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| In the immortal words of the Wu-Tang Clan: "Dollar dollar bill, y'all." |
By Elizabeth Kruska
In criminal cases, the court has to consider the question of restitution if there is a victim that suffers uninsured losses. Let’s use an easy example. Suppose Danny Defendant goes out and smashes up Victor Victim’s mailbox. Sure, Danny gets charged with unlawful mischief, and maybe he pays a fine or goes to jail as a sentence. But where does that leave Victor? He’s got no mailbox through no fault of his own, and if he has to replace it because of what Danny did, he’s out the cost of a new mailbox.
Enter restitution. The court can order that Danny pay Victor the cost of the mailbox.
In criminal court restitution is very narrow and is only limited to uninsured losses suffered by a direct victim of the crime. So if Victor’s neighbor, Noreen Neighbor, decides to go get a new, ultra-strong mailbox because she’s afraid that Danny might damage her mailbox, she doesn’t get restitution for that, since she’s not a direct victim of the crime. And if Danny had a no-deductible insurance policy that covered his mailbox, he wouldn’t be able to collect restitution because he’d have insurance available to pay for the loss.
This is a pretty easy explanation for how this works. As I’m sure you can imagine, it gets more complicated.
Here, SCOV tackles such a problem. Diane Stewart had been employed as an assistant in a law firm. She had access to the checks, and on a couple of occasions, wrote checks to herself that she wasn’t authorized to write. She cashed the checks. When it was discovered that the checks were fraudulently cashed, the bank replaced the money to the law firm so that the firm wasn’t short the money taken by Stewart.
When Stewart’s case resolved, the court turned to the issue of restitution. The bank wanted to be reimbursed, because although she didn’t steal directly from the bank, they were out the amount of the checks, having replaced the law firm’s money. The trial court ordered restitution to the bank, and Stewart appealed, arguing that the bank was not a “direct victim” and acted more like an insurer.
SCOV affirms the trial court.
First of all, SCOV reasons that the bank actually is an appropriate victim. Banks aren’t supposed to honor checks that aren’t properly payable. A forged check is such a check. By law, if the bank honors a forged check that it learns is forged, the bank has to pay back the account holder. That means that the forger essentially steals from the bank, since the bank ends up having to replace the funds.
There's also an argument that the bank essentially acted as an insurer. Under the criminal restitution statute, the criminal court cannot order restitution to an insurance company that worked in its capacity as an insurer. Meaning, if someone got into a car accident and the other party’s insurance had to pay out, that insurance company can’t seek reimbursement through the criminal restitution process. They can do whatever they want in civil court (and they probably will), but we’re unconcerned with that here. And even if there are civil remedies, the criminal court doesn’t put off restitution where appropriate just because there might be a civil suit that could be filed.
If the insurance company was the victim, like in the situation where someone burns down their house for insurance money, then sure, the insurance company can be a victim in terms of restitution. But that’s not the situation here.
Anyway, the bank doesn’t charge a premium like an insurance company does. And that’s because their job is to be a bank, not to insure against risk.
In this case, the law firm doesn’t get to get restitution from Stewart because they’ve already gotten their money back—the bank took care of that. Since the bank was directly deprived of the funds as a result of Stewart’s embezzlement, it was proper for the court to order her to repay the bank.
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