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U.S. v. Block

Firm More Coconspirator Than 'Victim' of Its CFO's Conduct, Is Not Entitled to Restitution

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OPINION AND ORDER

*1  Defendant Brian Block was convicted on all counts of a six-count indictment following a jury trial in June and July of 2017. The offenses relate to Block’s preparation of fraudulent financial statements in 2014 for American Realty Capital Properties, Inc. (“ARCP”), a publicly traded real estate investment trust for which he served as Chief Financial Officer. On November 8, 2017, this Court sentenced Block to 18 months’ imprisonment and a fine of $100,000. Following sentencing, VEREIT, Inc. — the successor entity to Block’s former employer, ARCP — submitted a request for an order of restitution against Block in the amount of approximately $35 million. Because the Court concludes that VEREIT is more accurately regarded as a coconspirator than a “victim” of Block’s crimes, VEREIT’s request for restitution is denied.IFederal courts have no inherent power to order a defendant to pay restitution for his crimes. United States v. Reifler, 446 F.3d 65, 127 (2d Cir. 2006). However, the Mandatory Victim Restitution Act, 18 U.S.C. §3663A (“MVRA”), provides that the court “shall order” a defendant to “make restitution” to any “victim” of certain offenses. And the Victim and Witness Protection Act, 18 U.S.C. §3663 (“VWPA”), provides for restitution awards on a discretionary basis to any “victim” of certain offenses. Both the MVRA and the VWPA define the word

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