The art of swindling is as old as time, and governments have worked for centuries to combat the practice. Indeed, North Carolina first criminalized the obtaining of property by false pretenses in 1811. In more recent years, the legislature has focused on a set of victims who are especially vulnerable to financial fraud: older adults. Financial exploitation of such a person is its own kind of crime—a crime that may be subject to more severe punishment than other types of fraud and that encompasses a broader array of deceptive behavior. Assets obtained through such fraud may also be frozen or seized pending the resolution of the criminal case to ensure that the victim receives the restitution he or she is owed.
Tag Archives: restitution
Many of you probably remember the “I’m Just a Bill” segment from the Schoolhouse Rock! series. It explained—through a musical number that will be stuck in your head all day—how a bill becomes a law. I didn’t compose a song, but in today’s post I’ll attempt to explain what actually happens to the thousands of civil judgments entered for various monetary obligations in criminal court. Continue reading →
On December 1, 2017, two new rules will kick in for waivers and remissions of costs, fines, and restitution. Today’s post offers some preliminary thoughts on those new rules. Continue reading →
When a defendant is convicted of more than one crime, there are decisions to be made about how the sentences for those convictions will fit together. Generally speaking, they may be consolidated for judgment, allowed to run concurrently, or set to run consecutively. If at least one of those judgments suspends a sentence and places the defendant on probation, the judge has an additional decision to make regarding when probation begins. Continue reading →
Suppose a crime victim offers a reward related to a crime—money for information leading to the return of stolen property, or perhaps information leading to the apprehension of an assailant. If the reward works and leads to a person’s conviction, may the court order the defendant to pay the victim restitution for the reward? Today’s post considers that question, and the related question of whether it is proper to order restitution to third parties that offer rewards, like crime stoppers. Continue reading →
Most people can get behind the idea that inmates should, if able, do some sort of work during their incarceration. By statute, “[i]t is declared to be the public policy of the State of North Carolina that all able-bodied prison inmates shall be required to perform diligently all work assignments provided for them.” G.S. 148-26. Inmate labor comes in many forms: work by jail inmates to benefit the government (described here); work inside an institution to accrue earned time (described here); work on a community work crew (G.S. 148-32.2); work for Correction Enterprises (which makes some really nice furniture and other products that any North Carolina government employee or retiree may purchase up to $2,500 of per year, G.S. 148-132); and work release. Today’s post is about work release.
Work release is the temporary release of a sentenced inmate to work on a job in the free community, outside the jail or prison, for which the offender is paid by the outside employer. Lots of good things can happen when an inmate is able to participate in work release. The inmate may be able to keep his or her regular job during the term of imprisonment. The sheriff or the prison system may be able to recoup the costs of the prisoner’s keep from the work release earnings. Victims may receive restitution and the inmate’s dependents may receive support payments from work release earnings. And many studies (like this one, for example) have shown a link between work release and lower recidivism rates. Data from the North Carolina Sentencing and Policy Advisory Commission routinely show work release inmates as having a lower percentage of reincarceration within two years of release (16.2% for work release inmates, compared to 24.1% for all inmates released in fiscal year 2008/09, according to the 2012 recidivism report).
Unfortunately, the laws applicable to work release can be a little confusing.
Felonies. When a person is given an active sentence for a felony, the court may recommend work release. G.S. 15A-1351(f). This is merely a recommendation, but under G.S. 148-33.1, the Secretary of Public Safety “shall authorize immediate work-release privileges for any person serving a sentence not exceeding five years in the State prison system and for whom the presiding judge shall have recommended work release.” That requirement is subject to the caveats that the person must have suitable employment and that “custodial and correctional considerations would not be adverse to releasing the person without supervision in the free community.” G.S. 148-33.1(a). “Suitable employment” and “custodial and correctional considerations” are fleshed out in the prison policy on work release. The same policy document also notes that an inmate with a sentence in excess of five years is not eligible for work release until he or she is within three years of the maximum release date. E.0703(c)(1). There is no statute or rule governing court recommendations against work release, but my sense is that such recommendations are generally honored.
Misdemeanors. When a person is given an active sentence for a misdemeanor, the judge may recommend work release. With the consent of the defendant the judge may also order work release. G.S. 15A-1351(f). This mandatory order is an exception to the general separation-of-powers rule that a judge cannot require a custodian to administer a sentence in a particular way. If a judge orders work release for a misdemeanant, the sheriff is obliged to carry out the order—which is why such orders should not be entered without advance coordination between the judge, the lawyers, the sheriff or jail administrator, and, of course, the prospective work release employer. When work release is ordered for a misdemeanant, the order must include the date the work is to begin, the place of confinement, a provision that work release terminates if the offender loses his or her job, and a determination about the disbursement of earnings, as described below. G.S. 15A-1353(f).
Place of confinement. Sometimes a person’s prospective work-release job will not be convenient to his or her ordinary place of confinement. With that in mind, the prison system has authority to move inmates within the prison system to a more suitable facility, and to contract for the housing of work-release inmates in the county jails as provided in G.S. 148-22(a). When a misdemeanant is ordered to work release, the court may, notwithstanding any other provision of law, commit the defendant to a specific jail or prison facility in the county of the sentencing court to facilitate the arrangement. With prior consent the court may sentence the person to a jail or prison in another county. G.S. 15A-1352(d). (Note that this authority may be limited this year as part of a broader plan to remove misdemeanor offenders from the prison system. See Senate Bill 744, section 16C.1.(b).)
Probationers. In general, the court should not make any recommendation for work release at the time of sentencing when the defendant receives a suspended sentence and probation. Any such recommendation may be made at the time of revocation if the defendant’s probation is revoked. G.S. 148-33.1(i). It is a fairly common practice for a judge to order work release during a term of special probation (a split sentence), although there is no explicit statutory authorization for or prohibition against that. (The practice was noted without disapproval in State v. Stallings, 316 N.C. 535 (1986).) The General Statutes likewise do not spell out any rules for work release during a term of Confinement in Response to Violation, although it apparently is not allowed as a matter of policy for a CRV served in prison.
Money. An inmate’s work release earnings generally go to the custodian (DAC or the sheriff, as the case may be), who determines how the money will dispersed. The custodian or court, as appropriate, must determine an amount for things like travel expenses to and from work, child support, and money required to comply with any judgment rendered by the court. G.S. 148-33.1(f). A judge ordering work release should also set the amount to be deducted by the custodian for the costs of the prisoner’s keep. That amount should be based on the specific facility’s actual costs; it is not a per diem set by statewide statute or rule. For any prisoner ordered to an active sentence, the court shall consider recommending to the Secretary of Public Safety that restitution be made out of the defendant’s work release earnings. G.S. 15A-1340.36; 148-33.2.
Escape. If a person fails to return to prison from his or her work release assignment, it’s an escape—unless the person returns to confinement within 24 hours, as provided in G.S. 148-45.
Clearly work release requires some additional legwork and administrative wrangling. But given the benefits described above, it seems like it’s often worth the effort.
Suppose my home is broken into and many things are stolen. My insurance company compensates me for the damage to the house and the items that were taken. Two related questions arise if the person who broke in is charged and convicted. Can the defendant be ordered to pay restitution to my insurance company? And can the defendant be ordered to pay restitution to me even though I have already been made whole by my insurer?
In North Carolina, both questions are answered by G.S. 15A-1340.37(d). Under that law, “[n]o third party shall benefit by way of restitution as a result of the liability of that third party to pay indemnity to an aggrieved party for the damage or loss caused by the defendant . . . .” In other words, restitution may not be ordered directly to the insurer. Our appellate courts have long recognized this rule, which was previously codified in G.S. 15A-1343(d). See State v. Maynard, 79 N.C. App. 451, 453 (1986) (“The court thus cannot order defendant to pay restitution to the insurer.”); State v. Stanley, 79 N.C. App. 379 (1986) (vacating the trial judge’s order of restitution to the victim’s insurer). Cf. State v. Ray, 125 N.C. App. 721 (1997) (upholding a trial court’s recommendation that a defendant pay $82,000 to Medicaid, which had paid the victim’s medical bills, as a condition of the defendant’s post-release supervision).
G.S. 15A-1340.37(d) goes on to say that “the liability of a third party to pay indemnity to an aggrieved party or any payment of indemnity actually made by a third party to an aggrieved party does not prohibit or limit in any way the power of the court to require the defendant to make complete and full restitution to the aggrieved party for the total amount of the damage or loss caused by the defendant.” So, the court can order the defendant to make full restitution to me even though my insurer has already covered the loss—which means I can recover twice as far as the restitution laws are concerned. There is no statutory requirement that the court limit restitution to the amount unrecovered through insurance. However, given the practical reality that many defendants will not have the wherewithal to make full restitution, it is a common practice (and within the discretion of the court) to limit restitution to the victim’s deductible or copay.
Not every state takes the same approach to these issues. For instance, some states expressly allow restitution to insurance companies, on the theory they, too, are “victims” or “aggrieved parties” within the language of the applicable state law. See, e.g., State v. Merrill, 665 P.2d 1022 (Ariz. Ct. App. 1983) (concluding that Arizona’s restitution statute was best fulfilled by interpreting “victim” to include any entity suffering economic loss resulting from a defendant’s criminal activity, including the principal victim’s insurance company). As explained by our court of appeals, our legislature has taken a different path, focusing the restitution law on those “who directly suffered damage or loss as a consequence of criminal misconduct,” and expressly excluding insurers, who are, after all, “in the business of insuring against anticipated risks,” and who “derive profit by assuming [them].” Stanley, 79 N.C. App. at 383.
Regarding the possibility of a double recovery by the victim, that too is a justifiable policy choice by the legislature. Better to allow the victim to recover twice than to let the defendant off the hook merely because his or her victim had the good sense to carry insurance. Moreover, restitution is not just about making the victim whole. It is also viewed as promoting the defendant’s rehabilitation and restoration, and as a deterrent to future crimes.
Though the prohibition on restitution to directly to insurers is clear, an insurer sometimes winds up with the money in any event. Many insurance policies include a clause subrogating the insurer to any collateral recovery made by the insured. In N.C. Farm Bureau Mutual Ins. Co., Inc. v. Greer, 54 N.C. App. 170 (1981), for example, an insurer sought to recover $2,500 paid to an insured under a policy covering loss of a cow by theft. The victim of the crime had also received $7,500 in restitution from the man convicted of stealing his cow. The insurance policy included a clause stating that “no loss shall be paid hereunder if the insured has collected the same from others.” Id. In light of that clause—and the fact that the victim reported the value of the cow as $5,000 in his insurance claim—the court of appeals affirmed the trial court’s award of $2,500 to the insurance company.
May a judge delegate to a probation officer the task of setting the amount of restitution owed to a victim? For several reasons, my standard answer to that recurring question is no.
The main reason for my answer is the restitution statutes themselves. The law says that restitution should be ordered “when sentencing a defendant,” G.S. 15A-1340.34(a), and goes on to say that any documentation related to the restitution amount “shall be shared with the defendant before the sentencing hearing,” G.S. 15A-1340.35(b). A post-sentencing determination by a probation officer does not follow that statutory chronology. More generally, the statutes consistently describe the restitution determination process as something to be done by “the court.” The court may “delegate to a probation officer the responsibility to determine the payment schedule” for restitution and other monetary obligations, G.S. 15A-1343(g), but the restitution amount should be set by the court.
Allowing restitution to be set by a probation officer could raise several issues. First, the appellate courts have repeatedly told us that the restitution amount must be supported by evidence adduced at trial or at sentencing. E.g., State v. Elkins, 210 N.C. App. 110, 126–27 (2011). A prosecutor’s statement or a restitution worksheet, standing alone, is insufficient evidence. State v. Wilson, 340 N.C. 720 (1995). An amount set by a probation officer outside of court would seem to raise similar issues of proof.
Second, in determining the restitution amount, the court “shall take into consideration the resources of the defendant.” G.S. 15A-1340.36(c). If the court orders partial restitution based on the defendant’s inability to pay, it must “state on the record the reasons for such an order.” Id. If the restitution amount is not set at sentencing the defendant may not have the requisite opportunity to present information about his or her inability to pay.
Third, allowing restitution to be set by anyone other than the judge could raise a constitutional concern about delegation of a core judicial function to a non-judicial officer. Our state courts have not explored that issue, but it comes up a lot in federal court. In United States v. Johnson, the Fourth Circuit held that determination of the restitution amount is a non-delegable judicial function. 48 F.3d 806, 809 (4th Cir. 1995). The court recognized the problem as a “difficult one” in light of the trial courts’ need to “remain efficient” by relying on the support services of probation officers, id., but then went on to collect cases from across the country reaching essentially the same conclusion. If it’s a delegation problem in the federal system, where the probation officers actually work for the court, then it’s arguably an even greater problem in our state system, where the officers fall under the executive branch. Our probation officers have broad delegated authority after Justice Reinvestment, but even those statutes make no mention of restitution.
None of this is to say that the judge may not ask for help in determining the proper restitution amount. The court may ask a probation officer to complete a presentence investigation of “any defendant,” G.S. 15A-1332(b), and the court could limit the scope of that investigation to the sole issue of restitution. The probation officer must complete that investigation “promptly” and report back to the court orally or in writing.
In light of the concerns outlined above, I think the court should not order restitution “to be determined” by the probation officer. If more information is needed, the better practice is to continue sentencing on the issue of restitution, allowing the officer to investigate the issue and then report back to the court, which then sets the final amount.