In U.S. v. Joseph, the defendant was convicted mail fraud and theft from the government for filing false income tax returns using false information. As a result of his committing this federal crime, the Internal Revenue Service actually disbursed $37,196. Before sentencing the government obtained an order from the district court entering a preliminary order of forfeiture under 18 U.S.C. § 3663A and 28 U.S.C. § 2461 for $29,514 in currency seized by government officials that were the proceeds of Joseph’s fraud. Joseph objected to the presentence investigation report because it recommended restitution in the amount of $37,196 to the IRS without reducing by the value of the funds forfeited to the government. At the sentencing, the government argued that the defendant was not entitled to an offset and the district court seemed to agree but announced that the restitution would be offset by the forfeiture amount. Following the sentencing, the government noticed the sentencing judge that the restitution and forfeiture laws do not permit the district judge to offset restitution by the amount forfeited. It argued the discretion whether to apply the forfeited funds to restitution belonged to the government. The sentencing court later entered a written order that required Joseph to pay $37,196 restitution to the IRS and directed the forfeiture of $29,514. There was no mention of an offset.
On appeal Joseph argued the district court had the authority to offset restitution by forfeiture, and argued that the sentencing court’s pronouncement at sentencing correctly intended to make the victim whole. The defendant relied on the rule that when an oral pronouncement of sentencing unambiguously conflicts with the judgment, the oral pronouncement controls. But the 11th circuit held that the rule does not apply here because the oral pronouncement was contrary to law. It found that under the language of the Mandatory Victim Restitution Act (MVRA) and the forfeiture act, the judge had no authority to offset the restitution amount by the forfeiture. The MVRA only permits a reduction for an amount later recovered for compensatory damages for the same loss by the victim in a civil proceeding.
In addition, the MVRA requires the court to order the forfeiture of property traceable to certain criminal offenses. The statute provides that the Attorney General has sole responsibility for disposing of petitions for remission or mitigation “or to transfer the property on such terms and conditions as he may determine, including as restoration to any victim of the offense giving rise to the forfeiture.” A defendant is not entitled to offset the amount of restitution owed to a victim by the value of the property forfeited to the government because restitution and forfeiture serve distinct purposes. Restitution is compensatory for the victim and forfeiture is punitive. The district court has no authority to offset a defendant’s restitution by the value of forfeited property except that the MVRA does allow for reduction of a restitution order for amounts “later recovered as compensatory damages for the same loss by the victim in” a federal or state civil proceeding. This only applies to compensatory damage awards recovered by a victim in a civil proceeding after the sentencing court enters a restitution order.