Summary
This Sixth Circuit opinion determines whether the Mandatory Victims Restitution Act permits district courts to award prejudgment interest as part of a criminal restitution order. The court concluded that prejudgment interest is authorized under the MVRA to fully compensate victims for the time value of money lost during the period of deprivation. Additionally, the court upheld the district court's discretionary calculation of interest based on a victim's sworn declaration, finding it sufficiently reliable and not speculative.
Topics
Practice areas
Questions Presented
- Whether the Mandatory Victims Restitution Act of 1996 permits a district court to award prejudgment interest as part of a restitution order.
- Whether the district court's calculation of prejudgment interest was speculative and therefore an abuse of discretion.
Holdings
- The MVRA does not preclude, and indeed permits, district courts to award prejudgment interest as part of a restitution award when such interest is necessary to make the victim whole.
- The district court did not abuse its discretion; its interest calculation was supported by reliable evidence and was not speculative.
Key quotations
“Because federal courts have no inherent power to award restitution, restitution orders are proper only when and to the extent authorized by statute.” (at 351)
“prejudgment interest . . . ensure[s] compensation ‘in the full amount of each victim’s losses.’” (at 351)
Factual background
From 2016 to 2022 Fike, while working as a bookkeeper for J.M., fraudulently used J.M.'s financial accounts to pay personal expenses, defrauding J.M. of $363,657.67. She pleaded guilty to wire fraud and aggravated identity theft. The district court ordered restitution of the principal plus $42,209.41 prejudgment interest.
Procedural history
The district court awarded $405,867.08 in restitution (principal plus $42,209.41 prejudgment interest) under the Mandatory Victims Restitution Act. Fike appealed, arguing the MVRA does not permit interest and that the interest calculation was speculative. The Sixth Circuit reviewed the restitution award de novo and the interest award for abuse of discretion.