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Restitution

By: Derek Hawkins//February 14, 2017//

Restitution

By: Derek Hawkins//February 14, 2017//

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7th Circuit Court of Appeals

Case Name: United States of America v. Minas Litos, et al

Case No.: 16-1384; 16-1385; 16-2248; 16-2249; 16-2330

Officials: WOOD, Chief Judge, and POSNER and HAMILTON, Circuit Judges.

Focus: Restitution

The three defendants were indicted in 2012 on charges of having committed and conspired to commit wire fraud, in violation of 18 U.S.C. §§ 1343 & 1349, by extracting money from lenders (including Bank of America) that had financed the sale of properties owned by the defendants in Gary, Indiana. The fraud lay in the fact that the defendants had represented to Bank of America (we can ignore the other lenders, who are not affected by this litigation) that the buyers of the properties were the source of the down payments on the houses, whereas in fact the defendants were the source, having given the buyers the money to enable them to make the down payments. They had also helped the buyers provide, in their loan applications to Bank of America, false claims of creditworthiness. In each of the transactions the defendants walked away with the purchase price of the property they had sold minus the down payment amount, since the “down payment” they received was their own cash, which they’d surreptitiously transferred to the impecunious buyer. The defendants’ guilt of fraud is not at issue. The issue is the propriety of the restitution, in the amount of $893,015, that the district judge ordered the defendants to make to Bank of America, on the ground that they had cheated the bank by pretending that the buyers, not they, were the source of the down-payment money for the sale of their houses. The judge credited a written declaration by a Bank of America representative that “had [the Bank] known the true source of [the] down payment funds, [it] would not have issued the subject loans” to the buyers of the properties. The district judge rejected the defendants’ argument that the bank was not entitled to restitution because it had been a coconspirator; he ruled that the bank “did not participate in the kickbacks to buyers or provide false information on loan applications.”

Reversed and Remanded in part

Affirmed in Part

Full Text


Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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