[Congressional Record Volume 153, Number 1 (Thursday, January 4, 2007)]
[Senate]
[Pages S138-S140]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself and Mr. Sessions):
  S. 149. A bill to address the effect of the death of a defendant in 
Federal criminal proceedings; to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, today I am pleased to join Senator 
Sessions in re-introducing the ``Preserving Crime Victims' Restitution 
Act.'' The Act would clarify the rule of law and procedures that should 
be applied when a criminal defendant, such as former Enron CEO Kenneth 
Lay, dies after he has been duly convicted, but before his appeals are 
final.
  This bill passed the Senate unanimously at the end of the 109th 
Congress, but unfortunately it was not taken up by the House. Except 
for minor, technical corrections, this new bill is the same as what the 
Senate passed in the last Congress, and I urge my colleagues to 
speedily pass this bill, as you did before, so that it can be enacted 
into law.
  As I mentioned when I introduced this bill last fall, we have worked 
closely with the Department of Justice in crafting this legislation, 
and have used much of DOJ's suggested language. DOJ fully supports the 
principles contained in this bill, and has indicated that it supports 
fixing this problem now to ensure that, despite a defendant's death, 
hard-won convictions are preserved so that restitution remains 
available for the victims of crime.
  This bill would establish that, if a defendant dies after being 
convicted of a federal offense, his conviction will not be vacated. 
Instead, the court will be directed to issue a statement that the 
defendant was convicted--either by a guilty plea or a verdict finding 
him guilty--but then died before his case or appeal was final.
  It would codify the current rule that no further punishments can be 
imposed on a person who is convicted if they die before a sentence is 
imposed or they have an opportunity to appeal their conviction. It 
would clarify that, unlike punishment, other relief (such as 
restitution to the victims) that could have been sought against a 
convicted defendant can continue to be pursued and collected after the 
defendant's death. It would establish a process to ensure that after a 
person dies, a representative of his estate can challenge or appeal his 
conviction if they want, and can also secure a lawyer--either on their 
own or by having one appointed and, if the Government had filed a 
criminal forfeiture action--in which it had sought to reach the 
defendant's assets that were linked to his crimes--the Government would 
get an extra 2 years after the defendant's death to file a civil 
forfeiture lawsuit so that it could try to recover those same assets in 
a different, and traditionally-accepted manner.
  The need for this legislation was vividly demonstrated on October 17, 
2006, when U.S. District Judge Sim Lake, of the Southern District of 
Texas, wiped clean the criminal record of Enron founder Kenneth Lay, 
even after a jury and judge had unanimously found him guilty of 10 
criminal charges, including securities fraud, wire fraud involving 
false and misleading statements, bank fraud and conspiracy.
  The decision to dismiss Mr. Lay's conviction was not based on any 
error in the trial, suggestion of unfairness in the proceedings, or 
allegation of his innocence. Instead, it was simply based on the fact 
that Mr. Lay died before his conviction had been affirmed on appeal, 
under a common law rule known as ``abatement.''
  In other words, the order essentially meant that Mr. Lay was 
``convicted but not guilty''--``innocent by reason of his death.''
  Judge Lake granted this dismissal even in the face of DOJ Enron Task 
Force filings, which noted how Mr. Lay's conviction ``provided the 
basis for the likely disgorgement of fraud proceeds totaling tens of 
millions of dollars.'' In other words, the dismissal meant that 
millions of dollars that the jury found was obtained by Mr. Lay 
illegally at the expense of former Enron employees and shareholders, 
would remain untouched in the Lay estate. These employees and 
shareholders will now find it much harder to lay claim to these ill-
gotten gains held by Mr. Lay's estate, because they will be unable to 
point to his criminal conviction as proof of his wrongdoing.
  I do not fault Judge Lake for issuing this order. He made it clear 
that he was simply following the binding precedent issued in 2004 by 
the full U.S. Court of Appeals for the 5th Circuit, in a case called 
United States v. Estate of Parsons.
  But as I noted in a letter I wrote to Attorney General Gonzales on 
October 20, 2006, the Fifth Circuit's Parsons decision goes far beyond 
the traditional rule of law in this area. While the common-law doctrine 
of abatement has historically wiped out ``punishments'' following a 
criminal defendant's death, the Supreme Court has never held that it 
must also wipe out a victim's right to other forms of relief such as 
restitution, which simply compensate third parties who were injured by 
criminal misconduct.
  As the six dissenters in Parsons noted, the majority's `` `finality 
rationale' is a completely novel judicial creation which has not been 
embraced or even suggested by . . . other courts.'' The Third and 
Fourth Circuits, for example, have expressly refused to take this 
position, and upheld a restitution order after a criminal defendant's 
death.
  The Parsons decision was remarkable in several other respects, 
including the fact that (as the dissenters noted), its new rule of law 
was apparently inspired by a single law review article. That academic 
piece boldly claimed that a criminal defendant's right of appeal is 
``evolving into a constitutional right,''

[[Page S139]]

and suggested that a conviction untested by appellate review is 
unreliable and illegitimate. This notion runs contrary to the 
traditional rule applied in virtually every other context--where a 
jury's findings are typically respected under the law.
  Of course a defendant is presumed innocent at the outset of his case. 
After a jury has deliberated and unanimously issued a formal finding of 
guilt, however, that presumption of innocence no longer stands.
  The Parsons ``finality'' rationale even raises the possibility that a 
defendant who fully admitted his wrongdoing and pleaded guilty, but who 
then died while an appeal of his sentence was pending, could have his 
entire criminal conviction erased.
  In fact, that has already occurred, in the 1994 case of United States 
v. Pogue, where the D.C. Circuit ordered the dismissal of a conviction 
of a defendant whose appeal was pending--even though the docketing 
statement had said that the defendant intended to challenge only his 
sentence, and not his underlying conviction.
  Following Judge Lake's decision, I sent a letter to the Attorney 
General, asking him to appeal the order and continue the fight for 
Enron victims. Unfortunately, the Justice Department decided in 
November to withdraw its appeal, leaving it up to the victims 
themselves to pursue any further relief.
  I am very disappointed in this decision. These victims have had their 
livelihoods and retirement stripped from them, and they deserved a 
Justice Department that was willing to fight vigorously to protect 
their interests.
  Enron's collapse in 2001 wiped out thousands of jobs, more than $60 
billion in market value, and more than $2 billion in pension plans. 
When America's seventh largest company crumbled into bankruptcy after 
its accounting tricks could no longer hide its billions in debt, 
countless former Enron employees and shareholders lost their entire 
life savings after investing in Enron's 401(k) plan.
  Many of these Enron victims have been following closely the years of 
preparation by the Enron Task Force, and the four-month jury trial and 
separate one-week bench trial, hoping to finally recover some 
restitution in this criminal case. And despite Mr. Lay's vigorous 
efforts to avoid being held accountable for his actions, a conviction 
was finally secured.
  Yet now these people have essentially been victimized again. They 
will be forced to start all over in their efforts to get back some 
portion of the pension funds on which they expected to subsist, and the 
other hard-earned assets that will remain beyond their reach, despite 
the unanimous, hard-fought verdicts finding Mr. Lay guilty of all ten 
counts with which he had been charged.
  I believe in situations like this, leaving the victims without this 
recourse is an unacceptable outcome. That is why I am introducing this 
bill to prevent further injustices like this from ever happening again.
  While I have no desire for our Government to punish a criminal 
defendant who dies, the calculation should be different when we are 
determining how to make up for harm suffered by other innocent victims.
  This legislation offers a fair solution and orderly process in the 
event that a criminal defendant dies prior to his final appeal.
  The time has come for Congress to end this injustice--hopefully, by 
acting quickly enough to assist these Enron victims, but in any event 
in a way that will solve the problems that the Lay dismissal so starkly 
illustrated.
  I urge my colleagues in the Senate to quickly pass this bill, as you 
did in the 109th Congress, so that we can enact it into law in the 
110th Congress.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 149

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Preserving Crime Victims' 
     Restitution Act of 2007''.

     SEC. 2. EFFECT OF DEATH OF A DEFENDANT IN FEDERAL CRIMINAL 
                   PROCEEDINGS.

       (a) In General.--Subchapter A of chapter 227 of title 18, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 3560. Effect of death of a defendant in Federal 
       criminal proceedings

       ``(a) General Rule.--Notwithstanding any other provision of 
     law, the death of a defendant who has been convicted of a 
     Federal criminal offense shall not be the basis for abating 
     or otherwise invalidating a plea of guilty or nolo contendere 
     accepted, a verdict returned, a sentence announced, or a 
     judgment entered prior to the death of that defendant, or for 
     dismissing or otherwise invalidating the indictment, 
     information, or complaint on which such a plea, verdict, 
     sentence, or judgment is based, except as provided in this 
     section.
       ``(b) Death After Plea or Verdict.--
       ``(1) Entry of judgment.--If a defendant dies after a plea 
     of guilty or nolo contendere has been accepted or a verdict 
     has been returned, but before judgment is entered, the court 
     shall enter a judgment incorporating the plea of guilty or 
     nolo contendere or the verdict, with the notation that the 
     defendant died before the judgment was entered.
       ``(2) Punitive sanctions.--
       ``(A) Death before sentence announced.--If a defendant dies 
     after a plea of guilty or nolo contendere has been accepted 
     or a verdict has been returned and before a sentence has been 
     announced, no sentence of probation, supervision, or 
     imprisonment may be imposed, no criminal forfeiture may be 
     ordered, and no liability for a fine or special assessment 
     may be imposed on the defendant or the defendant's estate.
       ``(B) Death after sentencing or judgment.--The death of a 
     defendant after a sentence has been announced or a judgment 
     has been entered, and before that defendant has exhausted or 
     waived the right to a direct appeal--
       ``(i) shall terminate any term of probation, supervision, 
     or imprisonment, and shall terminate the liability of that 
     defendant to pay any amount remaining due of a criminal 
     forfeiture, of a fine under section 3613(b), or of a special 
     assessment under section 3013; and
       ``(ii) shall not require return of any portion of any 
     criminal forfeiture, fine, or special assessment already 
     paid.
       ``(3) Restitution.--
       ``(A) Death before sentence announced.--If a defendant dies 
     after a plea of guilty or nolo contendere has been accepted 
     or a verdict has been returned and before a sentence has been 
     announced, the court shall, upon a motion under subsection 
     (c)(2) by the Government or any victim of that defendant's 
     crime, commence a special restitution proceeding at which the 
     court shall adjudicate and enter a final order of restitution 
     against the estate of that defendant in an amount equal to 
     the amount that would have been imposed if that defendant 
     were alive.
       ``(B) Death after sentencing or judgment.--The death of a 
     defendant after a sentence has been announced shall not be a 
     basis for abating or otherwise invalidating restitution 
     announced at sentencing or ordered after sentencing under 
     section 3664(d)(5) of this title or any other provision of 
     law.
       ``(4) Civil proceedings.--The death of a defendant after a 
     plea of guilty or nolo contendere has been accepted, a 
     verdict returned, a sentence announced, or a judgment 
     entered, shall not prevent the use of that plea, verdict, 
     sentence, or judgment in civil proceedings, to the extent 
     otherwise permitted by law.
       ``(c) Appeals, Motions, and Petitions.--
       ``(1) In general.--Except as provided in paragraph (2), 
     after the death of a defendant convicted in a criminal case--
       ``(A) no appeal, motion, or petition by or on behalf of 
     that defendant or the personal representative or estate of 
     that defendant, the Government, or a victim of that 
     defendant's crime seeking to challenge or reinstate a plea of 
     guilty or nolo contendere accepted, a verdict returned, a 
     sentence announced, or a judgment entered prior to the death 
     of that defendant shall be filed in that case after the death 
     of that defendant; and
       ``(B) any pending motion, petition, or appeal in that case 
     shall be dismissed with the notation that the dismissal is 
     due to the death of the defendant.
       ``(2) Exceptions.--
       ``(A) Restitution.--If a defendant dies after being 
     convicted in a criminal case but prior to sentencing or the 
     exhaustion or waiver of direct appeal, the personal 
     representative of that defendant, the Government, or any 
     victim of that defendant's crime may file or pursue an 
     otherwise permissible direct appeal, petition for mandamus or 
     a writ of certiorari, or an otherwise permissible motion 
     described in section 3663, 3663A, 3664, or 3771, to the 
     extent that the appeal, petition, or motion raises an 
     otherwise permissible claim to--
       ``(i) obtain, in a special restitution proceeding, a final 
     order of restitution under subsection (b)(3);
       ``(ii) enforce, correct, amend, adjust, reinstate, or 
     challenge any order of restitution; or
       ``(iii) challenge or reinstate a verdict, plea of guilty or 
     nolo contendere, sentence, or judgment on which--

       ``(I) a restitution order is based; or
       ``(II) restitution is being or will be sought by an appeal, 
     petition, or motion under this paragraph.

       ``(B) Other civil actions affected.--If a defendant dies 
     after being convicted in a criminal case but prior to 
     sentencing or the exhaustion or waiver of direct appeal, the

[[Page S140]]

     personal representative of that defendant, the Government, or 
     any victim of that defendant's crime may file or pursue an 
     otherwise permissible direct appeal, petition for mandamus or 
     a writ of certiorari, or an otherwise permissible motion 
     under the Federal Rules of Criminal Procedure, to the extent 
     that the appeal, petition, or motion raises an otherwise 
     permissible claim to challenge or reinstate a verdict, plea 
     of guilty or nolo contendere, sentence, or judgment that the 
     appellant, petitioner, or movant shows by a preponderance of 
     the evidence is, or will be, material in a pending or 
     reasonably anticipated civil proceeding, including civil 
     forfeiture proceedings.
       ``(C) Collateral consequences.--
       ``(i) In general.--Except as provided in subparagraphs (A) 
     and (B), the Government may not restrict any Federal benefits 
     or impose collateral consequences on the estate or a family 
     member of a deceased defendant based solely on the conviction 
     of a defendant who died before that defendant exhausted or 
     waived the right to direct appeal unless, not later than 90 
     days after the death of that defendant, the Government gives 
     notice to that estate or family member of the intent of the 
     Government to take such action.
       ``(ii) Personal representative.--If the Government gives 
     notice under clause (i), the court shall appoint a personal 
     representative for the deceased defendant that is the subject 
     of that notice, if not otherwise appointed, under section 
     (d)(2)(A).
       ``(iii) Tolling.--If the Government gives notice under 
     clause (i), any filing deadline that might otherwise apply 
     against the defendant, the estate of the defendant, or a 
     family member of the defendant shall be tolled until the date 
     of the appointment of that defendant's personal 
     representative under clause (ii).
       ``(3) Basis.--In any appeal, petition, or motion under 
     paragraph (2), the death of the defendant shall not be a 
     basis for relief.
       ``(d) Procedures Regarding Continuing Litigation.--
       ``(1) In general.--The standards and procedures for a 
     permitted appeal, petition, motion, or other proceeding under 
     subsection (c)(2) shall be the standards and procedures 
     otherwise provided by law, except that the personal 
     representative of the defendant shall be substituted for the 
     defendant.
       ``(2) Special procedures.--If continuing litigation is 
     initiated or could be initiated under subsection (c)(2), the 
     following procedures shall apply:
       ``(A) Notice and appointment of personal representative.--
     The district court before which the criminal case was filed 
     (or the appellate court if the matter is pending on direct 
     appeal) shall--
       ``(i) give notice to any victim of the convicted defendant 
     under section 3771(a)(2), and to the personal representative 
     of that defendant or, if there is none, the next of kin of 
     that defendant; and
       ``(ii) appoint a personal representative for that 
     defendant, if not otherwise appointed.
       ``(B) Counsel.--Counsel shall be appointed for the personal 
     representative of a defendant convicted in a criminal case 
     who dies if counsel would have been available to that 
     defendant, or if the personal representative of that 
     defendant requests counsel and otherwise qualifies for the 
     appointment of counsel, under section 3006A.
       ``(C) Tolling.--The court shall toll any applicable 
     deadline for the filing of any motion, petition, or appeal 
     during the period beginning on the date of the death of a 
     defendant convicted in a criminal case and ending on the 
     later of--
       ``(i) the date of the appointment of that defendant's 
     personal representative; or
       ``(ii) where applicable, the date of the appointment of 
     counsel for that personal representative.
       ``(D) Restitution.--If restitution has not been fully 
     collected on the date on which a defendant convicted in a 
     criminal case dies--
       ``(i) any amount owed under a restitution order (whether 
     issued before or after the death of that defendant) shall be 
     collectible from any property from which the restitution 
     could have been collected if that defendant had survived, 
     regardless of whether that property is included in the estate 
     of that defendant;
       ``(ii) any restitution protective order in effect on the 
     date of the death of that defendant shall continue in effect 
     unless modified by the court after hearing or pursuant to a 
     motion by the personal representative of that defendant, the 
     Government, or any victim of that defendant's crime; and
       ``(iii) upon motion by the Government or any victim of that 
     defendant's crime, the court shall take any action necessary 
     to preserve the availability of property for restitution 
     under this section.
       ``(e) Forfeiture.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     death of an individual does not affect the Government's 
     ability to seek, or to continue to pursue, civil forfeiture 
     of property as authorized by law.
       ``(2) Tolling of limitations for civil forfeiture.--
     Notwithstanding the expiration of any civil forfeiture 
     statute of limitations or any time limitation set forth in 
     section 983(a) of this title, not later than the later of the 
     time period otherwise authorized by law and 2 years after the 
     date of the death of an individual against whom a criminal 
     indictment alleging forfeiture is pending, the Government may 
     commence civil forfeiture proceedings against any interest in 
     any property alleged to be forfeitable in the indictment of 
     that individual.
       ``(f) Definitions.--In this section--
       ``(1) the term `accepted', relating to a plea of guilty or 
     nolo contendere, means that a court has determined, under 
     rule 11(b) of the Federal Rules of Criminal Procedure, that 
     the plea is voluntary and supported by a factual basis, 
     regardless of whether final acceptance of that plea may have 
     been deferred pending review of a presentence report or 
     otherwise;
       ``(2) the term `announced', relating to a sentence, means 
     that the sentence has been orally stated in open court;
       ``(3) the term `convicted' refers to a defendant--
       ``(A) whose plea of guilty or nolo contendere has been 
     accepted; or
       ``(B) against whom a verdict of guilty has been returned;
       ``(4) the term `direct appeal' means an appeal filed, 
     within the period provided by rule 4(b) of the Federal Rules 
     of Appellate Procedure, from the entry of the judgment or 
     order of restitution, including review by the Supreme Court 
     of the United States; and
       ``(5) the term `returned', relating to a verdict, means 
     that the verdict has been orally stated in open court.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 227 of title 18, United States Code, is amended by 
     adding at the end the following:

``3560. Effect of death of a defendant in Federal criminal 
              proceedings.''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall apply to any criminal 
     case or appeal pending on or after July 1, 2007.

     SEC. 4. SEVERABILITY.

       If any provision of this Act, any amendment made by this 
     Act, or the application of such provision or amendment to any 
     person or circumstance is held to be unconstitutional, the 
     remainder of the provisions of this Act, the amendments made 
     by this Act, and the application of such provisions or 
     amendments to any person or circumstance shall not be 
     affected.
                                 ______