When financial fraudsters are prosecuted, their sentence may also include a huge restitution fine to be paid back to the victims for their losses. But the fine is typically so high that the fraudster has no legitimate hope of ever being able to pay it back. Although they may have taken in millions or billions of dollars in their scheme, all of their financial “success” came from bilking victims. Once they are out of jail and have to get a regular job, there’s no possible way for them to pay back a fine which may be in the range of 6-7 figures and may be well more than they will make in their remaining lifetime. So then what happens to that fine? Does some percentage of the fraudster’s legitimate income get garnished to go to the fine? Does the fine just go away after a certain number of years?
Without doing any further research, I would expect that any wages or other income they would receive would be garnished to the extent allowed by law, continuing until the judgement is paid off or until the person’s death. I don’t think they’re expected to pay the entire amount back, they’re just supposed to be forced to live on whatever minimum is required to not be garnished, regardless of how much money they make.
Wouldn’t the estate need to pay the fine up to the value of the estate?
It’s there in place in case the fraudster attempts to profit from his crimes. mainly by selling the rights to his story.
Sure, but that estate is going to be pretty minimal, because if the offender had many assets they would have been seized to pay restitution. There might be some assets that would be protected, but anything else would be already gone.
It wasn’t financial fraud, but this shipyard worker started a fire on a Los Angeles class submarine, causing $450 million dollars in damage. He was convicted of arson, sentenced to 17 years in prison, and ordered to repay $400 million in restitution. He could have been fined up to $250,000 as well, though, so lucky him!
It seems a judgment like this is more of society’s way to ensure someone stays poor the rest of their life, rather than victims being made whole again.
You can’t squeeze blood out of a turnip.
You can’t really say that based just on the amount. I know of someone who was ordered to pay $7 million in restitution - his required payments are 10% of his income after certain deductions are made for taxes and such.
YouTube search: “hydraulic press”.
The OP seems to be mainly interested in bigger financial fraudsters.
As noted, future income can be garnished but it is also means there’s a mechanism in place to seize assets in case some money “magically” turns up that the person hadn’t reported.
Going to court to order garnishment, monitor it, etc. takes resources, i.e., money. For a perp at the very low end of the economic scale it doesn’t pay to bother with this so they often don’t have to pay back anything. But imprisoning debtors is making a comeback in the US.
The guy who burgled me is still paying restitution years after the fact. He is on probation, with all that entails, until all his victims are paid in full. I get a check every month. Sometimes 5 buck, sometimes as much as 15. It’s been 8 years and counting.
Had a case where a bunch of guys burgled the clubhouse of a group I was involved with. One of the people charged was caught fairly soon after in another burglary and quickly pled guilty; the head of the club got an order for restitution - something pretty small, about $15,000. Everyone said why bother, he’s doing a life sentence on the installment plan (6 months here, 2 years there, etc.) He’ll never have any money…
A year later, just after he gets out of jail, he’s a passenger in a car crash and gets a settlement from the insurance company. It’s a small town, so the insurance guy knew the situation and alerted the club prez, who immediately went down to the court and put a lien on the cheque before it was issued, and we got our money. Anything can happen.
Remember OJ was convicted of armed robbery trying to retrieve allegedly stolen memorabilia. He tried to re-acquire the goods outside of the legal route because the moment he showed up in court trying to get possession of valuable merchandise, it would have been claimed by the Goldmans to help repay his judgement over their son’s death.
A convicted felon could always win millions of dollars playing the lottery. At the time of this post, the Mega Millions jackpot is $422 million with a cash value of $254 million. I’d assume if the felon had a $12 million judgement against him the state would deduct that from his winnings.