Criminal Defendant Required to Make Restitution Cannot Dictate the Sequence in Which Victims Are Paid, and Cannot Seek to Extinguish Restitution Obligation if Victim(s) Cannot be Located

State v. Walker, ___ N.J. Super. ___ (App. Div. 2024). Judge Chase, the author of this opinion, aptly summarized the issue and the result in his opening paragraph. “The question before us on appeal is whether, in the context of a criminal case, a defendant has the right to direct the sequence in which victims receive restitution payments and if restitution can be extinguished when a victim has not been located. Cancelling out restitution would run counter to the remunerative, rehabilitative, deterrence, and punitive goals of restitution, allow a defendant to keep the fruits of their offense, and deprive victims of compensation for the losses suffered. As such, we conclude a defendant cannot control in which order his victims get paid, and restitution should not be extinguished when a victim has not been located.”

Indicted for a number of offenses arising out of defendant’s misappropriation of health care premiums from his company’s employees instead of paying over those premiums to the health insurer, defendant pled guilty to third-degree theft by illegal retention and third-degree misappropriation of entrusted property. A plea agreement approved by the court provided that defendant would pay the 101 victims of his wrongdoing a total of $72,471.35 over a period of five years in equal installments. After his probation ended, defendant had paid only $27,746, leaving $45,595.35 still to be paid.

Instead of paying what he owed, defendant sought to discover who was owed how much, and to reduce his obligation by writing off amounts due to persons who had not been located. He proposed to contact victims essentially in order to try to re-negotiate individually what he owed to them. He filed a motion for post-conviction relief to that effect. The Law Division denied that motion, and the Appellate Division, applying de novo review, affirmed.

Both the Law Division and the Appellate Division held that the motion was barred for procedural reasons, including untimeliness and defendant’s failure to serve the Probation Department with his motion. But the real import of this decision, and likely the reason for its approval for publication, was the impropriety of the relief that defendant sought. Judge Chase emphatically rejected defendant’s position:

“Defendant cites no authority to support his request to reduce the amount of restitution he agreed to pay because some of the scores of victims he defrauded have yet to be located. We do not give our imprimatur to defendant’s proposal to reach out directly to victims to essentially renegotiate individual restitution settlements with them. [Footnote omitted]. Criminal courts should not facilitate, much less authorize, contact between convicted offenders and their victims except through the probation department or the prosecutor’s office victim advocate. Importantly, moreover, we deem a private settlement agreement to extinguish or reduce a restitution award to be contrary to public policy.”

That was because the purposes of restitution include rehabilitative, deterrence, and punitive goals, not just repayment to victims. “To extinguish defendant’s obligation to pay the full restitution would unjustly reward defendant for his failure to timely pay the full restitution amount within his negotiated five years. Having failed to comply with the agreed-upon payment scheduled negotiated with the prosecutor, defendant is hard pressed to seek to renegotiate his restitution exposure with individual victims. Moreover, his proposal would allow him to keep the fruits of his offense and deprive his victims of compensation for the losses suffered because of his crime.” All that would have defeated the multiple purposes of the restitution agreement.