursue collection while the offender was incarcerated either through the Bureau of Prisons IFRP or by pursuing any assets identified in the presentence report. We would also note that officer also denies stating that $100 was a nice round number and it is the officer's practice to require an offender owing a fine to begin paying $100 a month at the initial meeting unless the offender can substantiate why a lower payment is appropriate.
Page 92 PREV PAGE TOP OF DOCPage 33, paragraph 3
According to the GAO report the offender was sentenced to 18 months in prison and 36 months supervised release. He was also fined $3,000. The offender reported a monthly income of $4,600. The probation officer said that the offender's previous probation officer had established a payment schedule of $50 per month and the officer did not know how that figure was arrived at but it appeared to be a good faith payment.
We recommend that the report note that the judgment ordered that the fine due immediately and any unpaid balance be paid during the term of supervision as directed by the officer. We also recommend that the report acknowledge that efforts could have been made by the U.S. attorney's office to pursue collection while the offender was incarcerated either through the Bureau of Prisons IFRP or by pursuing any assets identified in the presentence report.
We also recommend that the report be clarified to note that monthly income of $4,600 was gross income and that the offender was initially instructed to pay $50 per month based upon unstable income, but that as the income stabilized the payments were increased to $150.
Page 34, paragraph 1
According to the GAO report the offender was sentenced to 24 months in prison and 36 months supervised release. He was ordered to pay restitution of $2.8 million. The offender reported a monthly income of $4,000. The probation officer said that he arrived at a monthly payment of $50 by bartering with the offender.
Page 93 PREV PAGE TOP OF DOC We note that the officer states that the word ''barter'' was never used or implied during the interview with GAO. We would recommend that the report note that the offender made a $10,000 payment at sentencing and that the U.S. attorney's office had liens filed on the offender's property.
Page 34, paragraph 2
According to the GAO report the offender was sentenced to 3 years in prison and 60 months of supervised release. He was ordered to pay $1 million in restitution. The offender reported monthly income of $1,700. The probation officer accepted $50 as an installment amount because, he said, he didn't know how to handle this case.
We recommend that the report clarify that the $50 a month payment schedule was based upon the offender's monthly income of $600 which excluded social security benefits. We would note that the officer recalls telling the auditor that he was not familiar with the procedures of how the offender might sell his bank stock.
Arbitrary Methods Affected Lower Income Offenders
We do not believe that officers use arbitrary methods to determine an offender's ability-to-pay or that such methods have affected lower income offenders. We believe the below examples reflect distinctions between pre-MVRA and current law and identify that offenders sentenced to probation supervision (without imprisonment) generally make timely, good-faith efforts to pay fine and restitution on identified ability-to-pay determinations made by the probation officers. We recommend that the examples be deleted from the report. If the examples are not excluded, we recommend the inclusion of the following information.
Page 94 PREV PAGE TOP OF DOC
Page 35, paragraph 2
According to the GAO report the offender was sentenced to I month in prison and 60 months supervised release. She was ordered to pay about $8,000 in restitution. The offender,, who has four children, reported monthly income of $737 from welfare. The probation officer set the monthly installment payment at $50.
We recommend that the report mention that the offender was living with her parents to reduce expenses and was paying restitution in the amount of $140 a month. Over time the offender was required to assist with living expenses and the payment amount was appropriately reduced to $50 per month.
Page 35, paragraph 3
According to the GAO report the offender was sentenced to 24 months probation. He was ordered to pay $900 in restitution. The offender had a wife and four children. He reported a monthly income of $800. The probation officer set the monthly payment at $50.
We recommend that the report reflect that the offender had a $130 a month cash flow.
Page 35, paragraph 4
According to the GAO report the offender was sentenced to I day in prison and 36 months supervised release. She was ordered to pay $32,000 in restitution. She reported monthly income of $2,400. The probation officer set the payment schedule at $1,000 a month.
Page 95 PREV PAGE TOP OF DOC
We recommend that the report note that the offender is living at home with her mother and reports $1,800 per month income against expenses of $500 per month.
No Mandatory Standards Exist for the Type or Amount of Expenses Considered Necessary.
As mentioned above, standards have been published for the type and amount of expenses probation officers should consider necessary when determining an offender's ability-to-pay. However, only the courts have the authority to make such standards mandatory. Moreover, we believe the following examples illustrate how an offender's earnings potential are diminished following a period of incarceration. In each of the examples, an offender was released from prison and reported expenses conducive to the offender's standard of living prior to incarceration. We recommend that the examples be deleted from the report. If the examples are not deleted, the following clarifications should be noted in the report.
Page 38, paragraph 1
According to the GAO report the offender was sentenced to 12 months in prison and 36 months supervised release. He was ordered to pay over $160,000 in restitution. The offender reported average monthly income of about $12,000 and over 14,000 in necessary monthly expenses for himself, his spouse, and one dependent child. The necessary monthly expenses include mortgage payment expense of about $6,000, entertainment expenses of $350, clothing expenses of $400, and $5,000 of unspecified miscellaneous expenses. The offender was required to make monthly restitution payments of $300.
Page 96 PREV PAGE TOP OF DOC We recommend that the report mention that the financial litigation unit in the United States attorney's office had a lien filed on the offender's home.
Page 39, paragraph 1
According to the GAO report the offender was sentenced to 60 months probation. He was also fined $50,000. He reported a monthly income of $5,000 for himself and $10,000 for his spouse. The offender reported over $12,000 in necessary monthly expenses, including over $5,000 in monthly mortgage expenses and $1,500 in monthly groceries and supplies expenses. The offender reported taking a $6,000 European cruise with his wife. However, the offender had not made a single payment toward the fine in the first 10 months of probation. The probation officer had not established a payment schedule at the time of our review.
We recommend that the report be revised to note that the offender purchased the non-refundable cruise tickets prior to his sentencing and that the offender satisfied the $50,000 fine one month after release from a community corrections center and.long before going on the cruise.
Page 39, paragraph 2
According to the GAO report the offender was sentenced to 10 months in prison 24 months of supervised release. He was also fined $5,000. The offender reported monthly income averaging $2,500 and expenses of $2,335. His month payment was set at $210. He made two payments and stopped because of a self-declared inability to pay because of all of his expenses. After he stopped making payments, the offender moved from an $800 monthly rental home to a $1,400 monthly rental home in the same area. The probation officer took no action.
Page 97 PREV PAGE TOP OF DOC
We recommend that the report be revised to note that offender moved to a community with a higher standard of living that was 160 miles away from his previous residence.
Page 40, paragraph 2
According to the GAO report the offender was sentenced to 30 months in prison and 36 months of supervised release. He was also ordered to pay $35,000 in restitution. He reported a monthly income of about $7,600 and expenses of about $7,500. His reported monthly expenses included $800 for car payments and $960 for private school, tuition. The probation officer originally set the monthly installment payment at $100 and increased it to $200 at the time of our review.
We recommend that the report mention that the judgment ordered that the restitution be paid over the period of supervision in installments determined by the probation officer based on the offender's ability to pay and that the court also ordered that the schedule and ability to pay be reevaluated on a year to year basis. We believe the report should further be revised to reflect that the offender's excessive expenses were due, in part, to the offender having a child that suffered from cerebral palsy and medical bills averaging approximately $2,000 a month.
Page 40, paragraph 3
According to the GAO report the offender was sentenced to 6 months in prison and 36 months of supervised release. He was also ordered to pay $20,000 in fines and about $134,000 in restitution. The offender reported monthly income of $3,400 and monthly expenses of $3,600, including rental expenses of $1,850 and a car lease at $400. He was required to make monthly payment of $500. The report adds that despite reporting expenses that regularly exceeded income, the offender, who had no dependents, moved from the apartment costing $1,850 per month to an apartment costing $2,400 per month while under court supervision.
Page 98 PREV PAGE TOP OF DOC
We recommend that the report be corrected to reflect that the individual moved from an apartment that cost $1,450 to one that cost $1,085.
Page 41, paragraph 2
According to the GAO report the offender was sentenced to 6 months in prison and 48 months of supervised release. The offender was ordered to pay about $33,000 in restitution. The offender reported monthly income of over $7,500 and expenses of about $7,000. Included in the expenses was a monthly payment of $750 to the offender's sister. The probation officer set the monthly payment at $100.
We recommend that the report be revised to mention that the officer had made an agreement with this 64-year-old offender had agreed to pay off the restitution in full when she turned 65 and would receive a lump sum retirement settlement.
Cases with Outdated or Missing Financial Statements
We recommend the following corrections.
Page 4344, 1 paragraph
According to the GAO report the offender was sentenced to 6 months in prison and 24 months of supervised release. He was also ordered to pay $38,00 in restitution. The probation officer set the installment payment at $200 a month, and this amount was not changed. The offender's most current financial statement was 60 months old. Other information in the his file showed that his income has almost double; there was no information on changes in expenses, assets, or cash flow.
Page 99 PREV PAGE TOP OF DOC
We recommend that the report be corrected to reflect that the offender's $1,500 income and liabilities have remained constant throughout the period of supervision.
Page 44, paragraph 2
According to the GAO report the offender was sentenced to 5 months in prison and 36 months of supervised release. She was also ordered to pay $75,000 in restitution. The probation officer set the installment payment at $150 per month. Her latest financial statement was 36 months old and at the time of our review showed monthly income of over $4,000 and monthly expenses of $3,385. The offender requested a reduction in payments, claiming financial hardship. During the time of the hardship, the probation officer approved recreational travel for the offender outside the court district boundaries.
We recommend that the report be revised to note that the offender was earning $4,000 a month prior to her incarceration but that her income changed to average $1,250 during the term of supervision. The report should also be corrected to reflect that the travel was work related and not for recreational purposes.
Page 100 PREV PAGE TOP OF DOC62438d.eps
Page 101 PREV PAGE TOP OF DOC
Page 102 PREV PAGE TOP OF DOC62438ac.eps
Page 103 PREV PAGE TOP OF DOC
Page 104 PREV PAGE TOP OF DOC62438bb.eps
Page 105 PREV PAGE TOP OF DOC
Page 106 PREV PAGE TOP OF DOC62438ca.eps
Page 107 PREV PAGE TOP OF DOC
Page 108 PREV PAGE TOP OF DOC62438cy.eps
(Footnote 1 return)
Title II of Public Law 104132.
(Footnote 2 return)
The titles Federal Corrections and Supervision Division and the Probation and Pretrial Services Division are synonymous.
(Footnote 3 return)
Since this time, the DOJ has been given explicit authority to collect restitution on behalf of nongovernment victims and has gained additional tools that assist in collection of unpaid fines and restitution, including the new debt collection provisions of the Mandatory Victims Restitution Act. Today, the DOJ has collection authority tantamount to the authority of the Internal Revenue Service.