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Federal court rules criminal restitution payments cannot be made to third parties

[JURIST] The US Court of Appeals for the Eighth Circuit [official website] ruled [PDF opinion] Friday that criminal courts have no authority to direct restitution payments [backgrounder] to anyone other than a victim. The issue came before the court in a case where the defendant was ordered to make scheduled restitution payments to a victim and had a lien placed against her house in accordance with the Mandatory Restitution Act of 1996 [PDF text]. A lower court found it was improper for the defendant and victim to agree to lower the amount due, and ordered some of the money already paid to be returned to equity in the house. Reversing that order, the Eighth Circuit held that the lower court lacked the authority to distribute fees already collected to anyone other than the victim. The court indicated that the defendant may have a cause of action against the victim for the invalid agreement.

The US Supreme Court ruled on another example of overreaching when managing repayment plans in 2006. In Arkansas Department of Human Services v. Ahlborn [Duke Law case backgrounder] the Court held that federal laws governing Medicaid [HHS materials] do not authorize a state agency to assert a lien on a Medicaid recipient's personal injury settlement in an amount equal to the amount of benefits paid on the recipient's behalf when a lesser amount has been designated as compensation for medical care. Last week it was announced that Bristol-Myers Squibb Co. will pay the state of Iowa [McClatchy report] nearly a million dollars in restitution for Medicare payments as part of a settlement stemming from allegations of fraud.

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