A decision was handed down on Monday by the U.S. Supreme Court on how to quantify restitution in mortgage fraud cases.
The petitioner in the case was Benjamin Robers, who was convicted of mortgage fraud. He allegedly submitted bogus loan applications to two banks.
Between the pair of financial institutions, Robers took out two home loans for around $470,000. The proceeds were used to finance the purchase of the properties.
The borrower eventually defaulted, and the banks completed the foreclosures in 2006.
The properties were sold during a declining real estate market in 2007 for a combined total of $280,000.
Robers was convicted of mortgage fraud in 2010, receiving probation as his sentence.
He was ordered by a federal court to pay restitution of $220,000, which was equal to the difference of what the banks lent him and the amount that they received from the sale of the REO assets.
But Robers argues that restitution was miscalculated under a provision of the Mandatory Victims Restitution Act of 1996 that requires property crime offenders to pay “an amount equal to … the value of the property” less “the value (as of the date the property is returned) of any part of the property that is returned.”
Robers claims that the restitution should have been reduced by the value of the homes on the dates the banks foreclosed since “part of the property” was returned on that date.
He appealed to the Seventh Circuit Court of Appeals, which affirmed the district court’s decision.
So he appealed to the U.S. Supreme Court.
But Robers found no sympathy among the justices on the nation’s highest court, which found that the property being returned was the dollars borrowed and not the real estate, itself.
“In our view, 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 two houses,” the decision stated. “For one thing, that is what the statute says.”
