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One criminal defendant paid $250,000 so a city could buy a new fire truck. A second paid $87,000 for a new emergency warning siren system. Another felon, convicted of securities fraud, paid $500,000 that enabled 48 United Ways and 125 local charities to fund important community needs such as housing, food shelves and job transitions.

These defendants, among others, recently made such payments, known as "extraordinary restitution," in connection with their sentences in federal criminal cases prosecuted in Minnesota.

Extraordinary restitution is a somewhat novel concept in federal criminal law. Indeed, the term "extraordinary restitution" is not found in any particular statute or sentencing guideline. Traditionally, restitution in criminal cases has been ordered paid to specific victims of a defendant's crime. However, in 1996, when Congress enacted the Mandatory Victims Restitution Act, it provided authority for a court to order restitution to people other than victims of the offense, if agreed to by the parties in a plea agreement.

In other words, Congress created a vehicle for courts to impose financial sanctions where specific victims cannot be identified or are too numerous to compensate meaningfully, such as where large groups of people have been cheated or injured.

Although infrequent, awards of extraordinary restitution benefit many Minnesotans. Between 2002 and 2004, in 15 different cases, federal judges in this state allocated more than $9.5 million in such awards to a variety of worthy recipients.

In the first Minnesota case involving extraordinary restitution, three individual defendants and a corporation paid more than $1 million in connection with a public corruption and bank fraud prosecution. As a result, two school districts bought $100,000 in new computer equipment for their students. Cities and counties bought safety equipment, road signs, a new van and equipment for a recreation center, as well as a fire truck and four emergency warning sirens. Both counties put more than $300,000 of the funds into environmental testing, improvements and training involving feedlots, which had been implicated in the criminal conduct.

As a result of recent corporate fraud prosecutions of senior executives of a Twin Cities company, more than $1.5 million has been made available for the promotion of business ethics in Minnesota and beyond. For example, a court awarded $50,000 to act as seed money for the creation of a unique online business ethics resource center at the James J. Hill Reference Library in St. Paul. Other extraordinary restitution funds have been awarded to pay for many different ethics education programs from elementary schools to high schools to business and law schools throughout the state.

Finally, the Minnesota Center for Crime Victim Services has been the recipient of extraordinary restitution on several occasions. The state-funded center provides grants to programs such as battered women's shelters, rape crisis centers and centers for child abuse victims. It also administers the Minnesota Crime Victims Reparations Program, which provides compensation to victims of violent crime and their families for counseling, medical costs and funeral expenses.

Because of recent state budget shortfalls and reduced funding to the center, cuts were looming. However, federal court awards totaling $2 million in extraordinary restitution during the past two years have kept dozens of center-funded programs running and assured sufficient funds for crime victims.

Extraordinary restitution can be awarded only by a judge in the context of a negotiated plea bargain. Further, it cannot be awarded until all other financial sanctions, such as fines and restitution owed to specific victims, have been paid. It arises, therefore, in relatively few cases, where a defendant, after paying all statutory financial penalties, agrees to provide additional funds for particular remedial or societal purposes connected to the offense.

Motivation

Why would a defendant agree to pay extraordinary restitution if not required under the law? The reasons or motives vary. For some, it arises from genuine remorse and a desire to make amends for their misconduct. Others have more practical reasons.

In securities fraud cases, for example, defendants often seek a global resolution of all potential criminal and civil financial sanctions for their unlawful conduct. At times the payment of extraordinary restitution can properly substitute for disgorgement of illegal stock profits that cannot be easily returned to specific victims. In certain environmental cases, a corporation's payment of extraordinary restitution can be used to address or remedy the hazardous practices that gave rise to the law violation, which has many obvious corporate benefits from a safety, compliance and public relations standpoint.

A few critics question whether the payment of extraordinary restitution unfairly allows a wealthy defendant to avoid or reduce imprisonment in exchange for making additional payments. While the risks associated with this perception are always present, in the district of Minnesota, the U.S. attorney's office has never traded jail time for the payment of extraordinary restitution. Prosecutors follow established procedures to prevent such a result.

First, prosecutors decide the appropriate charge or charges and whether and how much imprisonment will be sought before a defendant's counsel is even approached about the possibility of paying extraordinary restitution. It is then clearly communicated by the prosecutor that no quid pro quo exists between the issue of imprisonment and the payment of extraordinary restitution.

Second, prosecutors inform each defendant's attorney that the initial decision whether to pay extraordinary restitution rests with the defendant and that the ultimate decision to award extraordinary restitution is up to the court. On a case-by-case basis, a federal judge then decides whether extraordinary restitution is appropriate and to whom it should be awarded and in what amounts.

In sum, extraordinary restitution is an uncommon remedy but one that holds much promise for those who believe that justice can be achieved through restorative and positive measures as well as through punishment.