LOCATION: Paragon Home Lending
DOCKET NO.: 12-9012
DECIDED BY: Roberts Court (2010-2016)
CITATION: 572 US (2014)
GRANTED: Oct 21, 2013
ARGUED: Feb 25, 2014
DECIDED: May 05, 2014
Facts of the case
Benjamin Robers was involved in a mortgage fraud scheme. His role was to pose as a legitimate buyer of houses, make fraudulent loan applications⎯by misrepresenting his income and his intention to live in the house and repay the mortgage⎯then allow the loan to default by not paying it. Eventually, the bank foreclosed on the houses and then sold them to pay back the lenders. Robers was able to secure two houses under this guise.
After government officials discovered the scheme but prior to indictment, Robers pled guilty to one count of conspiracy to commit wire fraud because the funds for the fraudulent loans were disbursed electronically (wired) by lenders. A federal district court sentenced him to three years of probation and ordered him to pay restitution pursuant to the Mandatory Victims Restitution Act (MVRA) in the amount of $218,952.18 for both incidents. The amount was calculated by finding the difference between each loan and the resale amount of each house that was foreclosed (the offset value). Robers appealed the restitution award and argued that the wrong offset value was used in the calculation; instead, the fair market price at the time of foreclosure should have been used. The U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s holding in part, vacated attorney fees and “other expenses” from the restitution sum, and remanded the case back to the district court to draw a new order with the corrected sum.
Does a defendant who has fraudulently obtained a loan and thus owes restitution for the loan under the Mandatory Victims Restitution Act (MVRA) return “any part ” of the loan money by surrendering title to a house that has fallen under foreclosure?
Media for Robers v. United States
Audio Transcription for Opinion Announcement – May 05, 2014 in Robers v. United States
Justice Breyer has our opinion this morning in case 12-9012, Robers versus United States.
This case requires us to interpret rather technical statutory provision that concerns restitution.
The restitution of convicted criminal offender must provide to a victim of a property crime.
Now, the petitioner was involved in fraudulently obtaining bank loans amounting to about $470,000.
When he didn’t pay his mortgage, the bank took title to two houses that were collateral for the loans and then the banks later sold the houses.
The real estate market was falling at that time and they sold them for about $280,000 so the petitioner says, “When you calculate my restitution you should subtract from the $470,000.”
Not the $280,000 that the bank has got back from the sale, but a larger amount than that and then the amount that represented the higher value that the houses had had when the banks first took title to them because remember the real estate market was falling and that’s the amount he wanted subtracted, not the amount that the bank has got back when they sold the houses.
Now, in support of this contention, the petitioner points through a statutory provision that says that when return of the property lost by a victim is impossible or inadequate, the offender must pay the victim “an amount equal to” the value of the property which we’ll recall was $470,000, less the value as of the date the property is returned of any part of the property that is returned.
So he says in effect that part of the property taken was returned when the banks took title to the houses and therefore that that property has to be valued as of the date he returned it.
Well, it’s all in writing in case you have trouble following that 2:09.
And the problem for the petitioner is that the statute talks about the property he took and his return of that property.
Here, he did not take the houses.
He took the money and since he took the money that the bank’s loan to him and that property was not returned at all until the money from the houses was obtained by the bank then that’s the money you have to subtract.
That is what the statute says.
You’ve read in this way.
It’s easier to administer and there are other provisions of the statute which will give the courts adequate authority to make certain that this reading does not produce double counting or any other form of unfairness.
We explained this in more in our opinion.
The Seventh Circuit concluded that the relevant statutory provision refers to the money taken not for the collateral received and we affirm its determination.
Our decision is unanimous.
Justice Sotomayor has filed a concurring opinion in which she is joined by Justice Ginsburg.