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Supreme Court Resolves Circuit Split on Calculating Restitution in Mortgage Fraud Case

In Robers v. United States (No. 12-9012), issued today, the Supreme Court concluded that in a mortgage fraud case, the Mandatory Victims Restitution Act requires "a sentencing court [to] reduce the restitution amount by the amount of money the victim received in selling the collateral, not the value of the collateral when the victim received it." 

The Court was interpreting a provision of the Mandatory Restitution Act of 1996 stating that when return of the property lost by the victim is "impossible, impracticable, or inadequate," the offender must pay the victim "an amount equal to . . . the value of the property" less "the value (as of the date the property is returned) of any part of the property that is returned."  The question before the Court was whether "any part of the property" is "returned" when a victim takes title to collateral securing a loan that an offender fraudulently obtained from the victim. 

Robers had been convicted of wire fraud for submitting fraudulent loan applications to banks for the purchase of two houses.  After he failed to make loan payments, the banks foreclosed on the mortgages, took title of the houses, and subsequently sold them in a down market. The sentencing court ordered Robers to pay restitution in the amount the banks loaned to him, less the sum the banks received from the sale of the houses. On appeal, Robers argued that the sentencing court should have reduced the restitution amount by the value of the houses at the time the banks took title to them, which was higher than the price for which the houses sold. In a brief opinion, the Supreme Court upheld the Court of Appeals' decision rejecting Robers' argument, resolving a split among the Circuits.

For more on the opinion, see this SCOTUSblog post
 

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