Today the U.S. Court of Appeals for the Eleventh Circuit agreed with my argument that anyone who is injured as the result of a financial fraud is a “crime victim” protected by the Federal Crime Victims’ Rights Act. The ruling, found here, could have major implications for the prosecution of financial fraud crimes in the future and will significantly expand restitution available for those crimes.
A bit of background: On December 2, 2008, Sarasota, Florida Attorney Alan E. Tannenbaum and I filed an emergency petition on behalf of Janis W. Stewart and 111 victims of a financial fraud committed by Philip William Coon. The petition challenged a ruling by U.S. District Judge Elizabeth A. Kovachevich on November 21, 2008, that these borrowers on loans from Coast Bank were not "crime victims" of Coon's criminal conspiracy because they were not specifically listed in the criminal charges against him. The petition contended that, because the borrowers suffered financial losses from the fraud, they were "crime victims" entitled to the protections of the federal Crime Victim's Rights Act, including the right to restitution. The petition cited documents showing that Coon received more than $1.1 million from his crime, which he used to buy overseas vacations, fine wine, expensive jewelry, a $20,000 piano, and other luxury items. The petition stated that "while Coon was enjoying the high life on his ill-gotten gains, the borrowers were all paying interest on the money financing it." The petition sought restitution for the borrowers.
The borrowers’ petition arose out of scheme by Coon to "skim points" off of residential mortgage loans. On November 5, 2008, Coon pled guilty to the scheme in U.S. District Court in Tampa. One hundred and twelve borrowers of these loans then filed a motion with Judge Kovachevich to be recognized as "victims" of his crime of conspiracy because they had to pay extra on their mortgages because of the crime. Judge Kovachevich denied the motion because the government's charges only specifically listed Coast Bank, Coon's employer, as the victim of the crime.
In a ruling released today, the Eleventh Circuit held that borrowers were protected “victims” under the Crime Victims Rights Act (CVRA) because they suffered financial harms because the became legally obligated to pay the point that Coon skimmed off the loan and had to pay interest on the point. The Eleventh Circuit stated: “The CVRA does not limit the class of crime victims to those whose identity constitutes an element of the offense or who happen to be identified in the charging document. . . . Under the plain language of the statute, a party may qualify as a victim, even though [he] may not have been the target of the crime, as long as [he] suffers harm as a result of the crime’s commission.”
The ruling is an important victory for crime victims. It means that all those who have been harmed by a financial crime are entitled to be protected in the federal criminal justice system. As a result, all such victims will be entitled to confer with the prosecutor on the charges, to obtain restitution for the crime, and to make a statement at sentencing about the proper punishment for the crime.
My co-counsel, Alan Tannebaum, has laid out the next steps in the case: “We intend to go back into district court and seek restitution for the victims who have been harmed by this crime. The defendant lived the high life through this crime, and the victims should not be left bearing the financial burden.”
Related Posts (on one page):
- All Those Harmed by a Federal Financial Crime Are "Victims" Protected by the Crime Victims' Rights Act
- Crime Victims Right Petition in the Eleventh Circuit