This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.
SCOTUSblog: Robers v. United States
Background: Benjamin Robers pleaded guilty to conspiracy to commit wire fraud in violation of 18 U.S.C. § 371, based on his role as a straw buyer in a mortgage fraud scheme. Robers signed mortgage documents seeking loans which were based on false and inflated income and assets and based on his claim that he would reside in the houses as his primary residence and pay the mortgages. The loans went into default and the real estate which served as collateral for the loans were later foreclosed upon and resold. For his role in the scheme, the District Court sentenced Robers to three years' probation and ordered him to pay $218,952 in restitution to the victims — a mortgage lender of one property and the mortgage insurance company which had paid a claim on the other defaulted mortgage. Robers' restitution is governed by the Mandatory Victims Restitution Act of 1996, 18 U.S.C. § 3663A ("MVRA"), which required the court to determine an "offset value." Robers argued that the offset value should be based on the fair market value of the real estate collateral at the time the victims obtain title to the houses. The government argued that the court should determine the offset value based on the eventual amount recouped by the victim following sale of the collateral real estate. The Seventh Circuit agreed with the government, ruling that the value of the property returned on the date of its return is the amount of cash recovered at the time the foreclosed real estate was eventually resold.
Issue: The question before the Court is whether a defendant – who has fraudulently obtained a loan and thus owes restitution for the loan under 18 U.S.C. § 3663A(b)(1)(B) – returns “any part” of the loan money by giving the lenders the collateral that secures the money.
Holding: In a unanimous decision, the Supreme Court ruled that the phrase “any part of the property...returned” refers to the property the banks lost, namely, the money they lent to Robers, and not to the collateral the banks received, namely, the houses.