Restitution for Drug-Buy Money

Back in March I wrote a post on restitution to government agencies, setting out the general rule in G.S. 15A-1340.37(c) that “[n]o government agency shall benefit by way of restitution except for particular damage or loss to it over and above normal operating costs . . . .” I mentioned in that post that I would write later about restitution to law enforcement agencies for money spent as part of a drug buy, so I’ll do that today.

Under G.S. 90-95.3(a), when any person is convicted of an offense under the Controlled Substances Act, the court may order “restitution to any law-enforcement agency for reasonable expenditures made in purchasing controlled substances from him or his agent as part of an investigation leading to his conviction.” When a defendant receives money for drugs from a confidential informant or undercover officer and then is convicted based on that exchange, the law clearly allows the court to order the defendant to repay that money as restitution. Such a reimbursement does not run afoul of the general prohibition against charging a defendant for the ordinary costs of investigating and prosecuting crime.See Evans v. Garrison, 657 F.2d 64 (4th Cir. 1981) (holding it improper for a court to order $2,500 restitution to the North Carolina Bureau of Investigation for its investigative expenses, as they were part of the Bureau’s “normal operating costs”) It is, rather, a way of returning a particular sum of money from a defendant to the agency that exchanged it for the contraband, avoiding any “unjust enrichment” to the offender. State v. Stallings, 316 N.C. 535 (1986); Shore v. Edmisten, 290 N.C. 628 (1976).

The law’s application is a little more complicated when the restitution order goes beyond the actual money that changes hands in the controlled buy that results in a conviction. For example, what if the police have to set up multiple buys before they get the proof they need or the person they want? And what about any money paid to the informant for the service of doing the deal?

The first question was answered in State v. Reynolds, 161 N.C. App. 144 (2003). In Reynolds, a confidential informant bought drugs from the defendant in a controlled buy, but the police never brought charges against the defendant for that sale. A few months later another buy was arranged, but the defendant fled the scene before any money changed hands. The defendant was convicted for possession with intent to sell and deliver based on drugs found in his car after the second encounter. Although he was never convicted for the first transaction, he was nonetheless ordered to pay restitution to the police for the $30 the confidential informant paid him for the drugs. The court of appeals upheld the order, saying the money fell within the “investigation leading to [the defendant’s] conviction” language of G.S. 90-95.3. At a minimum, then, we know the law allows restitution for more than just the cash that changes hands at the scene of the crime of conviction.

The second question, regarding money paid by the police to the informant himself or herself for the service of buying drugs from the defendant, has not been addressed by our appellate courts. On the one hand, the “reasonable expenditure” language of G.S. 90-95.3 could, in light of Reynolds, be read to allow restitution for some costs beyond the drug-buy money itself. On the other hand, if the law were read too broadly it would begin to infringe on the rule against restitution the government for “normal operating costs.” Reynolds can’t really be read as anything other than a purge of unjust enrichment—the restitution order in that case was, after all, limited to the very sum of cash the police informant had paid to the defendant. Any additional money paid to an informant starts to look like the salary paid to an undercover officer—and that would be an ordinary expense that could not, under Shore and G.S. 15A-1340.37(c), be offset by restitution. (As an aside, subsection (c) of G.S. 90-95.3, a provision added to the law in 1999 regarding the cleanup of a clandestine drug laboratories, perhaps treads close to this line to the extent that it requires the court to order restitution to the police for “personnel overtime, equipment, and supplies.”)

I don’t see many cases from other jurisdictions dealing with the propriety of a restitution order tied to wages paid to a police informant; most cases are about the drug-buy money itself. Just last month in State v. Jones the Ohio Court of Appeals struck a restitution order that included $1,600 for money the police had paid to an informant for her services, saying “the government or a police department [wa]s not a victim merely because they expended funds in order to gather evidence against the offender.” 2010 WL 2354201 (Ohio Ct. App., June 8, 2010), also available here.

As always, I’m interested to hear your thoughts.

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