Monday, October 6, 2008

Internal Investigation Costs as Restitution

In United States v. Amato, the Second Circuit held that restitution could be ordered under the mandatory Victims Restitution Act of 1996 for victim's expenses of attorney fees and auditing costs that were a "direct and foreseeable result of the offense."  The court stated:

"Defendants perpetrated a complicated fraud against a large corporation and a number of its clients, as well as the states to which those clients were required to turn over escheated funds. That this fraud would force the corporation to expend large sums of money on its own internal investigation as well as its participation in the government's investigation and prosecution of defendants' offenses is not surprising. There is no doubt that EDS's attorney fees and auditing costs were a direct and foreseeable result of defendants' offenses."

See also Daniel M. Gitner & Brian Jacobs, New York Law Journal, Seeking Restitution for the Costs of Internal Investigation

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2008/10/internal-invest.html

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