Everyone’s a Victim, The Sequel

An email came in late yesterday from Alan Tannenbaum, the attorney representing the borrowers who sought victim status in the prosecution of Phillip Coon.  Attached was discussed earlier, this was the latest effort by the Victims Rights militia to get a third table in the well.  They had been rebuffed by the Magistrate Judge.  They had been rebuffed by the District Court Judge.  But third times the charm, and they finally obtained the love they sought from the 11th Circuit, in a 2-1 decision.  Mandamus granted.  Oy.

Upon reading the offending decision, I immediately cruised over to the Volokh Conspiracy to see whether Paul Cassell was gloating.  Indeed he was, as he was fully entitled to do having finally persuaded two out of five judges to conclude that the earth was flat.  It’s not easy to do, you know.

In a ruling released today, the Eleventh Circuit held that borrowers were protected “victims” under the Crime Victims Rights Act (CVRA) because they suffered financial harms because the became legally obligated to pay the point that Coon skimmed off the loan and had to pay interest on the point. The Eleventh Circuit stated: “The CVRA does not limit the class of crime victims to those whose identity constitutes an element of the offense or who happen to be identified in the charging document. . . . Under the plain language of the statute, a party may qualify as a victim, even though [he] may not have been the target of the crime, as long as [he] suffers harm as a result of the crime’s commission.”

This pretty much captures the depth of rationale of the decision.  Of course, that’s the problem.  The CVRA doesn’t require that the victim be named in the charge, but it does require that the victim be a person “directly and proximately harmed.”  18 USC 3771(e).  Well, that’s a problem, since there is no rationale by which the Coast Bank borrowers can show this.  After all, they agreed to pay the points on the mortgage, accepted the deal, and by definition believed that this was a satisfactory deal or they would not have completed their purchase.  Where the points go afterward has nothing to do with the borrowers.

So how does the 11th Circuit explain away this little detail?  The conclusory statement trick:  “On the face it, petitioners were victims.”  Well then, that’s that.  They are victims because they are victims.  Welcome to Sophistry 101.  If we call a cow a horse, feel free to milk it.

But then, does it really matter that this group of borrowers is now entitled to have an active role in the criminal prosecution of Phillip Coon? According to Cassell:

The ruling is an important victory for crime victims. It means that all those who have been harmed by a financial crime are entitled to be protected in the federal criminal justice system. As a result, all such victims will be entitled to confer with the prosecutor on the charges, to obtain restitution for the crime, and to make a statement at sentencing about the proper punishment for the crime.

In fact, it means much more than that.  It means that they are entitled to oppose plea agreements, sit through trial testimony in advance of taking the stand, and to have legal standing to intervene in the prosecution when things don’t go their way.

Whether it means that “all those . . . harmed by a financial crime” will be given standing as “victims” under the CVRA has yet to be seen.  Some circuits disagree with others.  But given the wealth of financial crimes these days, the implications of this misbegotten decision on the integrity of the criminal justice system could be huge and devastating.  If you thought that courts gave short shrift to the defendants’ constitutional rights before, just wait until the victims get their turn.

But as much as I abhor this decision, I congratulate Alan Tannenbaum, who prevailed in this case and believes that his efforts serve the greater good.  Disagree though I might, I respect his effort and integrity.  I just wish he would have lost.

6 thoughts on “Everyone’s a Victim, The Sequel

  1. alan tannenbaum


    If it provides you any solace, many of our clients are from the NY area who were pitched the deal through their real estate investment clubs and investment advisors. If we are able to secure restitution, think of it as money flowing from Florida back up to NY.

  2. SHG

    That’s something, but it you could just convince them to commit a nice, harmless crime, then we’re talkiing. 

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