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Defendant’s death wipes out restitution order

The U.S. government will have to refund the restitution money it collected from a defendant who died while his conviction was on appeal, the 4th U.S. Circuit Court of Appeals has ruled in an unpublished decision. The court found that the 4th Circuit’s rule regarding abatement of restitution orders in such cases was no longer good law in light of a ruling handed down by the U.S. Supreme Court last year.

Dr. Paramjit Ajrawat was convicted of health care fraud, wire fraud, and aggravated identity theft in a Maryland federal court in 2016. The court sentenced him to prison and ordered him to pay more than $3 million in restitution. Ajrawat filed an appeal challenging these convictions but died in November 2017 while those appeals were pending. An administrator appointed to handle his estate moved to abate Ajrawat’s conviction and sentence, including the orders of restitution and forfeiture.

If a defendant dies while his criminal conviction is on appeal, the underlying conviction is extinguished. The 4th Circuit had ruled in its 1984 decision in U.S. v. Dudley, however, that restitution orders primarily serve to compensate victims, rather than punish defendants, and thus did not abate with a defendant’s death. Prosecutors thus asked the appeals court to deny the estate’s motion.

But the estate argued that Dudley was no longer good law in light of the U.S. Supreme Court’s decision last year in Nelson v. Colorado, ruling that a state is obligated to return any restitution taken from a defendant when a conviction is invalidated on appeal and no retrial will occur. That case involved a conviction overturned due to error rather than a deceased defendant, but the estate argued that the reasoning should be the same in either situation.

In a June 20 decision, a court of appeals panel unanimously agreed and ordered that any money already collected from Ajrawat must be refunded. The court said that once a conviction is vacated, it is as if the defendant had never been indicted or convicted, regardless of the reason why the conviction has been vacated. It noted that the 2nd Circuit had reached the same conclusion in a similar case later last year.

“Whether restitution is compensatory rather than in the nature of punishment is irrelevant to this inquiry when the conviction underlying the order of restitution has abated,” the court said in a per curiam opinion. “In light of Nelson, we can no longer say that an order of restitution is an exception to this rule; to the extent Dudley conflicts with Nelson in this regard, it is no longer good law.”

Elliot Abrams of Cheshire Parker in Raleigh represented Ajrawat. Abrams said that he was pleased that the 4th Circuit chose to re-examine its precedent regarding financial criminal penalties in light of Nelson.

“This ruling recognizes the primacy of the presumption of innocence in our criminal justice system, and we appreciate the court’s careful consideration of this important issue,” Abrams said.

It is somewhat unusual for the court to overturn longstanding precedent in an unpublished opinion. Abrams said that the decision to do so suggested that the court agreed that the result in the case was compelled by a straightforward application of the Supreme Court’s reasoning in Nelson.

Follow David Donovan on Twitter @NCLWDonovan

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