Federal Criminal Restitution: MVRA Losses, Collection, and Appeals

Federal criminal restitution is a court-ordered debt requiring a convicted defendant to compensate victims for their losses, and in a broad category of federal cases the judge has no choice but to impose it in the full amount the government can prove. The Mandatory Victims Restitution Act of 1996, codified at 18 U.S.C. § 3663A, removed the court’s discretion to skip or shrink restitution for qualifying offenses.¹ The resulting obligation is enforceable for decades, accrues interest, attaches as a lien to nearly everything you own, and cannot be wiped out in bankruptcy.

When Restitution Is Mandatory

The MVRA kicks in when a federal offense falls into one of its covered categories and an identifiable victim suffered a physical injury or financial loss.¹ Those categories cover crimes of violence, property offenses under Title 18 (including fraud, embezzlement, and theft), consumer product tampering under 18 U.S.C. § 1365, and theft of medical products under 18 U.S.C. § 670.

A “victim” for MVRA purposes is any person directly and proximately harmed by the crime. In conspiracy or racketeering cases, that reaches everyone harmed by the defendant’s conduct during the scheme, not just the named targets.

There is one narrow way out, and it applies only to property and fraud offenses: the court can decline to order restitution if the number of identifiable victims is so large that restitution becomes impracticable, or if calculating losses would unreasonably prolong sentencing. That exception is unavailable for crimes of violence.

When It’s Discretionary Instead

For federal offenses outside the MVRA’s covered categories, restitution is still available under the older Victim and Witness Protection Act at 18 U.S.C. § 3663.² This is where drug trafficking and other crimes without a single identifiable financial-loss victim tend to land. Under § 3663, the judge can weigh your financial resources, earning ability, and dependents before setting the amount. Under the MVRA, none of that matters at the ordering stage. Discretionary restitution can also be negotiated into a plea agreement, including payments to people who aren’t technically victims of the offense of conviction.

What Losses the Order Can Include

The MVRA is limited to documented, out-of-pocket losses. It does not cover pain and suffering, emotional distress, or speculative future harm. Every dollar has to trace back to an actual expense or documented lost income. Categories vary with the offense:¹

Property damage or loss: return of the property or its value (the higher of value at the time of the crime or at sentencing), less any recovery.
Bodily injury: medical and related professional services, physical and occupational therapy, psychiatric and psychological care, and lost income.
Death: funeral and related services when a bodily injury offense results in the victim’s death.
Investigation and prosecution expenses: lost income, child care, transportation, and other costs the victim incurred participating in the case.

The exclusion of non-economic damages catches many victims off guard. Recovery for the long-term psychological toll of a violent federal crime requires a separate civil lawsuit; it will not come through restitution.

How the Amount Gets Calculated

The calculation runs through the Pre-Sentence Report prepared by a United States Probation Officer, which pulls together the financial evidence and victim information the court needs.³ Victims submit impact statements with supporting documentation. The government must prove the existence and extent of each loss by a preponderance of the evidence, and contested figures go to a hearing. Compensation the victim already received from insurance or another source is deducted to prevent double recovery.

A common misconception: that the judge will lower the restitution figure because the defendant is broke or headed to prison. Under the MVRA, the court orders the full amount of provable losses first, then sets a payment schedule based on what you can actually pay. The total does not shrink because you cannot pay it today.

If Co-Defendants Are Involved

When more than one defendant contributed to a victim’s losses, the court can either hold each defendant jointly and severally liable for the full amount or apportion liability based on each defendant’s role and financial circumstances.⁴ Joint and several liability is common in fraud conspiracies. A minor participant in a large scheme can end up on the hook for millions if the ringleaders turn out to be judgment-proof. Defendants who played small roles routinely underestimate this exposure until it shows up in the judgment.

Interest, Liens, and How the Government Collects

Interest starts accruing on any restitution order over $2,500 unless you pay in full within 15 days of judgment. The rate is the weekly average one-year constant maturity Treasury yield for the week before liability begins, compounded daily.⁵ For a defendant serving a long prison term on a six- or seven-figure order, interest alone can add tens of thousands of dollars before release. The court can waive interest, cap it, or limit the accrual period, but only if it finds you genuinely cannot afford to pay it, and that finding is not automatic.

Once judgment is entered, payments go to the Clerk of the applicable United States District Court, which disburses money to victims.⁶ The Financial Litigation Unit in each U.S. Attorney’s Office monitors payment and pursues collection when payments stop.

The enforcement window is long. Liability runs for the later of 20 years from the date of judgment or 20 years after release from imprisonment.⁷ Someone with a 10-year sentence can be pursued for up to 30 years after the original judgment. If you die with a balance owed, your estate remains liable and the lien continues until it receives a written release.

The order itself operates as a lien on all of your property and rights to property, treated the same as a federal tax lien under the Internal Revenue Code. It attaches at the moment of judgment and covers real estate, vehicles, bank accounts, and investment portfolios. Beyond the lien, the government can garnish wages and seize assets through writs of execution using the enforcement tools available for civil judgments. Delinquent debts can also be referred to the Treasury Offset Program, which intercepts federal payments such as tax refunds and applies them to the balance.⁸

Individual Victims Get Paid Before Insurers

When a victim has already received partial compensation from insurance or another source, the court still orders restitution for the full loss and directs part of the payment to the insurer or other compensation provider. But the statute requires all individual victims to be paid in full before any compensation provider receives a dollar.⁴ If you’re paying $200 a month on an order covering both individual victims and their insurers, every payment goes to the individuals first. For defendants with limited income, insurers may never collect.

Your Duty to Report Financial Changes

You have a continuing obligation to notify both the court and the Attorney General of any material change in your finances that could affect your ability to pay. That covers inheritances, legal settlements, and significant income increases. Substantial resources received during incarceration, from any source, must be applied to the balance.

The obligation runs both directions. If your situation has deteriorated, you can petition the court to lower the schedule by showing the material change. Victims and the government can also move to adjust. The court modifies payments “as the interests of justice require,” and improved circumstances can produce a demand for immediate payment in full just as a genuine downturn can reduce the monthly figure.

What Happens If You Don’t Pay

A defendant who knowingly fails to pay delinquent restitution can be resentenced. The court can impose any sentence originally available for the underlying offense, which in many federal cases means substantial prison time.⁹ Imprisonment for non-payment requires the court to find either that you willfully refused to pay or failed to make genuine efforts, or that alternatives to imprisonment aren’t adequate.

There is one absolute protection. You cannot be incarcerated solely because you cannot pay due to indigency. The court must distinguish a defendant who won’t pay from one who can’t. Documented job searches, minimal assets, and good-faith partial payments matter enormously at that hearing. Defendants who simply stopped communicating with the Financial Litigation Unit are in a much weaker position than those who kept records.

Bankruptcy Will Not Clear It

Filing bankruptcy does not eliminate federal restitution. Under 11 U.S.C. § 523(a)(13), any payment ordered as restitution under Title 18 is excluded from discharge in Chapter 7, Chapter 11, Chapter 12, and Chapter 13.¹⁰ The debt passes through bankruptcy untouched. Combined with the 20-year-plus enforcement window, daily interest, and an estate lien that survives death, this makes a large federal restitution order one of the most persistent debts in the legal system.

Challenging the Order

Both sides can appeal a restitution determination. Defendants most often challenge the amount, arguing the government failed to prove specific losses by a preponderance of the evidence. Courts also review whether the sentencing judge properly identified victims, correctly categorized losses under the statute, or abused discretion in declining to apportion liability among co-defendants.

Appellate courts give trial judges wide latitude on the math, requiring a reasonable assessment rather than exact precision. Failing to contest specific loss figures at sentencing makes it very hard to raise those objections for the first time on appeal. The strongest challenges tend to involve losses not directly caused by the defendant’s conduct or the wrong legal standard applied to a disputed category of damages.

1
Office of the Law Revision Counsel. 18 USC 3663A – Mandatory Restitution to Victims of Certain Crimes
2
Office of the Law Revision Counsel. 18 USC 3663 – Order of Restitution
3
Office of the Law Revision Counsel. 18 USC 3552 – Presentence Reports
4
Office of the Law Revision Counsel. 18 USC 3664 – Procedure for Issuance and Enforcement of Order of Restitution
5
Office of the Law Revision Counsel. 18 USC 3612 – Collection of Unpaid Fine or Restitution
6
U.S. Department of Justice. Restitution Process
7
Office of the Law Revision Counsel. 18 USC 3613 – Civil Remedies for Satisfaction of an Unpaid Fine
8
Bureau of the Fiscal Service. How the Treasury Offset Program (TOP) Works
9
Office of the Law Revision Counsel. 18 USC 3614 – Resentencing Upon Failure to Pay a Fine or Restitution
10
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge