The Seventh Circuit reversed.
“We are mindful that the federal criminal code requires ‘mandatory restitution to victims of certain crimes, 18 U.S.C. 3663A (the Mandatory Victim Restitution Act of 1996, usually referred to as the MVRA), including fraud, see 3663A(c)(1)(A)(ii), but only for ‘an offense resulting in damage to or loss or destruction of property of a victim of the offense.’ 3663A(b)(1). That doesn’t seem to describe the loss suffered by Bank of America as a result of its improvident loans, especially when we consider its complicity in the loss—its reckless decision to make the loans without verifying the solvency of the would-be borrowers, despite the palpable risk involved in, for example, providing mortgage loans to a person who applies for six mortgages in ten days.”
The court continued that:
“Had the bank done any investigating at all, rather than accept at face value obviously questionable claims that the mortgagors were solvent, it would have discovered that none of them could make the required down payments, let alone pay back the mortgages. These people were just fronts for the defendants, who made the down payments required by the bank, pocketed the mortgage loans (which were of course much larger than the down payments) that the bank made, and left it to the nominal mortgagors to default since they hadn’t the resources to repay the bank. All this was transparent.”
Accordingly, the court concluded that Bank of America was not a “victim” for restitution purposes.
The court of appeals, however, did encourage the district court to assess on remand whether the defendants should be fined in an equal amount to the restitution that had been previously ordered.
The case was remanded for resentencing.
