Second Circuit: Criminal restitution includes payments for losses incurred outside the statute of limitations period if the scheme itself is less than five years old

In United States v. Parnell, the district court ordered a former federal employee to make restitution for the hundreds of fraudulent expense reimbursement forms she submitted between 2010 and 2016. The employee, who was indicted in August of 2017, argued that the five-year statute of limitations barred restitution for any expense form filed before August of 2012. But today the Second Circuit held that the Mandatory Victims Restitution Act of 1996 (18 U.S.C. § 3663A) authorizes sentencing courts to impose restitution for all “losses arising from criminal conduct in the course of a scheme, including acts outside the statute-of-limitations period, as long as those losses are attributable to the same underlying scheme, and as long as some part of th[e] scheme for which the defendant was convicted occurred within the statute of limitations.”[1]

The defendant in Parnell pleaded guilty to wire fraud (18 U.S.C. § 1343), which includes, as an element, “a scheme to defraud.” Therefore, because the former federal employee’s wire fraud scheme fell within the five-year statute of limitations, the Second Circuit held that total amount of restitution included all of the losses suffered by the government during the course of that scheme.

[1] The Second Circuit panel noted that the Sixth, Ninth, and Eleventh Circuits have already held that MVRA restitution orders may include losses incurred prior to the five-year statute of limitations cutoff, citing to United States v. Ellis, 938 F.3d 757 (6th Cir. 2019), United States v. Anieze-Smith, 923 F.3d 565 (9th Cir. 2019), and United States v. Dickerson, 370 F.3d 1330 (11th Cir. 2004). The Second Circuit panel also noted that the Tenth Circuit “has reached the same conclusion, albiet in a non-precedential order,” citing United States v. Williams, 356 Fed. App’x 167 (10th Cir. 2009).

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