Supreme Court Forecloses Reimbursement for Certain Internal Investigations Under Mandatory Victims Restitution Act

This article originally appeared in Business Crimes Bulletin. © 2019 ALM Media LLC. Reprinted with permission.

On May 29, 2018, the U.S. Supreme Court ruled in Lagos v. United States, 584 U.S. ___ (2018), that corporate victims of criminal offenses cannot recover expenses incurred from internal investigations that the federal government has neither requested nor required under the Mandatory Victims Restitution Act of 1996, 18 U.S.C. §3663A (MVRA). In its decision, the Court declined to address whether, going forward, such victims can recover costs from internal investigations initiated at the government’s behest under the statute. Prior to this holding, a number of federal courts held that corporate victims were eligible for restitution for the costs incurred from their internal investigations and referrals to law enforcement — regardless of whether the government requested or required such investigations. These courts ordered restitution to reflect these costs on grounds that internal investigations: 1) are a foreseeable result of the crimes enumerated in the MVRA; and 2) provide invaluable assistance to government investigations and proceedings.

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