If a defendant facing an embezzlement charge repays her victims in full prior to trial, can a district court reduce that defendant’s criminal forfeiture debt by the amount repaid to her victims? At first glance, one might reasonably assume that such an “offset” would be permissible: after all, the victims have been made whole and the defendant has repaid the losses suffered as a result of her conduct. The imposition of a criminal forfeiture order on top of the restitution already paid by the defendant, moreover, would effectively force the defendant to pay twice for the same crime. But do district courts have the statutory authority to allow for such an offset? The U.S. Court of Appeals for the Second Circuit recently addressed whether such restitution offsets could be used to lower, or even eliminate, criminal forfeiture orders. In a per curiam decision issued by a panel comprised of Judges Robert Katzmann, Rosemary Pooler and Gerard Lynch in United States v. Bodouva, the court held that, absent explicit statutory authority allowing judges to lower criminal forfeiture amounts by the amount of any restitutive payments already made, a district court does not possess the authority to allow an offset under current law.
Background and Lower Court
On March 16, 2016, Christine Bodouva, the former chief operating officer of her father’s Manhattan-based architectural design firm, William N. Bodouva & Associates, was indicted on one count of embezzling funds from the firm’s pension benefit fund, in violation of the Employee Retirement Income Security Act (ERISA). United States v. Bodouva, 853 F.3d 76, 78 (2d Cir. 2017). This indictment contained a forfeiture allegation directing that Bodouva “forfeit to the United States … any property, real and personal, that constitutes or is derived from proceeds traceable to the commission of the offense alleged in” the indictment. Id. On April 8, 2016, after her indictment but prior to her trial, Bodouva paid $126,979.63 to the firm’s pension benefit fund. Id.
