UNITED STATES OF AMERICA v. TIMOTHY L. RITCHIE
US Court of Appeals for the Fourth Circuit, Diaz, May 30, 2017,
Restitution – A fraudulent HUD loan application qualifies as “an offense resulting in … loss … of property of a victim” entitling payment of restitution to the holder of the loan.
(Dissent in part- Diaz – Restitution should be based on the value paid by BoA, not the original value of the loan)
(Split with 9th Circuit)
In 2005, in order to receive a loan Ritchie prepared a Housing and Urban Development (HUD) form where he stated that he was putting down over $1 million cash to purchase the property. In reality, he did not. The loan was approved by Countrywide bank and Ritchie subsequently defaulted, owing apx. $2.5 million.
Countrywide was bought out by Bank of America in 2008, which foreclosed on the property and sold it for apx. $1.1 million ($1.4 million less than the amount of the loan).
Ritchie was charged with making a false statement on a matter within the jurisdiction of the federal government under 18 USC 1001(a)(2).
Ritchie pled guilty and as part of his sentence was required to pay restitution of $1.4 million to Bank of America.
Ritchie challenged the restitution, arguing that 1) a false statement isn’t a property crime entitling the bank to restitution and 2) he shouldn’t have to pay the full amount to Bank of America because Bank of America bought Countrywide at a discount.
Held: The Court disagreed. Once the government presented evidence proving that Ritchie owed $1.4 million, the burden was then on Ritchie if he wanted to show that the number should be lowered.
Restitution- The government most prove by a preponderance of the evidence that the defendant’s offense of conviction directly and proximately caused harm to the victim.
Restitution – Where one bank takes over another (including its loans), restitution can be made to the acquiring bank either: because the new bank now owns the loan OR because the new bank has claim to restitution that would be paid to the old bank.
Restitution- the burden of showing that a victim delayed unreasonably in selling property (or otherwise neglected it) belongs with the defendant who seeks to avoid being tagged as the “proximate cause” of the loss in value of that property.