[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
   LEGISLATIVE PROPOSALS BEFORE THE 110TH CONGRESS TO AMEND FEDERAL 
                            RESTITUTION LAWS 

=======================================================================

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON CRIME, TERRORISM,
                         AND HOMELAND SECURITY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 3, 2008

                               __________

                           Serial No. 110-138

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov

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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

        Subcommittee on Crime, Terrorism, and Homeland Security

             ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman

MAXINE WATERS, California            LOUIE GOHMERT, Texas
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
JERROLD NADLER, New York             F. JAMES SENSENBRENNER, Jr., 
HANK JOHNSON, Georgia                Wisconsin
ANTHONY D. WEINER, New York          HOWARD COBLE, North Carolina
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
ARTUR DAVIS, Alabama                 DANIEL E. LUNGREN, California
TAMMY BALDWIN, Wisconsin
BETTY SUTTON, Ohio

                      Bobby Vassar, Chief Counsel

                    Caroline Lynch, Minority Counsel


















                            C O N T E N T S

                              ----------                              

                             APRIL 3, 2008

                                                                   Page

                           OPENING STATEMENT

The Honorable Robert C. ``Bobby'' Scott, a Representative in 
  Congress from the State of Virginia, and Chairman, Subcommittee 
  on Crime, Terrorism, and Homeland Security.....................     1
The Honorable Louie Gohmert, a Representative in Congress from 
  the State of Texas, and Ranking Member, Subcommittee on Crime, 
  Terrorism, and Homeland Security...............................     3
The Honorable Steve Chabot, a Representative in Congress from the 
  State of Ohio, and Member, Subcommittee on Crime, Terrorism, 
  and Homeland Security..........................................     4

                               WITNESSES

The Honorable Byron Dorgan, a United States Senator from the 
  State of North Dakota
  Oral Testimony.................................................    11
  Prepared Statement.............................................    22
Mr. Jonathan Turley, J.B. and Maurice C. Shapiro Professor of 
  Public Interest Law, George Washington Law School, Washington, 
  DC
  Oral Testimony.................................................    27
  Prepared Statement.............................................    30
Andrew Weissmann, Esquire, Jenner & Block LLP, New York, NY
  Oral Testimony.................................................    46
  Prepared Statement.............................................    47
David B. Smith, Esquire, English & Smith, Alexandria, VA
  Oral Testimony.................................................    52
  Prepared Statement.............................................    54
Mr. Paul G. Cassell, Professor, S.J. Quinney College of Law, 
  University of Utah, Salt Lake City, UT
  Oral Testimony.................................................    69
  Prepared Statement.............................................    71

                                APPENDIX

Material Submitted for the Hearing Record........................   141


   LEGISLATIVE PROPOSALS BEFORE THE 110TH CONGRESS TO AMEND FEDERAL 
                            RESTITUTION LAWS

                              ----------                              


                        THURSDAY, APRIL 3, 2008

              House of Representatives,    
              Subcommittee on Crime, Terrorism,    
                              and Homeland Security
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:08 p.m., in 
room 2141, Rayburn House Office Building, the Honorable Robert 
C. ``Bobby'' Scott (Chairman of the Subcommittee) presiding.
    Present: Representatives Scott, Johnson, Davis, Gohmert, 
Chabot, and Lungren.
    Staff Present: Bobby Vassar, Subcommittee Chief Counsel; 
Karen Wilkinsen, AOC Detailee; Veronica Eligan, Majority 
Professional Staff Member; Mario Dispenza (Fellow), ATF 
Detailee; and Caroline Lynch, Minority Counsel.
    Mr. Scott. Good afternoon. I am pleased to welcome you to 
this hearing on the legislative proposals before the 110th 
Congress to amend Federal restitution laws.
    We are here at the Subcommittee on Crime, Terrorism, and 
Homeland Security to hear testimony about the proposed 
legislation that would make sweeping changes to the Federal 
restitution laws aimed at reversing the trend of the increasing 
backlog of unpaid restitution of crime victims, which the 
Government Accountability Office estimated to be $25 billion at 
the end of 2005.
    We will hear testimony about S. 973, sponsored by the 
Senator from North Dakota, Mr. Dorgan, and H.R. 4110, sponsored 
by the gentlelady from New Hampshire, Ms. Shea-Porter, in the 
House of Representatives, each titled, the ``Restitution for 
Victims of Crime Act.''
    We will also hear testimony about H.R. 845, the ``Criminal 
Restitution Improvement Act,'' sponsored by the gentleman from 
Ohio, Mr. Chabot, which was also introduced in the House.
    [The bills referred to are printed in the Appendix of this 
publication.]
    Mr. Scott. The bills would widen the number and type of 
Federal laws that would trigger mandatory restitution to a 
victim of crime and broaden the definition of a victim. They 
also would increase the type of victim costs that may be 
included in restitution orders, such as the victim's attorney 
fees. And they enhance enforcement of the restitution orders, 
such as mandating payment while a case is pending, and by 
delegating enforcement authority to prison officials through 
inmate financial responsibility.
    Each of these changes is intended to get more compensation 
to more victims. But, by far, the most far-reaching changes in 
the proposals that they share in common is that they would 
authorize the U.S. Attorney to freeze the assets of suspects 
even before they are charged with any crime. The objective is 
to prevent defendants from hiding their assets, to keep them 
available to pay restitution to victims if and when the court 
orders restitution.
    However, proponents of the measure have concerns about 
whether the objective behind freezing assets would actually be 
met and whether it would prevent a person from being able to 
hire counsel. Thus, this proposal is not only the most far-
reaching but also needs the most discussion.
    Under the proposals, the U.S. Attorney would be able to get 
an ex parte restraining order, freezing a suspect's assets, by 
showing a judge that the suspect, if indicted and if convicted, 
would be liable for victim restitution. The suspect would have 
no notice that the U.S. Attorney is applying for the order and, 
thus, would not be able to offer argument against it before it 
would take place.
    Opponents of the measure consider it a Government seizure 
with no conviction and no linking to frozen assets as fruits of 
a crime or even tools to commit a crime, such as the Government 
must show in a typical asset-forfeiture procedure. The person 
may be entitled to a hearing after their assets are seized; 
however, to meet this burden of proof to get a hearing, the 
person must show that the seizure has hindered his ability to 
hire a lawyer or that the seizure has deprived him of the basic 
necessities of life.
    Yet, even if a person gets a hearing, the court must deny 
his request to release his assets if the court finds that it is 
probable that he must pay restitution if convicted. Thus, his 
claim that the seizure has hindered his ability to hire counsel 
would, in essence, apparently have no effect on the court's 
decision.
    If opponents to the measure are correct, this is not only 
likely to be an unconstitutional encroachment on one's sixth 
amendment right to counsel but also an unconstitutional 
violation of due process, which is why this measure needs full 
vetting.
    Proponents to the proposals point out that restitution is 
already mandated in most instances of victim loss in Federal 
criminal cases. In 2001, the Government Accountability Office 
reported, quote, ``The Mandatory Victims Restitution Act of 
1996, requiring the court to order full restitution to each 
victim in the full amount of each victim's losses without 
regard of the offender's economic situation, has not resulted 
in significantly more restitution being collected but only a 
dramatic increase in the balance of reported uncollected 
criminal debt.''
    Also the GAO report indicated that, even in the few 
instances where the defendant does have some money or assets, 
it is difficult to collect restitution, noting that criminal 
defendants may be incarcerated with little earning capacity, 
and therefore their assets acquired through criminal activity 
may be seized by Government prior to the conviction. Thus, by 
the time fines and restitution are assessed, offenders may have 
no assets left for making payments on restitution.
    Now, if, as the GAO report indicates, the vast majority of 
offenders are broke when they come into prison, going out and 
trying to find a job with a felony record seems unlikely to 
improve their ability to have money to meet their own need to 
survive, the survival of their dependents, and have any money 
left over for restitution.
    So, although everyone is in favor of more restitution, 
mandatory restitution, in even more cases, may or may not be 
the solution to meet that end, because we might be violating 
the old English maxim that you can't squeeze blood out of a 
turnip.
    However, there are alternatives that may, in fact, meet the 
goal of getting more restitution to victims. And we would like 
to discuss them today, as we discuss the legislative proposals 
before us.
    It has been my observation that restitution works best when 
it is an alternative to the incarceration, which results in the 
loss of employment income and assets that accompany such 
incarceration.
    I believe that we should consider biting the bullet and 
establishing a victims' restitution fund from Federal 
appropriations and payments we can easily collect or reasonably 
collect from offenders. We should then refocus the Federal 
victim restitution collection efforts on areas where it may 
have more impact, such as going after assets of white-collar 
offenders who profit handsomely from their crimes and may have 
a means of paying. That way, victim restitution is neither 
dependent on the vagaries of an offender's ability to pay or 
Government's collection efforts.
    So, as we discuss legislative proposals, I would like to 
discuss alternatives so that we may come together and establish 
the best mechanism for meeting our common goal.
    It is now my pleasure to recognize the esteemed Ranking 
Member of the Subcommittee, the gentleman from Texas, Mr. 
Gohmert.
    Mr. Gohmert. Thank you, Chairman Scott. I appreciate your 
holding this hearing on a problem that Congress can and should 
correct, providing restitution to victims of crime.
    Every 30 minutes, there is a murder in this country; every 
5 minutes, a rape; every minute, a robbery; and every 36 
seconds, an aggravated assault. Nearly 16 million Americans 
were the victims of crime in 2006.
    These victims suffer a tremendous loss at the hands of 
their assailants. In addition to physical and emotional trauma, 
victims endure financial loss, including medical expenses, lost 
earnings and property damage. Annual losses for crime victims 
have been estimated at $105 billion.
    Restitution has been part of our criminal justice system 
for nearly a century. It plays an important role in 
rehabilitating offenders by holding them accountable to their 
victims. Restitution also attempts to make victims closer to 
being whole by compensating their financial loss caused by the 
offender's criminal conduct, though it is clear the victims of 
violence are never really put back to the place they were 
before an attack.
    Although Congress granted Federal courts explicit authority 
to order restitution in 1925, this authority was infrequently 
used for decades. Congress responded in 1982 with the Victim 
and Witness Protection Act, which vested Federal courts with 
the general discretion to order restitution in any criminal 
case.
    In the Violent Crime Control and Law Enforcement Act of 
1994, Congress established mandatory restitution for sexual 
abuse, sexual exploitation of children, and domestic violence 
cases. In the Mandatory Victim Restitution Act, Congress made 
restitution mandatory for most serious Federal crimes, 
including crimes of violence and property crime.
    Despite these Federal laws promising restitution to crime 
victims, the Government has failed to make payment on its 
promise. As much as 87 percent of criminal debt--restitution 
and fines, that is--is uncollected each year. The Justice 
Department estimates that the amount of uncollected Federal 
criminal debt increases with each passing year, jumping from 
$41 billion in fiscal year 2005 to nearly $46 billion in fiscal 
year 2006 and over $50 billion in fiscal year 2007.
    In California, there is over $6 billion in uncollected 
Federal criminal debt for fiscal year 2007. In my home State of 
Texas, there is over $3 billion of uncollected debt, and over 
$1 billion in Michigan and Ohio.
    That is why today's hearing is so important. I wish to 
thank Senator Dorgan and my colleague, Congressman Chabot, for 
their leadership on this issue. The legislation each has 
sponsored will come closer toward fulfilling Congress's promise 
of restitution for crime victims.
    I would also like to add that, as a State district judge 
handling felony cases, often one of the considerations of 
whether or not to give somebody probation included whether or 
not, by giving them probation, there was an opportunity for a 
victim to become closer to being made whole. And if that were a 
possibility, then as a condition of probation, I could lock 
somebody up for as much as 2 years through different programs. 
But if there was a chance we could require restitution, then 
that would be ordered and made reasonable to where it could be 
met. And if it wasn't met, that was a breach of the conditions 
of probation. Might as well lock them up in prison if they 
weren't going to try to pay their restitution.
    There is a different system here with the Federal 
authorities, but we have the authority here in Congress to fix 
things. It is one of the reasons I left the bench, because I 
didn't want to legislate from the bench. And I saw that through 
innovations, such as Senator Dorgan has proposed here, that we 
could literally try to fix things that we actually thought 
through and came up with a solution toward.
    So, Senator, thank you, again, for your time and being here 
today. I look forward to hearing your testimony.
    And yield back the balance of my time, Mr. Chairman.
    Mr. Scott. Thank you.
    Does the gentleman from Georgia have a comment?
    The gentleman from Ohio is the chief sponsor of one of the 
bills, and we would call on him to describe his legislation at 
this time.
    Mr. Chabot. Thank you very much, Mr. Chairman. And I would 
like to thank you for holding this important hearing today and 
our witnesses for taking the time to testify.
    And I want to thank you, Senator, for your leadership in 
this area of restitution.
    Last year, at this time, the full Judiciary Committee was 
considering the Second Chance Act, which, among other things, 
reauthorized $360 million for re-entry programs for offenders. 
As the Committee considered the bill, I pointed out that it was 
missing a critical section, one that would have made the bill 
fairer and more just, and that is making the payment of 
restitution to the victims of criminal offenses mandatory.
    In 2004, this Committee, the House, the Senate and the 
President recognized the need to bring greater fairness to our 
criminal justice system, particularly for crime victims. 
Through the Justice for All Act and the enactment of the Crime 
Victims' Bill of Rights, we gave victims a stronger voice in 
our criminal justice process. Included among these rights is 
the right to full and timely restitution as provided by law.
    Yet victims continue to bear the brunt of crime in this 
country. According to the Department of Justice, crime costs 
victims and their families more than $105 billion, as was 
mentioned, in lost earnings, public victim assistance, and 
medical expenses. Moreover, despite a victim's right to, quote, 
``full and timely restitution,'' unquote, it remains one of the 
most under-enforced victims' rights within our just system. In 
fact, 87 percent, as has been mentioned, of criminal debt, 
including restitution and fines, goes uncollected each year. 
And the amount of outstanding criminal debt is only expected to 
increase, ballooning from $269 million to almost $13 billion. 
In fact, in my own State of Ohio, as was mentioned, more than 
$1.25 billion in criminal debt remained uncollected at the end 
of fiscal year 2007.
    The Criminal Restitution Improvement Act of 2007, which I 
introduced last year, would fulfill the promise that we made to 
victims in 2004 and let them know that they have not been 
forgotten. H.R. 845 would make the payment of restitution 
mandatory in all Federal offenses for which monetary losses are 
identifiable.
    In making restitution mandatory, this bill takes into 
account a defendant's economic circumstances and those that 
depend on the defendant when restitution decisions are made. 
Moreover, the bill allows the Attorney General to collect 
unreported or newly discovered assets above the payment 
schedule, which currently cannot be applied.
    H.R. 845 is supported by the leading crime victims' 
organizations, including Parents of Murdered Children, the 
National Organization for Victims Assistance, and the National 
Center for Victims of Crime, just to name a few.
    I would ask unanimous consent, Mr. Chairman, to enter 
additional letters of support for H.R. 845 by various crimes 
victims' rights organizations into the record.
    Mr. Scott. Without objection, so ordered.
    Mr. Chabot. Thank you, Mr. Chairman.
    [The letters follow:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
    Mr. Chabot. Senator Dorgan has also introduced similar 
legislation, which he will describe in a few moments if we quit 
talking up here very soon. But I think it is safe to assume 
that we both believe that it is not too much to ask of our 
criminal system that it ensure that offenders repay their 
debts. Moreover, I believe the compliance with restitution 
orders is a strong measure of a prisoner's willingness to 
successfully re-enter our communities.
    If we are willing to spend more than $360 million a year on 
offenders, doesn't fairness and justice dictate that victims 
should be able to receive what they lost, at a minimum? Why 
should these innocent individuals continue to bear the brunt of 
someone else's actions--criminal actions, I might add?
    Again, I thank the Chairman for holding this hearing and 
our witnesses, particularly Senator Dorgan and Judge Cassell, 
for taking time out of their busy schedules to be with us here 
today. And I yield back the balance of my time.
    Mr. Scott. Thank you. Thank you very much.
    Our first witness is the Senator from North Dakota, the 
Honorable Byron Dorgan, sponsor of S. 973. He has a long and 
distinguished career as a Member of Congress, serving 6 years 
in the House and currently in his third term as Senator 
representing North Dakota. He earned a Bachelor of Science 
degree from University of North Carolina and Master's of 
Business Administration from the University of Denver.
    Senator, your written statement will be made part of the 
record in its entirety, and we ask you to make whatever 
statement you would like to make now, hopefully staying within 
5 minutes, but we will see. The lighting device is at the 
table.

   TESTIMONY OF THE HONORABLE BYRON DORGAN, A UNITED STATES 
             SENATOR FROM THE STATE OF NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you very much.
    It is actually North Dakota, not North Carolina, but it is 
north in any event.
    And I am really pleased to be back and pleased, Chairman 
Scott, that you have called these hearings.
    And I want to say first that Senator Grassley, the lead 
cosponsor on the bill that we introduced in the Senate, has 
asked to add a letter as part of this testimony. I ask consent 
that that be done.
    [The letter follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Dorgan. The National Center for Victims of Crime, I 
would like to ask consent that their statement in support of 
the bill also be a part of the hearing record.
    [The information referred to follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Dorgan. And then I would like to commend 
Congressman Chabot and Congresswoman Carol Shea-Porter, who 
have worked on this issue. So, especially thanks to them.
    You know, this is really interesting, because I was 
thinking about it a while ago, if you owe money these days, you 
would probably want to owe it to the U.S. Justice Department. 
If you're going to owe money to anybody, owe it in the form of 
something that is a court-ordered restitution to be collected 
by the Justice Department, because they are only collecting 4 
cents on the dollar.
    There is $50 billion owed. Now, why is that the case? 
Because, in most cases, it is the back room at the U.S. 
Attorney's Office that is asked to collect these things, and 
they are working up in the front room on prosecutions and so 
on, and precious little attention is paid to restitutions and 
fines.
    But it is also the case that they are hampered, because the 
fact is those that have been ordered to provide restitution for 
victims in many cases have been given ample opportunity to 
dissipate those assets.
    So I just think it is Byzantine that we have any real 
debate over whether something should be done. My hope is that 
whatever questions arise would be over what should be done, 
rather than whether. If, with $50 billion owed to victims, we 
don't do something, then we don't recognize a problem when it 
is right in front of us.
    So let me mention a couple of things about where we are.
    At my request, the GAO reviewed five major white-collar 
financial fraud cases with outstanding, unpaid restitution. 
They took a look at the details of five of them. Here is what 
they found. I have a couple of charts to show you what these 
folks have been doing.
    White-collar crime perpetrators who have been judged guilty 
and ordered restitution: expensive trips overseas, jewelry, 
fancy cars, million-dollar homes, spending thousands of dollars 
a month on entertainment. These are people who have been 
ordered by the court to pay restitution, who haven't done so, 
and yet have found ways to spend this money on overseas trips 
and fancy homes and so on.
    All of us ought to be outraged by that, because who are the 
victims? They are the victims who were victimized previously 
for which there was ordered restitution.
    Now, the fact is many years can pass between the date a 
crime occurs and the date that a court might order restitution, 
and that gives criminal defendants ample opportunity to spend 
or hide their ill-gotten gains.
    I have worked for some long while with the Justice 
Department to try to figure out how you can put together a 
system that works and one that provides protection for those 
who have been ordered restitution, because they need some 
protection to be able to appeal rulings and so on, but 
especially one that addresses the rights of victims. And I 
think we have done that.
    Let me just describe--I have a number of cases; I will just 
describe one. A $3.2 billion restitution judgment--that is a 
big one--entered against defendants. But these defendants were 
pretty smart, actually. They had some time and they had some 
opportunity, so they transferred to their wives liquid assets, 
which they had titled solely in their name previously, 
transferred cash and securities worth more than $24 million. 
Another one transferred to his wife $14 million, real and 
personal property of $6.7 million. Both created irrevocable 
trusts during the time they knew they were under criminal 
investigation. One transferred his trust real estate and liquid 
assets worth more than $20 million. The other funded his trust 
with real property currently valued at more than $5 million.
    That money, of course, should have gone to victims. That is 
what the court intended. But because the system doesn't work, 
they got by with dissipating assets. And we shouldn't--none of 
us should allow that to happen.
    Last fall, the U.S. Senate took up and passed the piece of 
legislation that Senator Grassley and I offered. We made a 
couple of changes, but I want you to know that the Senate has 
passed this legislation. I have visited with the Chairman of 
the full Committee and with you, Mr. Chairman, Chairman Scott, 
asking you to consider moving the legislation, as well.
    It is supported by the Department of Justice, with whom we 
have worked, the National Center for Victims of Crime, Mothers 
Against Drunk Driving, National Organization for Victims 
Assistance, National Alliance to End Sexual Violence, Parents 
of Murdered Children, Justice Solutions, and the list goes on. 
I would like to put the complete list in the record.\1\
---------------------------------------------------------------------------
    \1\ The complete list referred to is contained in Senator Dorgan's 
prepared statement which is printed in this published hearing.
---------------------------------------------------------------------------
    But it is pretty clear, A, we have a problem, and it is a 
big problem, $50 billion. One can make a case that perhaps some 
of these people will never pay a cent because they are 
destitute. I understand that. But that is not the reason that 
brings me to this hearing room.
    What brings me to this hearing room is a system which 
allows some folks with a lot of money to be ordered by the 
court to provide restitution and, instead, they are taking 
trips to Europe. They are dissipating their assets. They are 
giving their money to the kids to start a business. And the 
victims are told to, ``Go fly a kite'' and the court doesn't 
seem to be able to do much about it, because those assets are 
not protected to be saved for the victims.
    Now, Mr. Chairman, you said, and you are absolutely 
correct, you can't get blood from a turnip. That is true. But 
we ought to be able to squeeze a little money from those people 
who have been ordered to provide restitution and who are 
traveling to Europe for a vacation. We ought to be able to 
squeeze a little money out of those folks ordered to pay a 
restitution who are living in a million-dollar house. We ought 
to be able to squeeze a little money out of those folks who 
have been ordered to pay restitution to victims who have 
decided that they want to divert their assets to their spouse 
and their kids for the purposes of establishing trusts or 
starting a new business.
    And I believe that if we all work together and do the right 
thing, provide adequate protection with the capability of a 
judge and the capability of having an attorney for defendants, 
provide the right protection, I believe we will come to the 
right conclusion. And that is, victims ought to expect that 
this Government and the order of restitution from a court will 
mean something to victims, especially when it is ordered 
against those that have significant assets. That has been the 
case, and yet victims go wanting. This Congress should not 
allow that to happen.
    The question isn't whether we do something. We should. The 
question is, what do we do? Can this be improved upon? 
Probably. But I certainly hope that this Committee will do what 
the full Senate has done. The full Senate has passed my 
legislation, the Dorgan-Grassley bill. My hope is the House 
will do the same.
    Mr. Chairman, you are good to allow me the opportunity to 
come back over to the House and spend a bit of time with you, 
and I thank you very much for convening this hearing.
    [The prepared statement of Mr. Dorgan follows:]
 Prepared Statement of the Honorable Byron Dorgan, a U.S. Senator from 
                       the State of North Dakota
    Chairman Scott and Ranking Member Gohmert, I would like to thank 
you for holding a hearing today to examine proposals to improve the 
collection of unpaid federal court-ordered restitution, including 
bipartisan legislation I have authored with Senator Grassley in the 
Senate called the Restitution for Victims of Crime Act, S. 973. 
Representative Chabot and Representative Carol Shea-Porter have 
introduced related measures in the U.S. House.
    As all of us know, victims of crime and their families often face a 
significant challenge trying to rebuild their lives and recover a sense 
of emotional and financial security after a crime has been perpetrated 
against them. By law, victims of federal crimes are entitled to ``full 
and timely restitution'' for losses from a convicted offender.
    Unfortunately, new data from the Department of Justice shows that 
the amount of uncollected federal criminal debt is still spiraling 
upward--jumping from $6 billion in 1996 to more than $50 billion by the 
end of fiscal year 2007. That's a more than eight-fold increase in 
uncollected criminal debt owed to the victims of federal crimes.
    Government Accountability Office (GAO) investigators found that 
federal criminal justice officials collected an average of only four 
cents on every dollar of criminal debt that was owed to crime victims 
in 2000, 2001 and 2002.
    These figures are disheartening, and the victims of crime in this 
country deserve better. Crime victims should not have to worry if those 
in charge of collecting court-ordered restitution on their behalf are 
making every possible effort to do so before criminal offenders have 
the opportunity to fritter away their ill-gotten gains on lavish 
lifestyles and the like. This matter is not mere speculation.
    At my request, the GAO reviewed five white collar financial fraud 
cases with outstanding unpaid restitution. GAO found:

          Crime perpetrators who owed restitution taking 
        expensive trips overseas.

          Convicted criminals living in million dollar mansions 
        in upscale neighborhoods, but not making their court-ordered 
        restitution payments.

          Criminals who fraudulently obtained millions of 
        dollars in assets were using those assets to buy expensive 
        clothing instead of paying restitution they owed.

          Criminals spending thousands of dollars per month in 
        entertainment, even though court ordered restitution went 
        unpaid.

          Convicted criminals who had taken their ill-gotten 
        gains and established businesses for their children in order to 
        avoid the payment of court ordered restitution.

    S. 973 will give Justice Department officials the tools they have 
requested to help them do a better job collecting court-ordered federal 
restitution and fines. Our bill includes provisions that will remove 
many existing impediments to increased collections. For example, 
Justice Department officials have described a circumstance where they 
were prevented by a court from accessing $400,000 held in a criminal 
offender's 401(k) plan to pay a $4 million restitution debt to a victim 
because that court said the defendant was complying with a $250 minimum 
monthly payment plan, and that payment schedule precluded any other 
enforcement actions. S. 973 would remove impediments like this in the 
future.
    This legislation also addresses a major obstacle identified by the 
GAO for officials in charge of criminal debt collection; that is, many 
years can pass between the date a crime occurs and the date a court 
orders restitution. This gives criminal defendants ample opportunity to 
spend or hide their ill-gotten gains. That is why S. 973 provides for 
pre-conviction procedures for preserving assets for victims' 
restitution. This will help ensure that financial assets in control of 
a criminal defendant are available when a court imposes a final 
restitution order on behalf of a victim.
    As a safeguard, our bill allows a criminal defendant to challenge a 
court's pre-judgment asset preservation order. For example, a defendant 
may challenge a post-indictment restraining order if he or she can show 
that there is no probable cause to justify the restraint. In a similar 
manner, our proposal includes language that guarantees that an accused 
party will have access to adequate resources for attorney fees or 
reasonable living expenses from the time of indictment through the 
criminal trial.
    These pre-conviction procedures for preserving assets for victims' 
restitution will prevent criminal defendants from spending or hiding 
their ill-gotten gains and other financial assets. These tools are 
similar to those already used successfully in some states, by federal 
officials in certain asset forfeiture cases, and upheld by the courts.
    Key provisions of S. 973 would do the following:

          Clarify that court-ordered federal criminal 
        restitution is due immediately in full upon imposition, just 
        like in civil cases, and that any payment schedule ordered by a 
        court is only a minimum obligation of a convicted offender.

          Allow federal prosecutors to access financial 
        information about a defendant in the possession of the U.S. 
        Probation Office--without the need for a court order.

          Clarify that final restitution orders can be enforced 
        by criminal justice officials through the Bureau of Prisons' 
        Inmate Financial Responsibility Program.

          Ensure that if a court restricts the ability of 
        criminal justice officials to enforce a financial judgment, the 
        court must do so expressly for good cause on the record. Absent 
        exceptional circumstances, the court must require a deposit, 
        the posting of a bond or impose additional restraints upon the 
        defendant from transferring or dissipating assets.

          Help ensure better recovery of restitution by 
        requiring a court to enter a pre-conviction restraining order 
        or injunction, require a satisfactory performance bond, or take 
        other action necessary to preserve property that is traceable 
        to a charged offense or to preserve other nonexempt assets, if 
        the court determines that it is in the interest of justice to 
        do so.

          Permit the Attorney General to commence a civil 
        action under the Anti-Fraud Injunction Statute to enjoin a 
        person who is committing federal offense that may result in a 
        restitution order; and permit a court to restrain the 
        dissipation of assets in any case where it has power to enjoin 
        the commission of a crime, not just in banking or health care 
        fraud as permitted under current law.

          Allow the United States under the Federal Debt 
        Collections Procedure Act to use prejudgment remedies to 
        preserve assets in criminal cases that are similar to those 
        used in civil cases when it is needed to preserve a defendant's 
        assets for restitution. Such remedies, including attachment, 
        garnishment, and receivership, are not currently available in 
        criminal cases because there is no enforceable debt prior to an 
        offender's conviction and judgment.

          Clarify that a victim's attorney fees may be included 
        in restitution orders, including cases where such fees are a 
        foreseeable result from the commission of the crime, are 
        incurred to help recover lost property or expended by a victim 
        to defend against third party lawsuits resulting from the 
        defendant's crime.

          Allow courts to order immediate restitution to those 
        that have suffered economic losses or serious bodily injury or 
        death as the result of environmental felonies. Under current 
        law, courts can impose restitution in such cases as a condition 
        of probation or supervised release, but this means that many 
        victims of environmental crimes must wait for years to be 
        compensated for their losses, if at all.

    The Restitution for Victims of Crime Act has been endorsed by a 
number of organizations concerned about the well-being of crime 
victims, including: The National Center for Victims of Crime, Mothers 
Against Drunk Driving, the National Organization for Victims Assistance 
(NOVA), the National Alliance to End Sexual Violence, Parents of 
Murdered Children, Inc., Justice Solutions, the National Network to End 
Domestic Violence, the National Association of VOCA Assistance 
Administrators (NAVAA) and the National Crime Victim Law Institute. 
United States Attorney Drew Wrigley in Fargo, North Dakota has said 
this legislation ``represents important progress toward ensuring that 
victims of crime are one step closer to being made whole.''
    Last fall, the Senate passed by unanimous consent a Dorgan-Grassley 
amendment on the Senate floor. This amendment contained all of S. 973 
except the bill's environmental crimes title. I hope that members of 
the House Judiciary Crime Subcommittee and the members of the Full 
Committee will also agree that the current state of our federal 
criminal debt collection effort is not acceptable, and that this 
legislation is a serious effort to improve it.
    April 13 marks the beginning of National Crime Victims' Rights 
Week, an annual commemoration that has been observed since the early 
1980s to honor crime victims and call attention to their plight. One 
way to show our support would be to pass legislation to ensure that 
victims of crime and their families are given the compensation they are 
rightly owed.
    Mr. Chairman and Ranking Member Gohmert and other members of 
subcommittee, I look forward to working with you to address any 
questions about our legislation and to send a clear message to white 
collar and other criminals: if you commit a crime you will be held 
accountable and will not be allowed to benefit in any way from your 
criminal activity and ill-gotten gains.

    Mr. Scott. Thank you very much.
    Are there any questions of the Senator?
    If not, thank you very much, Senator.
    Mr. Gohmert. Would he like any questions?
    Senator Dorgan. Just positive questions, if you have. 
[Laughter.]
    But I did, Mr. Chabot, reference your work and the work of 
your colleague. I appreciate the work that has been done in the 
House, and I hope perhaps you will be able to move this 
legislation.
    And, again, Mr. Chairman, I know you have other witnesses, 
so let me thank you for allowing me to come over.
    Mr. Scott. Thank you very much.
    The gentleman from Georgia?
    Mr. Johnson. I move to strike the last word.
    Mr. Scott. Is this a question for the witness? The process 
would be he testifies, we ask questions.
    Mr. Johnson. Not really a question. I would just like to 
make an observation.
    Mr. Scott. The gentleman is recognized to ask questions or 
to make a comment or whatever.
    Mr. Johnson. Yes, with all due respect, Senator, I would 
say that the norm for defendants having been convicted and 
sentenced to pay restitution and, often, to serve mandatory 
lengthy prison sentences, that the number of those who have any 
assets are miniscule. It is mostly poor people, people without 
assets, who actually fall into the criminal justice system and 
wind up having committed crimes and convicted of crimes that 
require them to pay restitution.
    And so, it just seems that the legislation, though the 
purpose is worthy, is like a mallet being used to subdue a 
mosquito and may be a little harsh to the average--to the 
overwhelming number of defendants who it would apply to.
    And basically I am talking about the pre-charge ability of 
prosecutors to assess or to impose a freeze on whatever assets 
there might be, a car or a bank account with a couple ofhundred 
or a couple of thousand dollars, that kind of thing. So it 
gives prosecutors a lot of discretion prior to the individual 
even being charged. And then it ties the hands of the judges, 
further limiting their discretion to be able to assess a 
reasonable amount for restitution payments or even to allow a 
defendant to come out from under the pre-conviction freeze.
    And so I just wanted to make those observations.
    I think there are a number of reasons why the Justice 
Department would be behind on collecting restitution, as well, 
such as they are overworked and overburdened pursuing more 
important matters. Perhaps we can staff them up a little bit 
more adequately so that they can do a better job of collecting 
restitution.
    And maybe it is because the defendants who have been 
assessed the restitution don't have the money. Maybe that is 
the reason why there is so much money owed under restitution.
    So, with all due respect, those are my observations.
    Senator Dorgan. Mr. Chairman, if I might?
    Your point is well-taken. In many ways, you are winning a 
debate we are not having, because my point isn't coming here to 
suggest that someone who commits a crime, is sentenced to a 
lengthy period in a facility for incarceration and comes out 
with nothing, my point isn't that Justice or anybody else is 
going to be able to get that from them. The Chairman said you 
can't get blood from a turnip; I agree with that.
    But I would say this. Look at the newspaper in the morning 
and evaluate what scandals surround us these days, with 
unbelievable speculation, white-collar crime that is 
unbelievable. And then ask yourself this: When we send those 
folks to prison, as we should if they have violated the law, 
should we also allow them to send their money to an account 
someplace to be able to them when they come out of prison, or 
should some of that ill-gotten gain be retrieved by the Federal 
Government and go to the victims? That is the point.
    Your point is an adequate point. You can debate--I don't 
have time and you don't have time--to debate the provisions of 
this bill to make certain the concern that you have is not a 
concern.
    But I would say this. I don't think there is anybody on 
this Committee or in Congress who wishes to stand up and say, 
with respect to high-flying white-collar crime--and just take a 
look at the five that I asked GAO to look at--we believe it is 
important that victims should go wanting, even when the court 
has ordered restitution, while those folks are living in 
million-dollar homes or taking European vacations. I don't 
think anyone believes that is appropriate. All of us believe we 
ought to fix it.
    So I accept your point and hope that we can solve the 
problem that does exist.
    Mr. Chairman, thank you very much.
    Mr. Scott. Thank you.
    Gentleman's----
    Mr. Johnson. Mr. Chairman?
    Mr. Scott. Does the gentleman yield back?
    Mr. Johnson. Well, if I could, before I yield back, I would 
like to make the observation that transfers of property by 
those who would defraud someone who is entitled to it under a 
restitution order by a court is certainly avoidable. In other 
words, I think current law would allow for a court to void a 
transfer made to defraud a creditor, if you will, a victim.
    Senator Dorgan. That, too, is a fair point, but once it is 
transferred and the asset is gone, there is nothing for a 
victim or a court to retrieve.
    Mr. Johnson. Thank you. I will yield back.
    Mr. Scott. Thank you.
    Mr. Gohmert. Mr. Chairman, that stirred up a question I 
would like to ask the Senator, if you don't mind.
    Mr. Scott. He has to leave, so----
    Mr. Gohmert. I will be very quick.
    My friend Mr. Johnson mentioned we don't need a mallet to 
kill a mosquito. And I haven't read the whole bill, but there 
is nothing mandatory, in every case, that must be done to 
collect. Isn't there discretion in your bill, Senator?
    Senator Dorgan. There is. And the issue here is the 
restraint of assets. And Congressman Johnson raises, I think, a 
very important point, which is why we have tried to deal with 
that in a very important way in this bill.
    It is not the case that somebody can come in and restrain 
the assets pre-conviction without any appeal. But it is also 
the case that, if you don't have some tools in circumstances 
where you believe it is going to be completely dissipated and 
the victims will end up with nothing, you at least ought to 
give the court the opportunity to have those tools.
    Mr. Gohmert. So you are not advocating using a mallet to 
kill a mosquito. You are just saying, if a bear is coming, 
let's don't hand him insect repellant.
    Senator Dorgan. It is not a long distance from the Senate 
to the House, but I didn't walk all the way over here because I 
was concerned about mosquitoes. I am very concerned about 
people who are taking European vacations who owe victims. I am 
concerned that the victims get what they are due.
    Mr. Gohmert. Thank you.
    Mr. Chabot. Mr. Chairman? The Senator is free to go, if he 
would like. I just wanted to make one comment in response to--
--
    Mr. Scott. Well, let's let him leave before we get some 
other questions. [Laughter.]
    Thank you, Senator.
    Senator Dorgan. We have a vote at 2:45, so I have a great 
excuse. Thank you very much.
    Mr. Scott. Thanks so much.
    The gentleman from Ohio?
    Mr. Chabot. Just very briefly, in response to my friend 
from----
    Mr. Scott. The next witnesses will come up.
    Go ahead.
    Mr. Chabot. The bill--and ours are somewhat different. But 
our bill, H.R. 845, it does take into account the defendant's 
economic circumstances, so if they can't--if they have nothing, 
you are not going to, obviously, squeeze blood from a turnip, 
as the Chairman said. So it takes into account the defendant's 
economic circumstances, whether he or she has assets or not, in 
making the restitution mandatory.
    And it also takes into account the dependents of the 
defendant also, so what circumstances would that put the 
defendant's family in, as well. So those are all taken into 
consideration.
    But in a case where somebody has assets and could 
contribute to the victim, they ought to. And that is what our 
bill does.
    Mr. Scott. And those where the judge has discretion, is 
there discretion on the freezing of assets pre-trial?
    Mr. Chabot. Thank you for the question. It is the judge's 
determination on that. So it is an issue, and----
    Mr. Scott. Okay. Well, let's see what the panelists have to 
say.
    Our first witness on the second panel is going to be 
Jonathan Turley of George Washington University Law School. He 
teaches courses in constitutional law, constitutional criminal 
law, environmental law litigation, and torts. He is a frequent 
witness before the House and Senate on constitutional and 
statutory issues, as well as tort reform legislation. He earned 
his BA from the University of Chicago and JD from Northwestern 
University.
    Our next witness will be Andrew Weissmann of the law firm 
of Jenner & Block. He was the director of the Enron Task Force, 
the Chief of the Criminal Division of the United States 
Attorney's Office for the Eastern District of New York, and 
Special Counsel to the Director of the Federal Bureau of 
Investigation. He earned his bachelor's degree from Princeton 
and law degree from Columbia.
    Our next witness will be David Smith of the firm English & 
Smith. Prior to entering private practice, he was a prosecutor 
in the Criminal Division of the U.S. Department of Justice and 
at the U.S. Attorney's Office in Alexandria, Virginia. He 
earned a bachelor's degree from University of Pennsylvania and 
a law degree from Yale.
    Our final witness will be judge Paul Cassell, professor of 
law at the University of Utah College of Law. He has been an 
Assistant U.S. Attorney for the Eastern District of Virginia, 
professor of law for the University of Utah, and U.S. District 
Court Judge for the District of Utah, and has returned to full-
time at the College of Law, where he teaches criminal 
procedure, crime victims' rights, criminal law and related 
classes. He has a bachelor's and law degree from Stanford.
    Again, our witnesses' statements will all be entered in the 
record in their entirety. And I would ask each of our witnesses 
to summarize your testimony in 5 minutes or less. And the 
lighted device will turn from green to yellow when you have 1 
minute left in your time, and will turn to red when your 5 
minutes have expired.
    Professor Turley?

   TESTIMONY OF JONATHAN TURLEY, J.B. AND MAURICE C. SHAPIRO 
PROFESSOR OF PUBLIC INTEREST LAW, GEORGE WASHINGTON LAW SCHOOL, 
                         WASHINGTON, DC

    Mr. Turley. Thank you, Chairman Scott, Ranking Member 
Gohmert, Members of the Subcommittee. It is an honor to appear 
again before you to talk about a subject that we can all agree 
is very important.
    Restitution is very important to a criminal system, and it 
plays a role not just in deterrence, it even plays a role in 
rehabilitation. I think we can all agree on that. We can also 
agree that the current rate of recovery of restitution dollars 
is insufficient.
    However, on these three bills, you see a great number of 
interstitial changes in the restitution laws. And on the 
initial read, I think there is obviously much that has to be 
done. Many of these provisions are vague, and that vagueness 
will cause grave problems if these were to become law.
    But I am going to talk today about the most troubling 
aspects of the bill. And even though I count friends among the 
sponsors and the supporters of this bill, I must come and say 
that I believe it would be a mistake to enact this legislation.
    I have grave reservations about the necessity and the 
equity and the constitutionality of these provisions. 
Restitution has traditionally been a matter for courts to 
exercise discretion. And they have done it fairly well, and I 
think we would agree, however, that they have not done it 
enough. The question is, what is the solution?
    The solution is not, in my view, to require restitution in 
all Federal cases. As we have already heard, Federal defendants 
are largely indigent. It is about an 85 percent rate. From what 
I could see with this legislation, it would succeed only in 
pushing the remaining 15 percent into indigent status. It would 
not, in my view, increase significantly restitution to victims, 
which I is believe what we all want.
    It is true there is $46 billion that appears to be 
uncollected. But I believe it is also clear that much of the 
reason for that is that it can't be collected, that we are 
issuing restitutional orders against people who are indigent. 
And we are also doing a very bad job in collecting from those 
who are the not.
    One of my greatest concerns about this legislation is the 
reduction of discretion for courts. I testified a few years ago 
with a Federal judge who told me on the side during one of the 
breaks that he had spent his entire life trying to become a 
Federal judge by having a distinguished career as a lawyer. He 
became a partner, he became a well-known trial lawyer, and the 
minute he became a judge he was told not to use any of that 
experience or background in the sentencing of a defendant. And 
he said he felt like he was a race horse tied to a plow. He 
could not use a thing that he had distinguished himself 
learning throughout his career.
    Our Federal bench is remarkably talented. I have been a 
critic of many judges, but, pound for pound, it is a very good 
bench. And they should be given some discretion. I have never 
met a pro-criminal judge or an anti-victim judge. The reason 
that you don't impose restitution in some cases is a balancing 
of factors, to try to find the right mix so that you can punish 
this individual, maybe even rehabilitate this individual, while 
trying to give the victim back something of what was lost. I 
don't believe the solution is to take away all discretion when 
it comes to restitution.
    I also encourage you to think about the impact of these 
laws on this legal system. It may look like these are modest 
tweaks, but they are not. In my view, they will trigger some 
cascading failures within that system. There are displacement 
impacts that occur when you impose a new layer of procedural 
requirements upon the court. I believe this legislation would 
prolong litigation in the Federal courts. It would actually 
hurt victims. And I honestly believe that it would be a 
mistake.
    It would increase the burden upon courts and the public 
defenders' offices that are already limited. As a litigator, I 
can tell you, the dockets are getting longer. It is very common 
for me to tell my clients they will have to wait for years for 
a final decision in a civil case. They are getting longer in 
criminal cases. This would add to that already-overburdened 
court system, and it would achieve very little, in my view.
    I strongly oppose some of the provisions that are contained 
here, particularly the pre-trial, even pre-indictment freezing 
of assets. I believe that that would discourage lawyers and 
pressure plea agreements and requirea defendant to essentially 
defend himself over a charge that has not been made, over 
counts that are not confirmed for trial.
    I also strongly oppose the provision that says you can 
require restitution before the completion of an appeal. There 
is a system under Rule 68 that works very, very well for that.
    I list all of the objections I have here, but what I would 
strongly encourage my friends on the other side to consider is 
that sometimes roads paved with good intentions take us places 
we don't want to be. I believe this legislation will take us to 
one of those places. I think it will slow the courts, make them 
less efficient, make them less equitable, make them less fair. 
I don't think any of us want that.
    And I believe that there are alternatives, and I would love 
to work with my friends and with this Committee to achieve 
those worthy ends.
    Thank you.
    [The prepared statement of Mr. Turley follows:]
                 Prepared Statement of Jonathan Turley

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Scott. Thank you.
    Mr. Weissmann?

            TESTIMONY OF ANDREW WEISSMANN, ESQUIRE, 
                JENNER & BLOCK LLP, NEW YORK, NY

    Mr. Weissmann. Chairman Scott, Ranking Member Gohmert, 
Members of the Subcommittee and staff, the proposed Restitution 
for Victims of Crime Act of 2007 would, in my opinion, result 
in the unwarranted skewing of power in favor of the prosecution 
without the concomitant benefit to the public that would 
justify that result.
    I am going to focus on two aspects of the bill. First, the 
means by which the proposed bill would expand prosecutorial 
authority would set the bar too low for the prosecution to 
seize assets and the bar inordinately high for the defense to 
challenge that seizure.
    Second, the bill would virtually eviscerate in many 
corporate criminal investigations the protections supposedly 
afforded by the Department of Justice in its recent McNulty 
Memorandum governing corporate charging decisions. Such a 
result, I believe, would be both unwarranted and truly 
unintended.
    The bill authorizes the prosecution to make an ex parte 
application to restrain any assets belonging to an individual 
or a corporation even before indictment. Further, the bill 
directs that the prosecutor must demonstrate only probable 
cause to believe that the defendant, if convicted, will ordered 
to satisfy a restitution penalty in the case of a felony. Upon 
that showing, the legislation directs the court to take action 
in favor of the prosecution to secure the assets or substitute 
assets. Moreover, if it determines that it is in the interest 
of justice to do so, the court shall issue an order necessary 
to preserve any nonexempt assets of the defendant that may be 
used to satisfy such restitution order.
    This is a dramatic departure from current law with 
significant potential for abuse. One example: Pre-conviction, a 
prosecutor could exert enormous leverage over a current or even 
prospective corporate defendant by freezing all of its assets 
that may be used to satisfy a restitution order. Such a result 
is particularly draconian when one remembers that corporate 
criminal liability can be triggered based on the actions of a 
single low-level employee.
    Furthermore, because current law permits defendants to be 
held jointly and severally liable for the full amount of 
restitution, the bill would enable the prosecution to obtain ex 
parte an order freezing all assets of a company or individual 
based on the alleged conduct of other people.
    Such consequences are particularly unfair when one 
considers the myriad procedural safeguards missing from the 
bill. The bill sets an initial pre-conviction threshold 
standard to seize a person's or a company's assets that could 
always be met by the prosecution. The bill would enable a 
prosecutor to show that a person, if convicted of a felony, 
would be required to pay restitution. That showing could be 
made simply by pointing to the indictment or complaint and 
reading the statute. That would be all that the prosecution 
would have to do.
    There would be no benefit of the adversary system. There 
would be no requirement to establish a likelihood of success on 
the merits. There would be no requirement to show that a 
defendant is likely, probable or even suspected of dissipating 
assets to be restrained. And with that, the prosecution can 
freeze all assets that may be subject to restitution upon 
conviction.
    This standard, bizarrely, is far lower than that that 
currently exists in the civil arena. And when you consider 
that, you have to consider that, concomitantly, the defense is 
then given no opportunity under this bill to challenge that 
order. The bill suggests that there is that opportunity, but, 
in fact, if you look at it, it is virtually impossible to meet 
the threshold.
    A defendant can only obtain the possibility of a hearing if 
he or she shows, by a preponderance of the evidence, that there 
are no assets to obtain counsel or to pay for necessary 
expenses and--not or--and make a prima facie showing that there 
is a bona fide reason to believe that the court's ex parte 
finding of probable cause was in error.
    So let's assume that, after the ex parte order that the 
defendant is rendered completely penniless, that is 
insufficient. Because what the defendant would have to show is 
that the initial restraining that the prosecution received ex 
parte was invalid or there is some reason to believe that. That 
could never be met, given how easy it is for the prosecution to 
meet the initial threshold.
    Finally, even if the court then decides to hold a hearing, 
the current bill says that the defendant is not entitled to any 
discovery that he or she would not otherwise get. And because 
that stage of the proceeding under current law, there is no 
ability to obtain any evidence from the Government with respect 
to the names of witnesses, the much-sought-after hearing would 
basically be illusory.
    Thank you very much.
    [The prepared statement of Mr. Weissmann follows:]
                 Prepared Statement of Andrew Weissmann
    Good morning Chairman Scott, Ranking Member Gohmert, and members of 
the Committee and staff. I am a partner at the law firm of Jenner & 
Block in New York. I served for 15 years as an Assistant United States 
Attorney in the Eastern District of New York and had the privilege to 
represent the United States as Director of the Department of Justice's 
Enron Task Force and Special Counsel to the Director of the Federal 
Bureau of Investigation. I also am an adjunct Professor of Law at 
Fordham Law School where I teach Criminal Procedure. I am also here 
today testifying on behalf of the U.S. Chamber of Commerce.
    H.R. 4110, the proposed ``Restitution for Victims of Crime Act of 
2007'' would, if passed in its current incarnation, result in the 
severe and unwarranted skewing of power in favor of the prosecution, 
with no concomitant benefit to the public that would justify that 
result. The bill would afford prosecutors sweeping authority over 
defendants' assets--and consequently over defendants--without necessary 
due process guarantees or sufficient regard for the presumption of 
innocence, which we all cherish.
    I make several points in my remarks. First, the bill would greatly 
expand the scope of the assets that can be restrained pre-conviction. 
The bill would provide sweeping authority to restrain pre-conviction 
assets unconnected to any wrongdoing by the defendant. The bill runs 
contrary to the long tradition and jurisprudence of pre-conviction 
asset restraint and forfeiture, which are grounded exclusively in the 
recognition that the funds to be seized are ``tainted.''
    Second, the means by which the proposed bill would enable this 
expansion of prosecutorial authority applies fundamentally unfair 
standards, which set the bar far too low for the prosecution to seize 
assets, and the bar inordinately high for the defense to challenge that 
seizure.
    Third, the confluence of these two problems in the proposed bill 
would virtually eviscerate in many corporate criminal investigations 
the protections supposedly afforded by the Department of Justice in its 
recent McNulty Memorandum governing corporate charging decisions. Such 
a result would be both unwarranted and, surely, unintended.
    Finally, there is insufficient evidence that the current lack of 
pre-conviction restitution provisions applicable to untainted assets is 
the cause of the growing number of uncollected restitution judgments 
entered in criminal cases. Thus, the proposed bill is unnecessary to 
remedy this perceived problem.
               a. the abolition of the taint requirement
    The proposed bill would make several important changes to current 
forfeiture law. First, it authorizes the United States to make an ex 
parte application to a federal judge in order to restrain, without 
limitation, any asset of an individual or corporation even before the 
individual or corporation is indicted.\1\ Further, the bill directs 
that the prosecutor must demonstrate only ``probable cause to believe 
that [the] defendant, if convicted, will be ordered to satisfy an order 
of restitution for an offense punishable by imprisonment for more than 
1 year.'' Section 202(a)(a)(1) (emphasis supplied). Upon that showing, 
the legislation directs that ``the court . . . shall (i) enter a 
restraining order or injunction; (ii) require the execution of a 
satisfactory performance bond; or (iii) take any other action necessary 
to preserve the availability of any property traceable to the 
commission of the offense charged.'' Section 202(a)(a)(1)(A). Moreover, 
``if it determines that it is in the interests of justice to do so, 
[the Court] shall issue any order necessary to preserve any nonexempt 
asset . . . of the defendant that may be used to satisfy such 
restitution order.'' Section 202(a)(a)(1)(B) (emphasis added).
---------------------------------------------------------------------------
    \1\ See Section 202(a)(a)(1). Notably, the fact that such restraint 
of any asset--even those untainted by wrongdoing--may occur before 
indictment renders all persons subject to the prosecutor's reach and 
eliminates the initial safeguard of the grand jury. See Section 
202(a)(b)(1) (referring to ``the case of a preindictment protective 
order'').
---------------------------------------------------------------------------
    This scheme is a significant departure from current asset restraint 
practice and policy. These pre-conviction restraint provisions are 
divorced from the long-established requirement that the restrained 
property bear the taint of the defendant's wrongdoing. For decades, 
federal prosecutors have had the ability to freeze the tainted assets 
of persons pre-trial in order to ensure that these assets are properly 
forfeited to the government upon conviction. Key to this prosecutorial 
power has been the requirement that the assets that are subject to 
seizure are traceable to the crime itself. To freeze (and subsequently 
obtain) forfeitable property or funds, prosecutors have been required 
to show that such property is tainted.\2\ This requirement has cabined 
prosecutorial discretion by limiting the universe of restrainable funds 
to those traceable to the crime committed.
---------------------------------------------------------------------------
    \2\ Indeed, what is known as in rem civil forfeiture was an action 
at common law customarily used to proceed against the tainted property 
itself on the theory that it was guilty. As the Supreme Court wrote in 
United States v. Sowell, as soon as the criminal used the property 
unlawfully, ``forfeiture under those laws took effect, and (though 
needing judicial condemnation to perfect it) operated from that time as 
a statutory conveyance to the United States of all the right, title and 
interest then remaining.'' 133 U.S. 1, 19 (1890). Statutory enactments 
have added numerous criminal forfeiture provisions that permit the 
recovery of tainted property as punishment for the wrongdoing.
---------------------------------------------------------------------------
    The bill completely removes this ``taint'' nexus. Indeed, the 
government may freeze all of an individual's or corporation's assets if 
they ``may'' be used to pay a restitution order. The bill directs that 
``if it determines that it is in the interests of justice to do so, 
[the Court] shall issue any order necessary to preserve any nonexempt 
asset . . . of the defendant that may be used to satisfy such 
restitution order.'' Section 202(a)(a)(1)(B) (emphasis added). The bill 
thus expressly brings all non-tainted assets under the control of the 
prosecutor whenever those assets ``may'' be used at some point in the 
future to satisfy a restitution order.
    This is a dramatic departure from current forfeiture policy, with 
enormous potential for abuse. For instance, pre-conviction, a 
prosecutor could exert enormous leverage over a current or even 
prospective corporate defendant by obtaining an order freezing all of 
its assets that ``may'' be used to satisfy a restitution order. Such a 
result is particularly unfair and Draconian when one remembers that 
criminal corporate liability can under current law attach based on the 
errant acts of a single low-level employee--even if the employee's 
actions are in contravention of a strong corporate compliance 
program.\3\ Furthermore, because 18 U.S.C. Sec. 3664(h) permits courts 
to make defendants jointly and severally liable for the full amount of 
restitution, the proposed bill would enable the prosecution to obtain 
ex parte an order wiping out all assets of a defendant completely, 
based on the alleged conduct of other people.
---------------------------------------------------------------------------
    \3\ A corporation can be held criminally liable as a result of the 
criminal actions of a single, low-level employee if only two conditions 
are met: the employee acted within the scope of her employment, and the 
employee was motivated at least in part to benefit the corporation. No 
matter how large the company and no matter how many policies a company 
has instituted in an attempt to thwart the criminal conduct at issue, 
if a low-level employee nevertheless commits such a crime, the entire 
company can be prosecuted. New York Central & Hudson River Railroad v. 
United States, 212 U.S. 481 (1909) (upholding constitutionality of 
statute that permitted imputation of agents' conduct to create criminal 
liability for the carrier itself); Dollar S.S. Co. v. United States, 
101 F.2d 638 (9th Cir. 1939) (affirming steamship corporation's 
conviction for dumping refuse in navigable waters despite the company's 
extensive efforts to prevent its employees from engaging in that very 
conduct); United States v. Twentieth Century Fox Film Corp., 882 F.2d 
656 (2d. Cir. 1989) (affirming conviction despite the fact that bona 
fide compliance program was in effect at company); United States v. 
George F. Fish, Inc., 154 F. 2d. 798 (2d Cir. 1946) (affirming 
corporation's conviction based on criminal acts of a salesman); Riss & 
Co. v. United States, 262 F.2d 245 (8th Cir. 1958) (clerical worker); 
Texas-Oklahoma Express, Inc. v. United States, 429 F.2d 100 (10th Cir. 
1970) (truck driver); United States v. Dye Constr. Co., 510 F.2d 78 
(10th Cir. 1975). See generally Weissmann, Andrew, ``Rethinking 
Criminal Corporate Liability,'' Indiana Law Journal, Vol. 82, No. 2, 
Spring 2007, available at SSRN: http://ssrn.com/abstract=979055.
---------------------------------------------------------------------------
    Such consequences of the bill are particularly unfair when one 
considers the myriad procedural safeguards that are missing from the 
bill, a subject to which I now turn.
    B. Procedural Unfairness in the Bill
    The bill sets an initial threshold standard to seize a person's 
assets pre-conviction that could always be met by the prosecution. By 
its terms, the proposed bill would enable a prosecutor to show, ex 
parte and merely by ``probable cause,'' that a person, if convicted, 
would be ordered to satisfy an order of restitution for an offense 
punishable by imprisonment for more than one year. Section 
202(a)(a)(1). This minimal ``showing'' could always be satisfied by (a) 
reference to the indictment or criminal complaint--both of which 
conclusively establish probable cause--and (b) reading the statutory 
penalties for the offense. Moreover, the bill would forbid the district 
court from choosing in its discretion not to take action in favor of 
the prosecution, mandating that ``the court . . . shall (i) enter a 
restraining order or injunction; (ii) require the execution of a 
satisfactory performance bond; or (iii) take any other action necessary 
to preserve the availability of any property traceable to the 
commission of the offense charged.'' Section 202(a)(a)(1)(A) (emphasis 
added).
    Accordingly, without the benefits of the adversary system, without 
establishing a likelihood of success on the merits, and without any 
showing that a defendant is likely, probable, or even suspected to 
dissipate the assets to be restrained, the prosecution can freeze all 
assets that may be subject to restitution upon conviction. This 
standard is, bizarrely, far less than that required of civil litigants 
seeking to restrain assets pre-verdict.
    Making matters worse, this minimal prosecutorial ex parte threshold 
showing is combined with a dearth of any meaningful defense opportunity 
to challenge the ex parte seizure. The proposed defense standard is so 
restrictive, and has so many hurdles, that in effect once the 
prosecution has met its initial minimal showing, the restraint is final 
until the end of the criminal case.
    The bill provides that post-indictment a defendant may be granted a 
post-restraint hearing regarding the ex parte restraint order only if 
the defendant ``establishes by a preponderance of the evidence that 
there are no assets, other than the restrained property, available to 
the defendant to retain counsel in the criminal case or to provide for 
a reasonable living allowance for the necessary expenses of the 
defendant and the defendant's lawful dependents'' and ``makes a prima 
facie showing that there is bona fide reason to believe that the 
court's ex parte finding of probable cause . . . was in error.'' 
Section 202(a)(b)(2) (emphasis added). Even then, the bill does not 
require a hearing: the Court ``may hold a hearing to determine whether 
there is probable cause to believe that the defendant, if convicted, 
will be ordered to satisfy an order of restitution for an offense 
punishable by imprisonment for more than one year, and that the seized 
or restrained property may be needed to satisfy such restitution 
order.'' Section 202(a)(b)(3)(A) (emphasis added). During any such 
hearing, however, the defendant may not obtain disclosure of evidence 
or the identities of witnesses earlier than otherwise provided by 
existing law. Section 202(a)(b)(5) (``In any pretrial hearing on a 
protective order . . . [t]he court shall ensure that such hearings are 
not used to obtain disclosure of evidence or the identities of 
witnesses earlier than required by the Federal Rules of Criminal 
Procedure or other applicable law.'').
    This standard is virtually insurmountable. First, a defendant has 
to have ``no'' assets left to pay counsel or to provide for 
``necessary'' living expenses. A defendant with any assets to retain 
counsel or pay necessary expenses--even if clearly insufficient funds 
for either or both--could be found to fail this test. Second, and more 
importantly, even the defendant who is left completely indigent after 
the ex parte restraint will not prevail in challenging the restraint. 
In order to obtain a hearing, the proposed bill requires in addition 
that the defendant establish that there is a bona fide reason for 
finding the restraint order to be in error. Given that the initial 
threshold standard that the prosecution has to meet is virtually 
automatic--and will certainly be met upon almost any indictment for an 
offense allowing restitution--this standard simply cannot be found by a 
court to be satisfied. Thus, even if the ex parte restraining order 
renders a defendant penniless to care for her family and to obtain even 
the most modest retained defense counsel, that defendant still cannot 
obtain relief. Finally, even, if a defendant surmounts these obstacles, 
a hearing is not guaranteed under the bill, and even if a hearing is 
afforded in the discretion of the court, at that hearing the defense is 
prohibited from having access to evidence or witnesses that it would 
not otherwise have under existing law. Given that under existing law, a 
defendant has minimal rights to discovery--and could never obtain a 
list of government witnesses at this stage of a criminal proceeding--
the much-fought for hearing would be all but illusory.
        c. impact on the debate regarding the mcnulty memorandum
    The proposed bill could also serve, perhaps unintentionally, as an 
end run around the protections of the Department of Justice's (``DOJ'') 
McNulty Memorandum. That Memorandum, issued by DOJ in December 2006 to 
forestall legislation that would have had more far-reaching 
consequences, placed severe restrictions on when the government could 
consider whether a corporation is paying fees for its employees. The 
Memorandum basically prohibited DOJ from weighing in on that private 
decision in all but the rarest case. The Memorandum also placed limits 
on when DOJ is supposed to request a waiver of the attorney-client 
privilege.
    The proposed bill jeopardizes the effectiveness of these 
provisions. First, because the bill would enable DOJ in myriad 
corporate criminal investigations to obtain sweeping ex parte restraint 
orders against a company, it could render it virtually impossible for a 
company to pay legal fees for its employees. In other words, the 
Department would not have to weigh in on what the company intended to 
do regarding the payments of fees, as it was found for instance to have 
done in the so-called KPMG case.\4\ Instead, DOJ could engage in self-
help, and simply freeze all of a company's available assets ex parte 
that may be needed to pay restitution. In large corporate cases, such 
as KPMG, or Enron, Tyco or WorldCom, that enormous power would be 
palpable.
---------------------------------------------------------------------------
    \4\ United States v. Stein, 435 F. Supp. 2d 330 (S.D.N.Y. 2006). 
District Judge Lewis Kaplan found that prosecutors had invoked the 
Department's then-existing corporate charging guidelines, the Thompson 
Memorandum, at the very outset of its investigation to pressure KPMG to 
break its long-standing tradition of paying its employees' legal fees. 
KPMG's payment of legal fees was at the top of the prosecutors' agenda 
from their very first discussions with KPMG, and the court found that 
the prosecutors had indicated that the government would not look 
favorably on the voluntary advancement of legal fees. Judge Kaplan 
concluded that by causing KPMG to cut off legal fees to employees, the 
Thompson Memorandum violated the Fifth Amendment's due process clause 
and the Sixth Amendment right to counsel.
---------------------------------------------------------------------------
    Second, by causing a seismic shift in the already disproportionate 
power of the prosecution in corporate cases, any company subject to an 
ex parte asset restraint would waive any and all rights in order to 
survive such a freeze. The current congressional interest in 
legislative responses to the McNulty Memorandum would be rendered 
meaningless. Once prosecutors have the power to seek control of all or 
a significant portion of a corporation's assets pre-conviction and ex 
parte, the corporation will take any steps to have the government avoid 
that result or remove that restraint. Thus, the proposed bill, by 
giving unprecedented powers to the prosecutor before a defendant is 
convicted or even indicted, tips the scale dramatically and unfairly in 
the government's favor.
              d. disregard of current prosecutorial powers
    The proposed bill fails to recognize the existing tools prosecutors 
possess for restraining assets in order to preserve them for 
restitution.
    Current forfeiture law assists those wrongfully deprived of their 
property in obtaining it via the government's forfeiture tools. Many 
federal statutes contain explicit provisions allowing property owners 
to make claims on forfeited assets before they are obtained by the 
prosecution. In that sense, restitution aims are achieved through the 
traditional means of freezing and seizing tainted assets. Moreover, by 
statute, the Attorney General's ability to enforce restitution awards 
is linked to its forfeiture tools. Under 21 U.S.C. Sec. 853(i)(1), the 
Attorney General is authorized to ``grant petitions for mitigation or 
remission of forfeiture, restore forfeited property to victims of a 
violation of this title, or take any other action to protect the rights 
of innocent persons which is in the interest of justice and which is 
not inconsistent with the provisions of this section.'' The Attorney 
General may also direct the sale of property ordered forfeited and 
direct the disposition of those funds, as well as to ``take appropriate 
measures necessary to safeguard and maintain property ordered forfeited 
under this section pending its disposition.'' 21 U.S.C. Sec. 853(i)(5).
    Importantly, both the federal RICO statute, 18 U.S.C. Sec. 1963(m), 
and the federal criminal forfeiture statute, 21 U.S.C. 853(p), permit 
the government to obtain the forfeiture of substitute assets post-
conviction,\5\ when the defendant transferred the tainted property to a 
third party, placed the property beyond the court's jurisdiction, has 
been commingled with other property which cannot be divided without 
difficulty, or has been substantially diminished in value. Attempting 
to frustrate the government's effort to forfeit property has been held 
to be punishable as obstruction of justice. See United States v. Baker, 
227 F.3d 955 (7th Cir. 2000). This is a significant weapon in the 
government's arsenal, because it ensures that guilty defendants cannot 
put forfeitable property or funds beyond the government's grasp. In 
short, current law satisfies the government's need to obtain property 
without giving the prosecutor the power to freeze any and all assets 
held by a corporation or an individual.
---------------------------------------------------------------------------
    \5\ One Circuit permits the pre-trial restraint of substitute 
assets, see In re Billman, 915 F.2d 916 (4th Cir. 1990), but that view 
is not shared by other Circuits.
---------------------------------------------------------------------------
    Finally, there is scant evidence that the large amount of 
uncollected restitution payments--cited as a reason for the proposed 
bill--is a result of defendants' improperly dissipating assets pre-
conviction. An equally plausible reason for the growing size of 
uncollected restitution orders is that courts are currently required to 
enter such orders regardless of a defendant's ability to pay, and thus 
impose large restitution orders but set reasonable payment schedules. 
That scheme, which currently governs restitution orders, would of 
course result in what currently appears to be a large unpaid 
restitution bill, when in reality it may bear no resemblance to a 
defendant's avoiding restitution payments at all. In short, the 
proposed bill may be seeking to remedy a problem that does not exist, 
and does so by a means that fails to accord procedural safeguards to 
protect the public.
    Thank you for the opportunity to testify.
    Mr. Scott. Thank you.
    Mr. Smith?

    TESTIMONY OF DAVID B. SMITH, ESQUIRE, ENGLISH & SMITH, 
                         ALEXANDRIA, VA

    Mr. Smith. Good afternoon, Mr. Chairman and distinguished 
Members of the Committee.
    Much of what I was going to say in my opening statement has 
been already said by my distinguished colleagues at this table. 
And I really thank them for the excellent job that they have 
obviously done. I didn't get a chance to read their submissions 
before I came here, but I see that they are excellent.
    I am a leading authority on forfeiture, and I am the author 
of a two-volume Matthew Bender Treatise on the subject which 
also covers restitution law. And I have served, for a couple of 
decades now, as co-chair of the Forfeiture Abuse Task Force for 
the National Association of Criminal Defense Lawyers. And I 
helped the House Judiciary Committee and the Senate Judiciary 
Committee draft the Civil Asset Forfeiture Reform Act of 2000, 
which many of you on this Committee fought for, and it was a 
big victory for the reformers.
    I have been asked to address the pre-trial asset restraint 
provision of these bills, but I would like to make it clear 
that my concerns about these bills are not limited to that 
provision. I agree with the points made in the excellent letter 
filed by Thomas Hillier on behalf of the public defender 
community, which I did get a chance to read, and I wish I had 
time to address those issues as well. But I think the other 
folks here, as well as myself, have focused on what we think is 
the most serious problem of all in this bill, or these bills, 
and that is the pre-trial asset restraining provision.
    Basically, we don't need a pre-trial asset restraining 
provision specifically directed toward restitution. And that is 
because the courts already have the power to freeze forfeitable 
assets prior to trial, under the forfeiture statutes. And once 
forfeited, those assets are normally turned over to crime 
victims to compensate them for their losses.
    Whether this is called restitution or restoration of the 
proceeds of crime to the victims, which is another way that the 
Justice Department styles it, doesn't really matter. The money 
gets back to the victims already. That is the policy of the 
Department of Justice--that is, to compensate crime victims out 
of forfeited funds.
    So the only thing that these new restitution bills actually 
add to the picture is an unfair and totally ill-conceived 
provision allowing the court to freeze legitimate assets--that 
is, clean funds, not tainted by association with any crime--for 
the purpose of increasing the amount of money available for 
restitution, if that was ordered at the end of the day by the 
court.
    Now, there are better ways to do this than a provision 
which trenches so heavily on the sixth amendment right to 
counsel of choice and the basic assumptions of our adversary 
system of justice. And one of those better ways, or two of 
them, I've suggested in my statement, and that is to take money 
that is now earmarked for law enforcement purposes, and instead 
of putting it in a forfeiture fund, which is used to buy police 
cruisers and to pay the salaries of sheriffs' departments and 
so forth. Why not useg those funds exclusively to make 
restitution to victims?
    That proposal is actually consistent with the Justice 
Department's supposed policy of favoring restitution to victims 
over other uses for forfeiture funds. The problem is that that 
policy is not always followed in the field by Department 
prosecutors, who have other constituencies, let's put it that 
way. They want to keep the State and local folks happy, who 
assisted in the prosecution, by giving them a portion of the 
money to fund their own law enforcement budgets. And so you can 
understand why they are pulled in different directions.
    But Congress has the power to make a decision to direct 
these funds to the place where they are most needed, and that 
is for restitution to the victims. And I suggest that that is a 
far better way to go about increasing the funds available for 
restitution than the idea of freezing every defendant's assets 
prior to trial.
    I would also say that Senator Dorgan made the point that 
there are some rich defendants who will fraudulently transfer 
funds to their wives, to others, in order to avoid restitution 
and other penalties. Well, Congressman Johnson was quite 
correct to point out that current law allows the Government to 
set aside those fraudulent transfers under State and Federal 
fraudulent transfer statutes. And they do do that, and they 
should do that, where a significant amount of money is 
involved.
    And another way that the Government can prevent such 
fraudulent transfers before they even occur is to prohibit them 
as a condition of bail. And that is done in quite a few cases 
involving rich defendants. I am thinking of one in particular, 
which I am involved in right now, where exactly that was done,
    So, you know, the court has a lot of control over a 
defendant's handling of his assets through the court's power to 
set bail conditions. That same power has been used to force 
defendants to repatriate assets from abroad which have been 
transferred there. And so the court has already got 
considerable flexibility and power over a defendant's ability 
to transfer assets improperly to avoid restitution and other 
penalties. So I just don't think this provision is needed, and 
it is certainly not worth the candle, as I put it.
    It gives prosecutors a nuclear weapon with which to 
pauperize every single defendant, and abuse it they will. We 
know that from experience in the forfeiture area. When 
prosecutors are allowed to seize substitute assets, as they 
have been in the 4th Circuit unfortunately, they have done so 
repeatedly in an effort to force a defendant to be represented 
by the public defender, which is not adequate in a complicated 
white-collar case, and thereby force them to plead guilty 
rather than go to trial. And I can cite you chapter and verse 
on that later on.
    Thank you very much. I see my time is up.
    [The prepared statement of Mr. Smith follows:]
                  Prepared Statement of David B. Smith

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Scott. Thank you.
    Judge Cassell?

 TESTIMONY OF PAUL G. CASSELL, PROFESSOR, S.J. QUINNEY COLLEGE 
         OF LAW, UNIVERSITY OF UTAH, SALT LAKE CITY, UT

    Mr. Cassell. Chairman Scott and distinguished Members of 
the Subcommittee, I am pleased to be here today to testify in 
support of improving our Nation's restitution statutes.
    If there is one aspect of criminal justice policy which is 
uncontroversial, it is the idea that a criminal who causes a 
loss to a victim ought to have to pay that loss back to the 
victim. Congress repeatedly has adopted this principle, and, 
most recently, it has been mentioned in the Crime Victims' 
Rights Act, which was passed just a couple of years ago.
    Unfortunately, however, that goal of requiring criminals to 
pay back losses to victims is not being achieved. And I would 
like to recommend four specific reforms to our Federal 
restitution statutes.
    First, Federal judges should be given the authority to 
award restitution for all losses suffered by crime victims, not 
just narrow categories of losses. Right now, the main 
restitution statutes limit a judge's power to award restitution 
to lost property, medical expenses, lost income, funeral 
expenses, and costs of participating in the investigation. 
There is no general authorization for restitution, with the 
result that when judges make a discretionary decision, such as 
Professor Turley has talked about, to award restitution, all 
too frequently the appellate courts have been forced to 
overturn those decisions, because the statutes do not support 
the award.
    For example, in United States v. Reed, the 9th Circuit was 
forced to overturn a restitution award to victims whose cars 
were damaged when an armed felon fled police, because they were 
not damaged by the crime of a felon being in possession of a 
firearm.
    In the United States v. Blake, the 4th Circuit was forced 
to overturn a District Court order for restitution for victims 
who had had their credit cards stolen and charges run up on 
those cards because the crime of theft of the credit card is 
not the same as the crime of spending money on the credit card. 
The 4th Circuit said its decision represented, quote, ``poor 
sentencing policy,'' but the law did not permit such an award.
    The law should be changed. As the U.S. Judicial Conference 
has recently recommended, Federal judges should be given 
discretionary authority to award restitution when it is just 
and proper under the circumstances of the case.
    Second, Federal judges should be given the power to award 
restitution for all Federal crimes, not just those that 
happened to be listed in title 18 of the U.S. Code. An 
illustration of the problem comes from United States v. Elias. 
There, the defendants sent two young men with no protective 
equipment into a tank to clean out toxic waste. While working 
in the tank, one of the men was overcome by toxic fumes, and he 
sustained very serious permanent brain damage that will require 
expensive medical treatment for the rest of his life.
    Again, the district judge exercised discretion and 
concluded that a $6.3 million restitution award was 
appropriate, but the 9th Circuit was forced to overturn the 
award. Why? Because environmental offenses are listed in title 
42 of the U.S. Code, not title 18 for which restitution is 
authorized. This makes no sense, and Congress should give 
judges authority to award restitution for all Federal crimes.
    Third, judges should be given discretionary authority to 
restrain defendants from dissipating assets that could be used 
to satisfy a restitution award. And here I must, with all 
respect, disagree with Mr. Weissmann who has simply 
misdescribed the bills that are in front of this Committee. The 
bills do not authorize the seizure of assets. They simply 
authorize the judge, if the judge finds it appropriate, to 
restrain transference of the assets.
    So if the defendant wants to continue to live in his 
million dollar home, he is entitled to do that under these 
bills. But the bills would also authorize the judge to forbid 
the defendant from transferring that home to his wife or 
something like that that could preclude enforcement of 
restitution. The General Accounting Office has found that this 
is a serious problem and that assets acquired illegally are 
often rapidly depleted on intangible and excessive lifestyle 
expenses. There is no justification for letting a Federal 
criminal steal money from a victim and then use that money to 
live the high life before a final conviction could be obtained.
    Federal judges should be given the authority on application 
from prosecutors to restrain a defendant from dissipating 
assets that could be used to satisfy a restitution award. Of 
course such authority should include appropriate procedural 
protections for defendants and innocent third parties. And the 
proposed bills in front of this Committee do that. They would 
allow a restraining order only on a finding of probable cause 
and then only for assets that would be necessary for 
restitution and defendants can obtain expenses for living 
expenses or to pay legal counsel.
    The provisions of the Act are modeled on a forfeiture 
provision that has been upheld by the United States Supreme 
Court. Crime victims deserve the same kinds of protections when 
prosecutors are trying to get assets for them as the Federal 
Government can use when it is trying to forfeit assets to the 
U.S. Government.
    Finally, Congress should also repeal the abatement ab 
initio doctrine, which prevents a restitution award from being 
entered when a convicted defendant dies before his appeals are 
final. Again, this problem might be well highlighted by the 
case that I believe Mr. Weissmann worked on. In the case of 
United States versus Kenneth Lay, there was a 16-week jury 
trial after which Mr. Lay was convicted of massive securities 
frauds involving Enron. However, he died before the sentencing 
hearing. And as a result, the district judge was prevented from 
entering a $43 million restitution award that would have gone 
to the victims of that crime.
    The statute should be changed. Right now the statutes do 
not allow a judge to award restitution unless the defendant has 
finally exhausted all of his appeals. We should change the law 
to allow the judge to impose the restitution order and then let 
the defendants pursue any appeals that might be appropriate.
    So in sum, I think the issues that are in front of this 
Subcommittee are very simple. When a criminal causes a loss to 
a victim, the criminal should be ordered to pay the victim for 
that loss. I urge the Committee to move forward on the 
legislation in front of it, which would help to implement this 
principle in our Nation's Federal criminal justice system.
    [The prepared statement of Mr. Cassell follows:]
                 Prepared Statement of Paul G. Cassell

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Scott. Thank you very much, professor. I recognize 
myself for 5 minutes of questions. And in follow up, Judge 
Cassell, as I understand your testimony, you want the judge on 
a case-by-case basis to make these decisions not at automatic 
pretrial in every case?
    Mr. Cassell. I think it depends on what we are talking 
about. But in general, the bills that are in front of the 
Committee would authorize discretionary decisions by judges to 
create more restitution opportunities.
    Mr. Scott. Mr. Weissmann, your reading of the case, if the 
U.S. attorney has probable cause of a case, can they get 
order--does a judge have to enter an order freezing assets?
    Mr. Weissmann. Under the language of the bill, yes, the 
judge has very limited discretion. They have to----
    Mr. Scott. What discretion?
    Mr. Weissmann. First if the showing is made that there is 
an indictment and that that statute----
    Mr. Scott. Wait a minute. No indictment. Pre-indictment.
    Mr. Weissmann. Okay. If there is pre-indictment, the judge 
has to make the finding of probable cause. But if there is 
probable cause for a crime for which restitution is a penalty, 
then there is no discretion.
    Mr. Scott. He has to enter the order at the request of the 
U.S. attorney upon probable cause to freeze enough assets to 
satisfy any potential restitution?
    Mr. Weissmann. Yes. And it can cover any assets that may be 
necessary.
    Mr. Scott. And this is not just fruits of the crime asset, 
any assets?
    Mr. Weissmann. That is right. Unlike the current rule with 
respect to forfeiture, where it only covers tainted asset this 
is for any assets.
    Mr. Scott. One of the problems with the criminal justice 
system is that the same system applies to those that are guilty 
and those that are innocent, it would be nice to have one set, 
kind of streamline set for those we know are guilty and another 
more burdensome process conviction for those who are innocent. 
Unfortunately, everybody has to go down the same highway. Now, 
if you are factually innocent of the charge and they come in 
with probable cause, do your assets get freezed?
    Mr. Weissmann. Yes.
    Mr. Scott. When do you have an opportunity to present your 
evidence of innocence?
    Mr. Weissmann. Under this bill, it is hard for me to divine 
a circumstance where a defendant would have the opportunity in 
your hypothetical to have a hearing because if there is--a 
probable cause determination by the court, whether it is pre- 
or post indictment and it is for a crime for which restitution 
is available, then it is impossible for that defendant to make 
a showing that there is a bona fide reason to believe that 
there was error at the time of the ex parte order, which is a 
requirement in order for the hearing to be available. The court 
has no discretion.
    Mr. Scott. Professor Turley, do you see the same result? If 
you are factually innocent, when do you get an opportunity to 
reopen your bank account?
    Mr. Turley. Well, on the ex parte, you get 10 days on the 
ex parte and then you can request a hearing. But the problem 
with the standards is we are talking probable cause that this 
is a crime if proven that you would have to pay forfeiture. But 
the bills, at least one of them, would make all crimes subject 
to forfeiture. So the standard is somewhat misleading because 
it is almost impossible to miss that target.
    So when you finally get up in front of a hearing, you have 
got very little basis under these laws to say you shouldn't 
seize my assets. One possibility would be instead of making all 
of these laws subject to forfeiture, it is one of the other two 
that simply extends it to six more laws, and you could argue 
that this isn't a law that is subject to assets being frozen. 
But it is a hearing that begins with an ex parte filing which 
obviously you have no role----
    Mr. Scott. And if you have outstanding checks and they 
start bouncing, when can you get access to your checking 
account again?
    Mr. Turley. It is even worse----
    Mr. Scott. There is notice, right?
    Mr. Turley. Yeah, it is even worse. I mean, as a criminal 
defense attorney, I can tell you the most important part of a 
case, in my view, is pre-indictment. It is when you know your 
person is a target, you have got a lot of work to do. They need 
counsel. That is probably when they are most vulnerable. But at 
that very moment, their assets can be frozen. They will have a 
hard time getting an attorney. But they are supposed to get an 
attorney in order to contest the fact that they have no money 
to hire an attorney.
    Now, the reason they will have no money is since you are 
expanding the definition of victims and because we still have 
the original indictment, maybe a superseding indictment with 
maybe a larger number of accounts if a judge is looking at 
that, she is going to say, well, here is 20 counts which may or 
may not be the ones at trial.
    On those 20 counts, there is an expanded number of victims 
now, each of which can seek your assets. You know, a blind 
squirrel would find that nut as a prosecutor. It would be hard 
not to get 100 percent of assets on that standard.
    Mr. Scott. Thank you. The gentleman from Texas.
    Mr. Gohmert. Thank you, Mr. Chairman. I do appreciate 
y'all's testimony. And by the way, Professor Turley, I guess 
this is the first time I have seen you since the Supreme 
Court's recent decision about which you testified earlier. I 
would say congratulations on being right, but I knew you were 
right before. I would say congratulations, the Supreme Court 
got it right.
    Mr. Turley. God bless you.
    Mr. Gohmert. And there is so much confusion as to what that 
really meant and nobody is trying to protect anybody that is a 
criminal. They are just trying to preserve the Constitution. 
And I appreciate the points that people here have made about 
their concerns in this bill. And I have not read the bill in 
full. I guarantee you I will before you know we were to take it 
up in mark up. But I can see like on preservation of assets for 
restitution, this just says on the government's ex parte 
application and a finding of probable cause that the defendant, 
if convicted, will be ordered to pay an approximate amount of 
restitution for an offense, then you could enter these orders 
and immediately I am going wait a minute, that might be real 
easy to say, well, yeah, if he is convicted then he is going to 
certainly have to pay restitution.
    So there is your finding and it doesn't have a requirement 
that probable cause be found that he committed the offense. So 
I can see a number of things that need to be worked on here. 
But I am curious about some other things that have been brought 
up. For example, yeah, there is a potential set-aside of 
fraudulent transfers, and I am just trying to think out loud 
based on some of the things that have been said. But what about 
a provision that basically provided for a set-aside with a 
presumption that if a transfer is made--and again, I am just 
thinking out loud here--presumption that if a transfer is made 
after the time someone has been named a target and up until so 
many months, 6 months or something after conviction, that there 
is a presumption that was a fraudulent transfer so the burden 
is not there. Or if it is a purchase. Because it is not always 
a transfer as you all know.
    I mean, sometimes you buy an asset that you can hide 
somewhere, or perhaps stick it in some purchase. But if you had 
a presumption that was a fraudulent purchase, then maybe you 
would have a set aside of not just transfers but purchases, 
boy, it would put people on notice that if somebody is named a 
target, you better feel real comfortable before you make the 
sale or make the buy that this may not be set aside later on.
    Anyway, I am wondering if something like that might be of 
assistance. But Judge Cassell, you made some excellent 
recommendations and some good points, and I will need to do 
more looking to make sure that we adequately address the things 
that you brought up.
    But Professor Turley, you mentioned it reduces the 
discretion for the judge and we shouldn't take away all 
discretion, it would extend litigation and we have got dockets 
getting longer. Of course I fought with my colleagues over the 
patent law venue because we had some venues where they were 
getting to trial in 18 months, like in the Eastern District of 
Texas. But that is horrible because we need it in jurisdictions 
where we can have 4 or 5 years to drag them out. Go figure. But 
anyway, one of the things that has amazed me is I remember back 
in the early '80's when the sentencing guidelines came in and 
the Federal judges, you know, were furious that you took away--
the Congress took away all of that discretion and when within a 
matter of 20 years, now they say, you know what, it makes it 
easier because as a judge, some of my toughest decisions were 
what to do on sentencing because I had tremendously broad 
discretion.
    But anyway, it seems like some have not minded having 
discretion taken away. I don't want to see discretion taken 
away from the courts. I would not want to see anything 
mandatory, but I sure would like them to have the tools in the 
appropriate cases. So anyway, can I get comments on the 
possibility of a presumption of fraudulent transfer or 
purchase, Professor Turley?
    Mr. Turley. First of all, it is, once again, an honor to 
appear before you. You are unique in that you have played a 
role in both the judicial and legislative branch, which makes 
your service on this Committee so valuable. And I actually was 
thinking along the same lines in terms of what this body could 
do to give courts not less discretion but simply more ability 
to use that discretion. And actually a thing I was thinking of 
was that we could look at--or actually you could look at the 
possibility of----
    Mr. Gohmert. We is okay. We welcome your input.
    Mr. Turley. Look at the possibility of having a more 
systemic approach to an early identification of assets of 
targets, where the prosecutors can come in and require the 
court to make a determination of asset worth, asset locations 
and to put that into a court order. Because what you are 
speaking of in terms of presumption is it actually achieves the 
same thing. That if a court comes in and says, look, we have 
identified this as a possibility for fraudulent transfer, and 
we have a serious question about restitution for victims 
because of the size of these allegations, you could have them 
come in and say I want an identification, a sworn 
identification of all assets.
    Their identification, their amounts, joint bank accounts 
and to put that into an order and to say that if there is 
transfers from here, we are going to look at whether there is a 
fraudulent effort. And you can also ask for the court to be 
informed of any large transfers off that base. So the court 
will have a chance to monitor it and so will the prosecutors 
without freezing the assets but can--and then if there is a 
violation--if you go and you submit that information to the 
court and there is any hidden assets or any transfers without 
informing the court, you would be in contempt, which would be 
even better than a presumption. You know, those are 
possibilities that I think that the Committee could look at.
    Mr. Gohmert. Could I get one more comment from Judge 
Cassell on that issue? What do you think about that?
    Mr. Cassell. I think certainly a step forward is better 
than no step at all. But the problem is that this presumption 
of transfer isn't going to apply in many of the situations 
where the problems are most serious. We heard from Senator 
Dorgan about the problems of somebody taking a trip to Europe 
or something like that. Of course, some presumption against 
transfers isn't going to get money back on plane tickets or 
hotel rooms or jewelry or whatever it is that has been spent 
out there that has come and gone. So that is why more 
comprehensive authority needs to be given to judges to address 
this problem.
    Mr. Gohmert. Thank you. Thank you, Mr. Chairman.
    Mr. Scott. Thank you. The gentleman from Georgia.
    Mr. Johnson. Thank you, Mr. Chairman. With the chart--they 
say that a picture is worth a thousand words and the chart was 
a wonderful picture of, I believe, a big mansion and the white 
sand dunes of a far away beach in an exotic local and maybe an 
exotic automobile or something like that, the rich and famous. 
And that is the real target of this--of these pieces of 
legislation, isn't it? I will ask you Professor Cassell; isn't 
that correct?
    Mr. Cassell. I think that is certainly the most serious 
problem. I don't think prosecutors are going to try to get a 
restraining order to prevent somebody from spending $500 on 
something. As a practical matter, you are exactly right.
    Mr. Johnson. But yet under all three proposals, isn't it a 
fact that the prosecutor would indeed have that power over a 
blue collar or a no-collar criminal defendant with little or 
nor assets?
    Mr. Cassell. Certainly it's the case, whenever there is a 
crime committed, that prosecutors would have the power to use 
the tools in this bill to protect assets. And let's remember, 
it is not just--I think sometimes the mistake is to think about 
low income criminals--and there are certainly low income 
criminals--but who are they victimizing? Low income victims 
because typically crimes are committed among the same social 
class, many crimes are interracial for example.
    So I think it is a mistake to focus just on the criminal 
half of the equation and forget about the victim half of the 
equation.
    Mr. Johnson. When we are talking about restitution, though, 
we are talking about that coming from the defendant and we are 
talking about expanding the number of people who would be 
entitled to restitution under these pieces of legislation. And 
given that fact, Professor Cassell, I would like to do 
something that I have always wanted to do ever since law 
school, and that is to pose a hypothetical to a law professor.
    Professor, I would like for you to assume that a man is 
convicted of conspiracy to distribute marijuana, and I want you 
to further assume that a girlfriend of a man who purchased 
marijuana from the defendant claims to be a victim and to have 
suffered loss because her boyfriend became abusive to her as a 
result of smoking the marijuana. I want to ask you now, under 
existing law, this victim, the female, would not be entitled to 
restitution, correct?
    Mr. Cassell. Correct.
    Mr. Johnson. And assuming that she could prove her claim 
under this new law, should it pass or any of these three 
proposals should they pass, she would be entitled to 
restitution; isn't that correct?
    Mr. Cassell. I don't think the laws change the definition 
of victim that broadly. You are talking about----
    Mr. Johnson. Okay. Let me ask whether or not anyone would 
disagree with that on the panel.
    Mr. Turley. I am afraid I would disagree. I mean, the 
hypothetical is less than a hypothetical because it is the 
facts from the Sharp case, I believe. And in the Sharp case, 
Professor Nowicki, who now teaches at Tulane, was the person 
asking for precisely that type of victim status. And indeed, 
the court said that it did not meet the standard of being 
directly and proximately harmed under the definition of 
victims. The definition of victims under these laws are 
exceptionally broad. I must disagree with the suggestion that 
it is a close matter.
    In my view, they are almost without limitation when you 
talk about identifiable person or entity that suffer pecuniary 
loss is one--I reference. I can't see the significant 
limitations of that definition, and I certainly can't see why 
the Sharp case would not have fallen within it.
    Mr. Johnson. Thank you, Professor. Mr. Weissmann.
    Mr. Weissmann. I agree with that. Once you take out the 
words direct and proximate, you are going to have significant 
issues facing the courts as to who a victim is in any 
particular case.
    Mr. Johnson. And Mr. Smith?
    Mr. Smith. I would agree with these gentlemen, but I think 
it could be argued either way. I will concede that. But it 
shouldn't be argued either way. I mean, to me there is no way 
that that lady should be able to get status as a victim. And 
remember there is a----
    Mr. Johnson. Under current law or under the new law?
    Mr. Smith. Under the new law, it could be argued either 
way. And that just goes too far. Remember, there is also 
provisions in all of these bills that the defendant has to pay 
the victim's attorneys as well for their representation. And to 
me that is another terribly ill-conceived provision which is 
just going to get the courts bogged down in endless battles 
over attorney fees, whether you are entitled to them and 
whether the fees are reasonable.
    And again, you know, as you said, Congressman, we are 
talking about, you know, the Federal system here where 85 
percent of the defendants are already deemed indigent and 
represented by public defenders. And the most important point 
about this entire bill is that you are going to take the 
remaining 15 percent and put them into the public defender 
system as well because, you know, this bill will make every 
defendant subject to being pauperized at the whim of any 
prosecutor. And if that is not done, that is because the 
prosecutor was a nice guy and he exercised restraint. And there 
are still good prosecutors around.
    But the problem is you don't want to give this nuclear 
weapon to every single line prosecutor with no supervision by 
higher-ups and that is the case in today's Justice Department. 
There is no supervision by higher-ups. You can't complain to 
anybody up the chain and expect to get the AUSA's decision 
reversed on anything.
    So it is insane to give this much discretion to every 
prosecutor. And that is what you are being asked to do. And it 
is just--to me this is not even--you know, this is not 
something that reasonable people can differ about. It is just 
shockingly bad legislation, which has the potential--the very 
likely potential to undermine the entire criminal justice 
system that we have come to know and respect over centuries.
    Mr. Johnson. Thank you.
    Mr. Cassell. Could I exercise a point of personal 
privilege? Because I guess I have just been called an 
unreasonable person here. This legislation doesn't give any 
power to prosecutors to do anything other than make 
applications to judges who in the proper circumstances can then 
issue appropriate orders. If prosecutors are making outlandish 
requests, judges won't grant them.
    Mr. Smith. But those requests are not going to be 
outlandish under this legislation, because they are going to be 
authorized. And, in fact, as was said by my colleagues at this 
side of the table, the judge will be forced to grant these 
restraint orders because he is not given discretion once the 
prosecutor makes the probable cause showing, which is very easy 
to do.
    Mr. Johnson. So whether or not to do this or not vests the 
discretion into the hands of the prosecutor as opposed to the 
judge?
    Mr. Smith. Exactly. And that is just what was wrong our 
sentencing system before Booker, which probably Judge Cassell 
would be the first one to agree with me about invest the 
discretion in the hands of the prosecutors and not the judge. 
And the prosecutor was really calling the shots about 
sentencing, not judges. And by the way, even if you do vest 
discretion in the hands of the judge, I am sorry, but I don't 
have great faith in the average Federal judge to get it right 
because, you know, based on my experience for 30 years, I have 
just seen too many judges act as rubber stamps, particularly in 
ex parte proceedings where--you know, where even the best of 
judges unfortunately has to rely on everything that the 
prosecutor or the case agent tells them because it is an ex 
parte proceeding.
    The problem with these proceedings is the defense doesn't 
even get to know what the basis for the ex parte order is. This 
is all done in secret and it is sealed. You don't have any 
right to see what the basis was for that ex parte restraint 
order that was entered, so how do you challenge it? It makes it 
very difficult to challenge if you don't even know what the 
factual basis for the order was.
    Mr. Johnson. Thank you.
    Mr. Scott. The gentleman's time has expired. The gentleman 
from Ohio.
    Mr. Chabot. I thank the gentleman for yielding. You just 
indicated that you had little or no faith in the Federal judges 
to set the bond and get this right--excuse me--not set the 
bond--but set this right relative to this issue. But what is 
your position on whether the judges should have the discretion 
in criminal sentencing?
    Mr. Smith. I am all in favor of that because look, it is 
not an ex parte proceeding.
    Mr. Chabot. So judges can get it right on the one but not 
the other?
    Mr. Smith. Yes. I think judges for the most part--as was 
said before, you know, we have a very good Federal bench. If 
they are given all the facts, they can get it right. But when 
they are only given a one-sided presentation of the facts and 
then the other side is then barred from even seeing what the 
presentation was----
    Mr. Chabot. Let me get on to my next question. I have only 
a limited amount of time. Let me ask each of the witnesses, and 
I will start with you, Professor, if I can. Relative to victims 
rights, especially as it relates to restitution, do you think 
that the Federal--at this time, the Federal laws relative to 
restitution are sufficient or do you think that they should be 
strengthened with respect to what victims can acquire? And If 
you could be relatively brief because I am going just go down 
the line.
    Mr. Turley. I would say it could be improved. We had an 
exchange. I think there might be some room for improvement, but 
not with the mandatory aspects. I think where the improvement 
needs to be is to ramp up the collection of restitution funds 
and I think that is where you will see the most result for 
victims.
    Mr. Chabot. Mr. Weissmann?
    Mr. Weissmann. I agree with that. I think there are ways to 
improve what is going on. It can include having more people at 
DOJ. It can include having provisions in the bail statute to 
make it clear that this can be one of the factors for bail 
assuming that it goes to risk of flight or dangerousness. You 
can expand the definition of victims as one of the proposals. I 
just think that the current bill is ill-advised because I don't 
think it has the procedural protections for defendants that I 
think are necessary for due process.
    Mr. Chabot. Mr. Smith?
    Mr. Smith. The question is can we find ways to improve 
collection of----
    Mr. Chabot. Do you think that restitution at the Federal 
level is sufficient at this time or do you think there is room 
for improvements?
    Mr. Smith. Oh, I definitely think there is room for 
improvement and I have suggested a couple of ways in which it 
could be improved. And I think the Committee's staff suggested 
another way which hasn't been talked about here. And that is on 
the idea of making--setting up a restitution fund. I think the 
Chairman talked about this in his opening statement, set up a 
restitution fund where all the restitution money and maybe 
funds from fines or forfeitures can also go and then it is sort 
of like an insurance pool. The victims in one particular case 
wouldn't be dependent on making a recovery from that defendant.
    Instead they could share in the restitution monies that had 
been collected in this entire restitution fund so that it 
wouldn't be haphazard. Victims in one case may get 100 percent 
restitution and in another case because the government wasn't 
able to recover anything maybe because the defendant was 
indigent, the victims get nothing. So it is a way of evening 
out the benefits to the victims and I think that is an 
excellent proposal.
    Mr. Chabot. Thank you. Judge Cassell.
    Mr. Cassell. There are ways we could improve the 
restitution laws. And unfortunately at hearings like this, we 
focus on the 10 percent that is controversial, not the 90 
percent that is uncontroversial. The Justice Department 
testimony, for example, lists a whole range of things that I 
think just about everyone in this room could agree with, like 
putting together a check list for judges on what should be 
ordered, giving Federal prosecutors access to information that 
the probation office has about the finances of a defendant, 
extending terms of supervised release to collect restitution 
and the list goes on and on.
    Nobody has offered any objection to any of those things. So 
I hope the Subcommittee will take those noncontroversial parts 
of the bill and move forward on that regardless of what it 
chooses to do on the other pieces of it.
    Mr. Chabot. Let me follow up if I can, Professor Cassell. 
This was described as going to undermine the criminal justice 
system and being shocking and that type of thing. Could you--
getting back to what actually happens here, we are talking 
about having a probable cause hearing in which there is a judge 
that ultimately makes the decision. Whether or not we have 
great faith in those Federal judges, there is going to be a 
hearing before a judge before any of this occurs. Is that not 
correct? And also, what about this issue about whether or not 
the defendant is likely to not have any funds available to him 
or her in order to acquire counsel? As a practical matter, you 
know, what is likely to happen under those circumstances?
    Mr. Cassell. Right. Well, I guess maybe I am a bit biased 
on this. I got a chance to work with Federal judges for 5 years 
while I was serving as a Federal district court judge in Utah 
and I think I have great confidence that the men and women that 
serve on the Federal bench around this country will take the 
provisions of this bill, if it becomes law, and apply it in a 
fair and appropriate way. They are going to look at situations 
like the one you describe. And if there is an asset freezing 
provision that is in place, they are then going to look and see 
whether the defendant can make a showing that funds really are 
needed to retain counsel.
    And if so, the bill authorizes release of those funds if 
the other conditions are met in order to secure counsel. So 
this isn't going to be a situation where someone isn't able to 
hire a lawyer because of the fact that there has been an asset 
freezing provision entered.
    Mr. Chabot. As Senator Dorgan described before, if the 
defendant is talking about taking expensive trips to Europe or 
putting money in trust accounts or starting new businesses to 
the detriment of the victims, those are the types of things 
that the judge is not likely to allow; is that correct?
    Mr. Cassell. I think that is exactly right. I guess one of 
the things I am a little bit disappointed about when I hear 
some of the opposition testimony is they will find one word in 
the bill and they will say this word is unclear. And it may be 
there are some words that are unclear. But many of these things 
can be simplified very quickly with some drafting. And with as 
many smart people as there are on this panel, it is 
disappointing to me that they haven't offered critiques of the 
language and suggestions in the language in order to fix it. I 
mean, Mr. Smith, Professor Turley, Mr. Weissmann, I think we 
could take all of their concerns that they have raised today 
and put a few tweaks into the bill and those problems would be 
completely eliminated.
    Mr. Chabot. Thank you very much. Yield back.
    Mr. Scott. The gentleman from Alabama.
    Mr. Davis. Thank you, Mr. Chairman. Gentlemen, part of what 
strikes me as unusual about this legislation is that a lot of 
it involves restraints on the liberty of a defendant or a 
potential defendant. And I emphasize the word potential. 
Obviously, once someone is indicted, there are a variety of 
contexts on which we will allow restraints on their liberty. We 
will allow them, for example, to be detained upon a showing of 
flight risk or danger to the community, at least with certain 
classes of cases.
    We give the courts a fair amount of discretion and 
authority to restrain assets for defendants, people who have 
been indicted. What is unusual about this legislation is it its 
very sharp focus on people who are suspects, people who have 
not faced any determination of their guilt or innocence in 
court.
    Professor Turley, it has been 6 years since I walked in a 
courtroom and argued a case. So refresh me a little bit. My 
understanding of the law today is that for individuals pre-
indictment, criminal forfeiture proceedings are still 
available; is that correct?
    Mr. Turley. That is correct.
    Mr. Davis. What is the standard of proof in a criminal 
forfeiture proceeding pre-indictment?
    Mr. Turley. First of all, the current law gives the Federal 
judge the discretion to take steps to protect assets. And when 
it comes to forfeiture, it is a probable cause standard. But 
the judge actually has the ability to take steps today. We 
might create new ways that might help her do that. But the 
difference here is that it would be become a mandatory process 
effectively.
    Mr. Davis. Is there also one other distinction that the way 
the forfeiture law works today, you have to make an allegation 
that the proceeds are tainted in some way; is that correct?
    Mr. Turley. That is correct. And that is the big difference 
between restitution and forfeiture. When the Supreme Court said 
in its famous statement that you don't have the right to use 
other people's money, what they were saying was that a showing 
has been made that what you claim is yours is tainted by your 
crime. That is not what we are talking about with restitution. 
We are talking about stuff that is yours that you have to make 
people whole with. So it is a very different process. Because 
with forfeiture, you are talking about grabbing a boat that was 
used in a drug crime.
    Mr. Davis. Let me stop you for 1 second because our time is 
so limited. Judge Cassell, what I think Professor Turley has 
just said may be the most important distinction and one that 
needs to be underscored. It strikes me as being a very 
Draconian power to give the prosecutors--to allow them to say 
to someone who has not been indicted, someone who has not been 
bound over to a grand jury, someone who has not met any weighty 
standard of proof, that on a light showing of probable cause, 
we are going to take assets that may be lawful--that is not 
even part of the standard that they be unlawful--but we are 
going to infringe on your use of lawful assets because under 
the light standard of probable cause, you may owe damages to 
someone. That strikes me as pretty Draconian. And let me put 
the real world consequence around this. I agree with you that--
because I was a prosecutor. The majority of prosecutors make 
reasonable, decent, prudent choices. A substantial number 
don't. And it would seem to me that to give this new power to 
the government to use against a class of people who have not 
been indicted at all frankly becomes a very huge bargaining 
chip for a prosecutor.
    It, also as a practical matter, given that these are public 
hearings--I haven't heard anything in these bills that suggest 
that these hearings would be private hearings, they wouldn't be 
hearings available to the public. It would seem to me that if I 
were a prosecutor looking to pressure my defendant, going after 
that defendant's assets pre-indictment might become a very good 
tool. Professor Turley, am I on to something with this idea 
that this becomes a major pressure lever for the government.
    Mr. Turley. I agree entirely. I have got to tell you, there 
will be many prosecutors who will drop the hammer on this as a 
point of pressure.
    Mr. Davis. And doesn't this also become a way for a 
prosecutor to almost have a little pretrial, a way that in 
effect will say to the press, look, we are really closing in on 
this target, don't have enough yet for an indictment, don't 
have enough for a criminal complaint, but I would like to do a 
little bit of discovery? So what I am going to do is, in 
effect, go after this person's assets on a probable cause 
theory and that is the least weighty standard the judge ever 
has to apply. And I know that when the person gets his hearing 
to challenge that, my guys will get to cross-examine him.
    So I have almost got a little mini trial. Does that 
concern, Judge Cassell, the possibility of prosecutors using 
this to generate mini trials to conduct discovery?
    Mr. Cassell. No, I don't think it is going to create mini 
trials. And I guess one of the things that----
    Mr. Davis. Why wouldn't it?
    Mr. Cassell. Well, one of the things to remember about this 
bill is it doesn't take anyone's assets away. It simply 
preserves those assets.
    Mr. Davis. But you have got to have a hearing.
    Mr. Cassell. That is true.
    Mr. Davis. The defendant is entitled to contest that. There 
will be a public hearing, will there not?
    Mr. Cassell. Yes.
    Mr. Davis. There will be an opportunity to cross-examine or 
to question the defendant's witnesses because the defendant has 
got to make a showing. The defendant can't sit silent, can he?
    Mr. Cassell. No.
    Mr. Davis. So the defendant has got to make a showing. That 
means cross-examination, doesn't it, Professor Turley?
    Mr. Turley. It does. And it is true it doesn't take your 
assets away. But by freezing them, it is like saying we are not 
taking your house, you just can't go inside.
    Mr. Davis. But, Judge, my point is by doing something to 
the defendant and making the defendant have to meet a burden to 
keep control of his assets, you have a hearing. The defendant 
has got to put some showing as a burden of production and 
persuasion. That subjects that defendant to cross-examination 
and to questioning. If I am a diligent, aggressive prosecutor, 
I would love to have been able to do that because it would give 
me a shot at free discovery. Do the other three of you 
gentlemen see my point about free discovery?
    Mr. Cassell. You could bring the same defendant in right 
now, though, into the grand jury room and ask questions----
    Mr. Davis. He could invoke his fifth amendment right.
    Mr. Cassell. Or he could invoke his fifth amendment right 
if this hearing----
    Mr. Davis. But that means he would be sacrificing his 
assets. He would be giving up his property or control of his 
property.
    Mr. Cassell. And then I guess the one other point I would 
emphasize, Congressman, is you think the probable cause showing 
is some light showing. I think it is difficult to show that 
someone is probably a serious Federal criminal and probably has 
taken assets that should rightly go to a victim.
    Mr. Davis. We can argue about that. But if the Chair would 
indulge me to make one last quick point. I have another big 
broad concern, Judge. We struggle right now to collect 
restitution under the law that we have today. We have $46 
billion unpaid Federal restitution. And by the way, most of it 
is not owed by small fish; it is owed by big major corporate 
defendants who have resources and get around it. So let me tell 
you what I have some instinct may be motivating these bills. It 
is almost as if we have a reverse--we have some kind of 
redistribution here of the burden because we are not getting 
all of these resources from our big well-heeled defendants. It 
is almost as if we are broadening the category of restitution.
    So If I am a prosecutor in a typical midsized U.S. 
Attorney's office that has to get our numbers on restitution up 
to show DOJ we are doing a good job and to get a good 
evaluation and I am struggling to collect from my big fish 
defendants, what do I do? I go out and bring more expansive 
restitution claims against other defendants. Is there anything 
to that theory, Mr. Smith?
    Mr. Smith. Absolutely. As a matter of fact, Congressman, I 
think everything you have said is right on point. And it 
takes----
    Mr. Davis. I am going to quit while I am ahead.
    Mr. Smith. And thank God you are a former AUSA because you 
know exactly what goes on. And everything you have said strikes 
me as totally realistic. That will happen. And I don't think 
you have heard any good answers to your questions.
    Mr. Davis. Mr. Chairman, I shall quit while I am ahead.
    Mr. Scott. Thank you. The gentleman from Texas.
    Mr. Gohmert. Mr. Chairman, I would just like to ask 
unanimous consent to make this written submission by the U.S. 
Department of Justice before our Committee on this bill part of 
the record.
    Mr. Scott. Without objection. The gentleman from 
California.
    Mr. Lungren. Thank you very much, Mr. Chairman. This has 
been a most interesting hearing. Mr. Smith, you have 
enlightened me that--this is the first time I have heard on 
this panel that the U.S. Justice Department or downtown Justice 
Department doesn't have any control over its U.S. attorneys. I 
mean, I heard just the opposite. That is the complaint we got, 
that they have got too much control of the U.S. attorneys but 
you have enlightened me that in fact they used a laissezfaire 
approach. You have also told me that you don't trust Federal 
judges to get it right, except when you do trust Federal judges 
to get it right.
    Mr. Smith. When they know the facts.
    Mr. Lungren. And you have also told me that this bill by 
itself is going to undermine our whole system of justice. So 
this must be a pretty big bill. Let met ask any of you out 
there. In 1996, when I was attorney general of California, we 
worked with the California legislature to pass a preconviction 
asset-freezing law dealing with white-collar crime. It was 
limited, as I recall it, to white-collar crimes and it had to 
be involving two felonies and it had to be over a certain 
amount and so forth. I was just wondering--and that was on an 
ex parte order based on a showing of probable cause. And it 
resulted in the freezing of defendant's assets. And I have been 
gone for quite a while there so I have not followed it. But 
since you are giving us an opinion with respect to this bill 
that, in some ways, seems to be similar what happened in 
California, have any of you seen whether the concerns you have 
expressed here have actually seen fulfillment in the 
enforcement of the California act?
    Mr. Cassell. If I could just comment on that, Congressman. 
The bill that you put into was put into effect more than 10 
years ago has been on the books in California. There have been 
some defense challenges and those defense challenges have been 
rejected. California courts have found that that law is 
constitutional and it has been used effectively, as I 
understand it, by prosecutors all over the State there to 
restrain assets. And then if a defendant is convicted, to 
provide restitution to crime victims. So I think the burden 
should be on those who are in this room that suggest that this 
kind of legislation is unconstitutional to prove why laws in 
California, Minnesota, my home State of Utah and Pennsylvania 
that do essentially the same thing have all been on the books 
and have all survived constitutional challenges.
    Mr. Lungren. Maybe I would ask the question this way. The 
allegation has been put forward that if this bill goes forward, 
it would result in virtually all of these defendants being 
placed in a position of indigency such that they would not be 
able to afford their lawyers. Does anybody know what has 
happened in those States such as my home State or Utah or the 
others that have this, where it has been put into place, do we 
have the reality that that has rendered these defendants 
incapable of hiring their own counsel and therefore essentially 
getting indigent lawyers?
    Mr. Cassell. That has not happened in Utah, Congressman.
    Mr. Lungren. Okay. Any of the other three, could you give 
me some advice on that?
    Mr. Weissmann. I can address that on the Federal level 
because right now there is the ability to obtain an ex parte 
order with respect to forfeiture. The difference in this bill 
is that post indictment with respect to restitution, the 
procedural protections that are in place currently with respect 
to pretrial, preconviction, pre-indictment restraints of 
forfeiture do not exist with respect to what would be put in 
place----
    Mr. Lungren. I understand that. But I am saying we have at 
least four States as I understand it that have this with 
respect to--not all crimes. I understand this is broader. But 
with respect to certain categories of white-collar crimes. So--
and it is pre-indictment as I understand it. And it follows 
many of the parameters of this bill. Look, I don't want to see 
abuses by prosecutors. But I am trying to find out if the 
criticisms that you have registered have proven out in the 
experiences of the States that have similar statutes or you can 
argue to me if you will that these are different types of 
statutes than what we are talking about here. I am just trying 
to figure out----
    Mr. Weissmann. I don't know the answer with respect to the 
specific States, but I would tell you that the things to look 
at to see whether there are sufficient procedural protections 
are is there a limited period of time after an ex parte order 
is entered after which it sunsets and that the defendant has a 
real opportunity to have a hearing. Neither of those are true 
with respect to the provision that is proposed here.
    Mr. Lungren. Well, let me ask you that. This bill--at least 
H.R. 845, at least on page 21 has the defendant's right to a 
hearing. And it says in the case of a pre-indictment protective 
order entered under subsection such and such, the defendant's 
right to a post restraint hearing shall be governed by 
paragraphs 1(b)b and 2 of section 413(e) of the Controlled 
Substance Act. And I looked at the Controlled Substance Act and 
it says that you have a right to a hearing and I believe it is 
within 10 or 15 days.
    Mr. Weissmann. Yes, it is within 10 days. And there is a 
10-day and a 90-day provision. One of the anomalies with the 
current bill is that for somebody where it is pre-indictment, 
it just tracks the current forfeiture provisions for an ex 
parte restraint. If it is post indictment, almost all of the 
protections that currently exist are wiped out. So it is not a 
limited opportunity--a limited period where the order is in 
place. The opportunity for the defense to challenge it is 
virtually nil. There is no requirement to show that the assets 
would be dissipated. That is not even something that the 
prosecutor has to even show a judge is possible, which is, of 
course, something that is required in the civil context. So 
that many of the procedural requirements that currently exist 
in the--that are tracked here with respect to forfeiture pre-
indictment do not exist post indictment in this bill.
    Mr. Scott. Will the gentleman yield?
    Mr. Lungren. Well, I am confused because what I read was 
specifically that it said post restraint hearing, the right to 
a post restraint hearing, which is still pre-indictment but it 
is after the freezing. They refer to it as a restraint occurs. 
Then as I understand it, you have governed by this section of 
the Code which says a hearing requested concerning an order 
entered into this paragraph shall be heard at the earliest 
possible time. And so that is what I am----
    Mr. Scott. Will the gentleman yield?
    Mr. Lungren. Yes. I would be happy to.
    Mr. Scott. You get the hearing. The next step is what 
happens at the hearing.
    Mr. Lungren. I understand that. But I am just saying as I 
understand it----
    Mr. Scott. And I think one of the complaints is that at the 
hearing the prosecutor says we have probable cause and that is 
the beginning and the end of the hearing.
    Mr. Turley. To answer both of the questions--I am sure 
everyone's answer as well--first of all, your first question, I 
know of no law in any of the States that you mentioned as broad 
as this law and I know of no law that deals with restitution.
    Mr. Lungren. I understand about broad. And I said that as 
part of my question. But I said the way it actually has worked 
in that universe of offenses to which it applies has what you 
have suggested would result if this went into effect taken 
place with that universe of defendants.
    Mr. Turley. Yeah. If you shrink the universe--actually, 
there is a smaller universe in Federal law. There are some 
provisions involving asset hearings in Federal law as well. But 
I think the point that is made by the Chairman is really the 
correct one, that the reference that you are making, the pour-
over clause to controlled substances defines essentially the 
framework of the hearing and once you get the hearing. Once you 
get there, the standard is basically answered by the subject of 
the hearing that--because all you have to do is show that you 
have probable cause that if convicted you would be subject to 
restitution under these offenses.
    Well, particularly if you make restitution applicable, the 
probable cause standard--you have to show that there is a 
probable cause standard error, that there was an error that you 
would not be subject to restitution. Otherwise I don't know 
what the purpose of the hearing is because it is not a mini 
trial.
    Mr. Lungren. What I am saying, though, is I understand that 
that is the same standard used in the California law. It is 
upon the showing of probable cause. It is nothing more than 
that. So my point is, if that is such an insurmountable 
impediment for the defendant, that it is almost inevitable that 
he or she will always lose and will have these consequences 
that you have talked about--and I am trying to think of that as 
legitimate potential consequences. If that has not occurred in 
the application of the law, maybe it is not as inevitable as 
you suggest.
    And again I am trying to figure out a way--I mean, when I 
came to Congress in 1979, I worked with Ab Mikva to try to make 
restitution a significant working part of the Federal criminal 
justice system. I have, with real enthusiasm, hoped that that 
would be a part of our system. And when I see a GAO report that 
shows that it is not working well, I am willing to look at 
different mechanisms to make it work. And it would be helpful 
if in addition to opposing this--I realize you have just been 
asked to testify about this--in addition to opposing this, you 
might give us some recommendations as to how it might actually 
work such that the guys that--we all agree, you know, at the 
time that they are convicted and, man, their assets are gone, 
they have been secreted somewhere, they can't get them. That is 
not only unfair to the overall justice system, it is unfair to 
the victims.
    And how do we deal with it in a way that is also fair to 
people that have the presumption of innocence before trial and 
is there not a--both a practical and legal difference between 
forfeiting that asset and freezing that asset or at least as I 
take it from three of you on the panel, there is no real 
practical difference, you are denying that person that 
property. One of the arguments of the proponents is there is a 
significant difference between the two. And I guess you were 
arguing that there really is not a difference between 
forfeiting it and freezing it as far as the ability to defend--
--
    Mr. Turley. I think that there is no practical difference 
when you freeze assets in a proceeding like this. I think what 
it does--I think it will be a nightmare for judges, because 
what it does is once the assets are frozen--I have got to tell 
you, I could not imagine a prosecutor worth any, you know, 
worth not being able to freeze all of the assets under some of 
these theories of a normal case. But once those assets are 
frozen, you can come back and say, look, I need some of that 
money for attorneys. And the judge is in the position to say, 
well, how much do you need? How much do you have? And the judge 
is going to be essentially treating your assets like you were 
an indigent defendant. They will be treating your assets 
because the judge is allowed under these rules to release funds 
if it considers that you are showing that indeed you need the 
money for counsel.
    Mr. Scott. Will the gentleman yield?
    Mr. Lungren. Sure.
    Mr. Scott. One of the bills--you get the hearing if you 
need the money for the attorneys, but I don't see where you 
can----
    Mr. Smith. You are right, Mr. Chairman, there is no 
provision. Mr. Turley is wrong about this one. There is no 
provision in here which allows the judge to release assets to 
pay attorneys or for necessary living expenses. And that is one 
of the major--one of the most obvious reasons why this 
provision is dreadful.
    Mr. Lungren. Mr. Cassell, would you object to that?
    Mr. Cassell. I am looking right at here. It says that if 
there are assets available to the defendant to retain counsel 
in a criminal case or to provide for reasonable living 
allowances----
    Mr. Scott. That gets you the hearing. Then where further 
down do you get to use--once you are--that gets you to the 
hearing.
    Mr. Smith. That gets you to the hearing. Exactly.
    Mr. Scott. Now, once you are in the hearing, the judge 
doesn't have any authority to actually release the money.
    Mr. Cassell. That is not my reading of the bill. And if 
that is what the law says, that is a drafting issue.
    Mr. Lungren. Professor Cassell, would you object to that?
    Mr. Cassell. No, of course not. I mean, it has been the law 
in California--I guess . . . maybe what we should do is take 
the California law you wrote or helped to write 10 years ago, 
Xerox that and put that into the Federal statutes, because that 
seems to have worked well for 10 or 11 years out in California 
to allow prosecutors to seize assets without creating this 
parade of horribles that we hear from the----
    Mr. Lungren. This is another example, Professor Cassell, 
why I am so opposite that I can't refer to you as Judge Cassell 
anymore. I yield back.
    Mr. Scott. The gentleman's time has expired. We will have 
another round of questions. One of the problems, Professor 
Cassell, is with tweaking is the entire basis of the bill is an 
ex parte pre-indictment, no notice freezing of assets without 
discretion on the judge to release the assets so long as there 
is a facial showing of probable cause. You could have the 
situation in a criminal case where the defendant can show by 
the preponderance of the evidence that he is innocent. But if 
there is still probable cause, his assets are frozen until he 
can get to court. This is pre-indictment. So it is kind of hard 
to tweak when that is the basis of the bill. Mr. Smith, are you 
familiar with the Virginia victims compensation law?
    Mr. Smith. No, I am not, your honor. I mean Mr. Chairman. I 
am not.
    Mr. Scott. What would happen in partnership assets if one 
of the--if the partnership is being charged with a crime, do 
all the partners and all of their personal assets get caught up 
in this?
    Mr. Smith. If a partnership is charged with a crime, yeah, 
sure, all of their assets could be frozen under this provision. 
You see, this asset freeze provision is modeled after the 
Federal forfeiture laws. And to me it is also a shame that the 
Federal forfeiture laws do not have any provision to allow to 
give a judge discretion to release funds needed to support 
one's family or to pay counsel. In other words, if the 
government makes that probable cause showing that these assets 
are subject to forfeiture, that is the end of the matter.
    Mr. Scott. In these bills?
    Mr. Smith. No. Not just under this bill, but under current 
forfeiture law, that is also the law.
    Mr. Scott. But that is after conviction?
    Mr. Smith. No, that is before conviction.
    Mr. Scott. But that is with fruits of the crime?
    Mr. Smith. By probable cause.
    Mr. Scott. Fruits of the crime, not----
    Mr. Smith. An ex parte showing a probable cause is enough 
to freeze the assets in the Federal forfeiture case. And then 
even if the defendant, let's say, needs the money to pay for 
his wife's cancer operation, the judge has absolutely no 
authority to order that money to be released for that purpose 
because it is subject to forfeiture.
    Mr. Scott. But that is only fruits of the crime assets.
    Mr. Smith. Excuse me?
    Mr. Scott. Is that just fruits of the crime assets?
    Mr. Smith. Yes. In other words, it has to be tainted money. 
And this provision goes, you know, enormously further because 
it allows the government to freeze all of the defendant's 
assets, clean money, dirty money and anything in between.
    Mr. Scott. Now, if you are on appeal--you have been 
convicted and on appeal, what is the present law on liquidating 
your assets and what would these bills do to that law in 
liquidating your assets unrelated to the crime?
    Mr. Smith. On appeal under this statute?
    Mr. Scott. Right.
    Mr. Smith. Well, again, one of the provisions in these 
bills takes away a Federal judge's power to allow the defendant 
to not pay restitution during--while his case is on appeal. He 
can be compelled to pay the restitution. And so that even if he 
wins his appeal, he doesn't get his money back because he can't 
compel the victims to whom the money has been paid, the 
supposed victims, to give it back. And I think that is a very 
ill-conceived provision as well. It is unfair because there is 
no way to undo the damage if the defendant wins his appeal and 
is exonerated.
    Mr. Scott. How are innocent third parties protected if you 
have a construction firm, somebody has prepaid for the building 
of the house, how are they protected under this freezing of 
assets? Because if you have been prepaid for the house, the 
contractor can't build the house if his checking account is 
frozen, he can't pay the workers. What happens--do innocent 
third parties get to come in----
    Mr. Smith. They are out of luck because as--there are no 
special provisions in these bills for innocent third parties. 
In fact, they have even fewer rights than the pathetically 
limited rights they have under the Federal forfeiture statutes. 
Here----
    Mr. Cassell. That is just not right. The provision I am 
looking at it says third party's right to post restraint 
hearing. There it is right there.
    Mr. Scott. Read that section so we know what a third 
party--innocent third party would have to prove to get their 
money kind of unfrozen.
    Mr. Cassell. A person other than a defendant who has a 
legal interest in a property affected by a protective order 
issued under this law may move to modify the order on the 
grounds that the order causes an immediate and irreparable 
hardship to the moving party and less intrusive means exist to 
preserve the property for restitution. If after considering the 
evidence, the judge is entitled to modify the order.
    Mr. Scott. So the third party would have to come in and 
argue the case?
    Mr. Cassell. Right. But remember, though, what the other 
interests are.
    There are crime victims that are involved here who are 
entitled to recover restitution, and the money is being spent 
on trips to Europe or things like that. This says a third party 
can come in and say, wait a minute, I have a stronger claim 
than the crime victim does and then it lets the judge sort out 
all----
    Mr. Scott. The problem with this is this is all pre-
indictment.
    Mr. Weissmann.
    Mr. Weissmann. There is one provision that my colleague 
just didn't mention. Once that third party comes in and makes 
that showing, what the court is allowed to do, if a third party 
comes in and makes those two showings, basically the court has 
this discretion. The court shall modify the order to mitigate 
the hardship to the extent that it is possible to do so while 
preserving the asset for restitution.
    With that language, what exactly can a court do? The asset 
needs to be restrained for restitution. So I don't know how the 
court satisfies that prong and grant relief.
    Mr. Smith. That is the point I wanted to make. That 
provision is not in Federal forfeiture statutes.
    In other words, a third party can come in a forfeiture case 
and say, judge, you've restrained my assets, and I am innocent. 
It is a mistake. I actually own this property, not the 
defendant. The judge has the power to lift the restraining 
order and return those assets to the third party.
    But as you just heard from Mr. Weissmann, under these 
provisions in the bills in front of you, the judge does not 
have that authority. He can't return the asset to the third 
party because that would make the property unavailable to pay a 
future restitution order.
    Mr. Scott. Mr. Turley.
    Mr. Turley. Actually, this hits on one of the main problems 
in this design; and it is that you expand the pool of people 
that can make claims upon the assets by expanding the victims. 
You actually make the defendant pay for attorneys fees for 
other attorneys. So if you challenge that, you are running up 
fees you may ultimately have to pay.
    But, in the end, the court is in a weird position. He is 
sort of like a special master. He has to sit there and decide 
who gets what out of the asset pool. And there is not many 
guidelines here.
    And I also want to note, if I would, about the disagreement 
earlier. Part of this all folds into the same problem with 
regard to the power of the court to release money for 
attorneys. And that is, if you take a look at the post-
indictment provision, the very purpose of the hearing is that 
you have established by a preponderance of the evidence that 
indeed you need this money for counsel.
    So the point--you are having a hearing on that subject, but 
when you get to the hearing it doesn't say anything about that 
as the basis for releasing assets, and so you have two 
provisions that are in conflict.
    My guess is that a court would probably resolve it to mean 
that, actually, they have a fair amount of authority to 
determine that not all these assets are needed to protect 
victims, and they would probably resolve it. Because that is 
the subject of the hearing, is your right to get attorneys 
fees.
    But all of these show what madness may lie at the end of 
this road. Because you are going to have a lot of people making 
claims on limited assets, a judge who is going to have to try 
to manage that as well as requests for attorneys fees and 
determine what her authority is to grant them, and at the end 
of that road that court is going to have to sit there and 
divide up this pie. And I have to tell you I would not want to 
be there for that event.
    Mr. Cassell. I don't think it would be that difficult to 
sort some of these things out. What is madness here is we let 
criminals go off to Europe, squander assets, and at the end of 
the day say to crime victims, I am sorry, we've let the 
criminals spend all the money. There is nothing left for you. 
That is what is madness here, and that is what the Subcommittee 
should change.
    Mr. Scott. That is one of my original points. You have the 
same provision for the guilty as well as the innocent. Someone 
who is subsequently found to be not guilty cannot spend his own 
money.
    Mr. Cassell. For the limited period of time, 69 days under 
the Speedy Trial Act while they are awaiting trial.
    Mr. Scott. Wait a minute. That is after indictment. How 
long--let me ask somebody. Mr. Weissmann, how long can they go 
with one of these things? After they have frozen your assets, 
when do they have to indict you?
    Mr. Weissmann. They don't. But the other is post-indictment 
to say that you go to trial in 70 days because of the Speedy 
Trial Act is--in my experience in 15 years I never saw a case 
go to trial in 70 days. That just doesn't happen. The Speedy 
Trial Act has so many exclusions, so you could have this kind 
of pretrial restraint for years. Enron is a good example of 
that.
    Mr. Scott. And then once the trial starts, how long does a 
trial take?
    Mr. Weissmann. It could take a week. It could take 6 
months.
    Mr. Scott. During which time your assets are frozen?
    Mr. Weissmann. Yes, and it could be assets you want to use 
for counsel.
    Mr. Scott. And if you are trying to run a business, the 
corporate checking account or the business checking account is 
frozen. It is in your name.
    Mr. Weissmann. Yes. Right. And that is where the difference 
between seizure and freezing is really illusory when you need 
the money.
    Mr. Turley. The great moment, actually, in sports for this 
statute actually comes when you have a transfer of property, 
when you have a defendant who is deceased. So under one of the 
sort of accidents waiting to happen is that if you have a 
defendant who dies and so property transfers, let's say, to his 
family, under these provisions it would seem to read that the 
government can go after that family and say, we know you have 
this house in fee simple transfer, but we have determined that 
this was a really bad guy, and so we are going to come after 
you. And that would--you are talking about all this end pipe 
problems. That really would be an extraordinary act.
    Mr. Scott. Let me ask one other question. Do you have--I 
will yield to the gentleman from Georgia for 5 minutes.
    Mr. Johnson. Yes, thank you, Mr. Chairman.
    I want to make sure I have this correct. A pre-indictment 
asset, or the pre-indictment asset restraint provision kicks in 
upon an ex parte showing of probable cause that the indictment 
will allege an offense which requires restitution to be paid. 
Is that correct?
    Mr. Cassell. That's correct; and then there is, of course, 
the right to a hearing very rapidly.
    Mr. Johnson. And the defendant then can request a hearing. 
And the government would simply show--they would simply show by 
probable cause that the indictment that will come will allege a 
crime for which restitution must be ordered.
    Mr. Cassell. And that the amount of restitution in question 
is necessary----
    Mr. Johnson. No, no, no, I don't want to go that far. I 
just want to say that the only thing that the government has to 
prove by probable cause is that they will charge, in an 
indictment, that the defendant has committed a crime which 
requires that restitution be ordered.
    Mr. Turley. And if 845 is enacted, all crimes will be 
subject to restitution.
    Mr. Johnson. So it doesn't matter how much restitution. It 
is just a fact that restitution can be ordered or must be 
ordered as a result of an indictment to come.
    Mr. Turley. It would be the world's shortest probable cause 
hearing. The prosecutor will walk in and----
    Mr. Johnson. And it won't be probable cause that the 
defendant committed the offense to be alleged against him.
    Mr. Turley. Right. It can't be.
    Mr. Johnson. It is simply that the species of the 
allegation to be leveled in the future is one that would 
require restitution to be ordered.
    Mr. Turley. That's right. The language of the statute would 
answer the question of the hearing. And as Judge Cassell was 
going to point out about the size of the award, you have to 
remember at this stage you're pre-indictment. But even if you 
are post-indictment pretrial, that indictment is very likely in 
many cases subject to a superseding indictment. Counsel will be 
dropped.
    You are talking about the earliest possible stage. So you 
have the maximum number of counts, and all the prosecutor has 
to show the judge is this huge universe of potential victims 
under this act and say all of these people can ask for these 
assets. That's a fluid standard that you can easily stretch the 
limits of anyone's asset.
    Mr. Cassell. I guess I would say why hasn't this happened 
in California in the last 12 years? At Page 29 in my testimony, 
I recount the California law that Congressman Lungren helped 
draft. It has the same language, including pre-indictment 
language, as I understand it, and this parade of horribles that 
we keep hearing is going to happen--it is going to threaten the 
sixth amendment; it is going to lead to persons kicked out on 
the street without a roof over their heads--none of this has 
happened in California.
    What has happened in California is that crime victims have 
been able to get money back to them that criminals have taken 
from them. That's the fundamental issue here.
    And there are certainly some drafting issues that can be 
looked at, and you may have put your finger on some words that 
need to be tightened up. But the goal here should be to ensure 
that crime victims get compensation in a fair way, not to 
simply say, well, there are drafting problems here, and we will 
throw the whole thing out.
    Mr. Scott. In your testimony, you cite at the hearing the 
court is directed to consider relevant factors as follows: 
Shall weigh the relevant degree of certainty of outcome on the 
merits, the consequences to each of the parties of granting 
interim relief. If the prosecution is likely to prevail on the 
merits and the risk of dissipation outweighs potential harm to 
the defendants and interested parties, the court shall grant 
relief, shall give significant weight to the following factors 
and so on and so forth.
    This says once probable cause attaches, you don't consider 
anything. There is no weighing. It's a done deal.
    In fact, on the initial thing, all the defendant knows is 
his check has bounced. The U.S. Attorney says, I have an ex 
parte. You go in. You don't even know what you're defending. 
How do you prepare for a hearing?
    I mean, I guess you got to get a continuance after you get 
a little bit of what the allegations are, and you still can't 
write a check. There is no weighing. There is no public 
interest in preserving the property. There is no public 
interest measure.
    Mr. Johnson. In reclaiming my time, the universe of the 
charges that are possible is infinite.
    Mr. Cassell. I guess my point would be this. If you think 
the California language is better--and there are certainly some 
things in the California statute that aren't in this statute, 
there are things in this statute that aren't in the California 
statute--but if you like the California statute better, you 
couild just copy that and put that into the Federal Code. 
Because that will at least give prosecutors a tool that they 
could use to freeze assets when it was necessary. Right now, 
they don't have that tool at all.
    Mr. Smith. I would like the raise a point about this 
reliance on State law. I am not familiar with this California 
statute that Professor Cassell is talking about. But in my 
experience with State forfeiture laws, which is very extensive, 
I have found that generally the States are very, very 
unaggressive in white-collar cases, assuming they do them at 
all. And that is what we are talking about here. There is no 
restitution money to be raised in anything but white-collar 
cases.
    I would like to know--I would like to see statistics on how 
much money California has actually recovered for victims 
through this statute and how much increase there was once the 
statute was enacted. And I will bet you it is very small. 
Because they just don't have the resources to do these big 
white-collar cases that the Feds do, and so I really doubt that 
one can learn very much from whatever State experience is out 
there.
    Mr. Scott. Well, one of the cases that I think would--one 
of the first things you would see in a controversy, you have 
some businessman, a contractor or something, charged with a 
drug crime, charged with some theft or some conspiracy or 
something; and the first thing they go in and freeze the 
business assets.
    Let me ask one final question. Mr. Smith, can you talk 
about the effect of all of this on your right to choose counsel 
and the constitutional implications of freezing your assets and 
your right to choose a counsel?
    Mr. Smith. Can I speak to that? Absolutely.
    I think it will have a devastating effect on your ability 
to choose counsel or to obtain any private counsel. And one of 
the questions that we pose, which nobody really answered, was 
how in the world do you get the necessary money to even 
challenge one of these restraint orders if all your assets are 
frozen? I mean, it is like a chicken-egg problem. How do you 
get the money to--and believe me, I know from experience it 
takes a lot of money to challenge one of these orders. Because 
you have got to learn the case. And how are you going to learn 
the case? It is basically all secret at this point.
    Mr. Scott. Because all you know is your checks bounced.
    Mr. Smith. Exactly. You know your checks bounced, and they 
have your money. But you don't know what their theory is or 
what their evidence is, and you're not going to. And it is 
going to be difficult to find out. So how do you get a lawyer 
to take your case to challenge the restraint order when you 
don't have any money to do so? Nobody answers that question.
    One of the points I make in my statement, which we didn't 
really mention here, is that Congress has several times 
rejected the Department of Justice's proposals to extend 
pretrial asset restraint to what are called substitute assets, 
meaning clean or legitimate assets that are subject to 
forfeiture under our forfeiture statutes. But Congress is quite 
smart, wisely refused to allow the government to freeze those 
assets prior to trial. And why is that?
    Every time the government has proposed that, even in the 
Patriot Act of 2001, which just sailed through under the 
pressure of 9/11, that provision, when they stuck it into the 
Patriot Act, because they figured, well, everything in this act 
is going to pass, but, guess what, Senator Leahy took it out. 
It is not in there because he knew exactly what would happen if 
you give the government this tremendous authority to freeze 
clean assets prior to trial. It would basically mean the end of 
our adversary system of justice or at least the replacement of 
the private bar with public defenders in pretty much every case 
unless for whatever reason the prosecutor was nice enough to 
just ignore his powers under this statute. And if you want to 
do that, then just go ahead and do it. Abolish the defense bar. 
Make everybody a public defender.
    But is it really worth it? How much money has been--is 
going to be obtained for victims that way, by abolishing the 
private practice of criminal defense work? Not very much.
    And, to me, it is just--the two things are so out of 
proportion that that is why I say, you know--at least I am not 
talking about the rest of the bill. Obviously, reasonable 
people can differ about a lot of the provisions in this bill. I 
am talking about this provision, the pretrial asset restraint 
provision.
    I don't really see what reasonable argument can be made 
that this is so necessary to raise money for victims that we 
need to jeopardize the existence of a private defense bar and 
basically put everybody--every criminal defendant at the mercy 
of every prosecutor. And that is why Congress has repeatedly 
rejected this idea. In the forfeiture context, why in the 
world--where, by definition, assets are supposed to be subject 
to forfeiture, why in the world would we allow this in the 
restitution context where, you know, all that is at stake is 
money, basically. We are not talking about the--you are 
sacrificing the sixth amendment right to counsel to a victim's 
desire to be compensated.
    There are much better ways, and I think the Chair has 
suggested some better ways to compensate the victims. Let's let 
the Treasury compensate them, if necessary. But don't allow the 
government to pauperize every defendant in order to pursue this 
will of the wisp.
    Mr. Cassell. Can I correct Mr. Smith on one point?
    Mr. Scott. Just a minute. Mr. Turley.
    Mr. Turley. Thank you, Mr. Chairman.
    Just to respond to the question you asked about the sixth 
amendment, there is a misunderstanding I think with some 
supporters of the bill that Caplin Drysdale would support this 
bill. Because in Caplin Drysdale was where the Court--the 
Supreme Court and in Monsanto said that you can, in fact, have 
forfeiture of assets that are claimed for attorneys fees and 
that it is not a violation of the sixth amendment. But that is 
indeed the difference between forfeiture and a restitution. The 
reason you can freeze that money is because the money is not 
yours because they are showing that it is tainted money.
    And the only other point I would raise is everyone is 
talking about dividing this up for victims. In my view, this is 
not going to get more money to victims, but it may very well 
get some money to attorneys. Because if you're talking about 
the 15 percent that actually has assets, they are going to have 
their assets thrown into these pots, the defendant has to pay 
for the attorneys who are going after the assets. Those 
attorneys will have agreements, I assure you, from their 
clients that they will get paid. They will get a priority 
interest in those assets or they will be paid directly.
    I think the most likely result is that these victims funds 
are going to go largely to lawyers.
    Mr. Scott. Final comment, Professor.
    Mr. Cassell. Yes, thank you, Mr. Chairman. I appreciate 
that.
    It is simply not true to say Congress has repeatedly 
rejected this. This bill comes before this Committee having 
passed the Senate already.
    And with regard to how much money is at stake here, Senator 
Dorgan's example has gone unchallenged today. More than $10 
million was transferred by the defendants in those cases, 
transferred away from victims that could have desperately used 
that money for their legitimate losses. And so I would urge 
this Subcommittee to move forward with the bill.
    Mr. Scott. Thank you.
    A letter from Thomas Hillier from the Federal Public 
Defender be entered into the record. Without objection.
    I want to thank all of our witnesses, and I would like to 
thank you for your testimony today.
    Members may have additional questions which we will forward 
to you and ask that you answer as promptly as you can so they 
be made part of the record.
    Without objection, the hearing record will remain open for 
1 week for the submission of additional materials.
    Without objection, the Subcommittee stands adjourned. Thank 
you very much.
    [Whereupon, at 4:30 p.m., the Subcommittee was adjourned.]



















                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
in Congress from the State of Michigan, and Chairman, Committee on the 
                               Judiciary

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       Prepared Statement of the Honorable Sheila Jackson Lee, a 
    Representative in Congress from the State of Texas, and Member, 
        Subcommittee on Crime, Terrorism, and Homeland Security
    Mr. Chairman, thank you for your leadership in convening today's 
very important hearing legislative proposals before the 110th Congress 
to amend federal restitution laws. I would also like to thank the 
ranking member, the Honorable Louie Gohmert. Welcome to our 
distinguished panelists.
    Since 1925, with the enactment of the Federal Probation Act, 
restitution has been an accepted form of punishment with the federal 
criminal justice system. Simply put restitution is the money a judge 
orders an offender to pay to the victim(s) to compensate for damages 
related to the crime.
    Restitution is part of the offender's sentence and can be ordered 
in both adult and juvenile cases following a conviction or a plea of 
guilty. The amount of restitution ordered by the judge is contingent 
upon the victim's expenses related to the crime and the offender's 
ability to pay.
    Presently, restitution can only be requested for out-of-pocket 
expenses incurred by the victim as the result of a crime. If the entire 
amount of the victim's loss is unknown at the time of sentencing, the 
amount of restitution ordered may be determined at a later date.
    All requested restitution costs must be directly related to the 
criminal act perpetrated by the charged defendant(s). Expenses incurred 
by another critical incident will not be considered for payment. Some 
judges will only order restitution for expenses not covered by 
insurance.
    Payment for physical pain and/or emotional trauma can not be 
ordered by the criminal court. Victims who seek additional financial 
compensation for this type of loss must retain a civil attorney for 
representation. The offender's financial resources and ability to pay 
should be considered when assessing this recovery option.
    Restitution can be mandatory or discretionary. Once the court 
determines the restitution amount, the resulting amount is the 
restitution that the court must impose in mandatory restitution cases. 
Offenses which mandate the imposition of the full restitution amount 
are those listed in 18 U.S.C. sections 3663A, 2248, 2259, 2264, and 
2327. Discretionary restitution is authorized as a separate order for 
any offense listed in section 3663.
    In discretionary restitution cases, the restitution amount imposed 
is the result of balancing the harm with a consideration of the 
defendant's ability to pay restitution for that harm. In deciding 
whether to impose discretionary restitution, the court must consider 
the statutory ``factors'' provided in section 3663(a)(1)(B)(i), which 
are: ``The court, in determining whether to order restitution under 
this section, shall consider--(I) the amount of the loss sustained by 
each victim as a result of the offense; and (II) the financial 
resources of the defendant, financial needs and earning ability of the 
defendant and the defendant's dependents, and such other factors as the 
court deems appropriate.'' Determining the defendant's ability to pay 
is also relevant in determining the amount of a fine to impose, and it 
is relevant to determining the manner of payment of any restitution 
order, pursuant to 18 U.S.C. section 3663(f)(2).
    The Subcommittee will examine proposed legislation that would make 
substantial changes in federal restitution law. Three legislative 
proposals, two before the House and one before the Senate, have the 
potential of imposing sweeping changes to restitution requirements on 
defendants, altering the discretion of judges, and freezing the assets 
of citizens even before they are charged with a crime. The Subcommittee 
will examine the proposals and hear arguments concerning them.
    Mr. Chairman, the Subcommittee will hear testimony about S.973, 
H.R. 845, the ``Criminal Restitution Improvement Act,'' sponsored by 
Honorable Steve Chabot (OH) and H.R. 4110, the ``Restitution for 
Victims of Crime Act of 2007'', sponsored by the Honorable Carol Shea-
Porter (NH). These proposals call for the expansion of prosecutorial 
authority to freeze a defendant's assets in anticipation that the 
defendant will have to pay restitution to a crime victim.
    Reform is needed because uncollected federal restitution and fine 
payments totaled nearly $46 billion at the end of fiscal year 2006, the 
latest total available from the Justice Department, an increase of $5 
billion over the year before. While reform is needed, these legislative 
proposals are not the answer. Instead, their enactment will lead to 
increased claims of restitution and more uncollected funds.
    The legislative proposals that we are examining today call for 
three kinds of adjustments to ensure control over a defendant's assets: 
expanding the universe of crime victims entitled to restitution, 
expanding the government's ability to control a defendant's assets 
procedurally, and creating a new avenue of controlling a defendant's 
assets by authorizing pre-conviction asset freezing.
    These proposals expand the universe of potential victims by 
expanding the number of offenses for which restitution would be 
ordered. S. 973 and H.R. 4100 would add six statutes to those already 
authorizing the court to order restitution at its discretion.
    H.R. 845 is more far-reaching because it would mandate restitution 
for all federal offenses. This would lead to a large volume of crime 
victims who would qualify for restitution.
    These proposals also expand the universe of potential crime victims 
by expanding the definition of a crime victim. Currently, the law 
defines victims for mandatory restitution as (1) those designated in a 
plea bargain, (2) the estate of a victim, (3) those harmed directly and 
proximately by the offense, (4) those harmed by the scheme or pattern 
of the offense when the offense has a scheme or pattern as one of its 
elements, and (5) guardians when the victim is a minor or disabled. 18 
USC section 3663A(a)(1)(2006). H.R. 845 would provide for broader 
categories of victims and includes successors.
    H.R. 845 would amend the law to require restitution payments to be 
made immediately. Specifically, H.R. 845 states that ``upon 
determination of the amount of restitution owed to each victim, the 
court shall order that the full amount of restitution is due and 
payable immediately'' H.R. 845 sec. 3664(j)(1).
    All of the proposals provide that the court retains its authority 
to provide for payments based upon installments according to a 
schedule. The proposals also add that the Attorney General may collect 
and apply unreported or otherwise newly available assets to the payment 
due the victim without regard to the court's installment payment 
provision. This could have serious effects if the defendant does not 
have the money.
    S. 973 and H.R. 4110 add increased provisions for enforcement. 
Under these proposals, the defendant would be required to pay a minimum 
of $100 per year in restitution. Because prisoners get paid so little 
in prison and because prisoners are required to pay for their own 
personal hygiene products, it is unlikely that many inmates would be 
able to meet the $100 minimum payment for restitution.
    The Senate proposal amends current law by requiring defendants to 
pay restitution during an appeal, absent good cause. If the case is 
vacated or overturned on appeal, the government cannot compel the 
victim to return the restitution he or she was paid by the defendant. 
Rather, the defendant has the burden of recovering these funds from the 
victim.
    These proposals would also allow for pre-indictment freezing of a 
defendant's assets to ensure their availability should a defendant be 
convicted and ordered to pay restitution. This might be considered a 
seizure, which is abhorred by the law and is arguably unconstitutional.
    The proposals before us today do little in the way of ensuring that 
the $46 billion in uncollected federal restitution and fine payments 
will ever be collected. Instead, these proposals add further strain to 
a weak system, make uncollected federal restitution grow to even more 
staggering heights, and severely curtail the constitutional rights of 
defendants. These proposals expand the number of offenses for which 
restitution would be ordered and it expands the number of crime victims 
who would qualify for restitution. Additionally, these proposals make 
the full amount of restitution due and payable immediately. They 
require a defendant to pay restitution while appeals are ongoing. They 
also allow pre-indictment freezing of a defendant's assets to ensure 
their availability should a defendant be convicted and ordered to pay 
restitution. These expanded restitution proposals amount to debtors 
prison and will have the effect of either keeping defendants in prison 
because they are unable to meet their restitution obligations or 
because they must resort to a criminal activity to pay for the 
restitution owed to victims.
    I welcome today's hearing and I look forward to hearing from 
today's panelists. This problem of uncollected restitution is a big one 
and Congress must address it. However, these proposals are not the 
vehicle for addressing the problem.
    Thank you. Mr. Chairman, I yield the remainder of my time.

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