Yesterday Ifiled a mandamus petition in the Eleventh Circuit, asking that borrowers who were overcharged on loans be recognized as "crime victims" under the federal Crime Victims' Rights Act. The petition seeks restitution and other rights in the criminal justice process. The petition challenges a ruling by U.S. District Judge Elizabeth A. Kovachevich of the Middle District of Florida on November 21, 2008, that borrowers on loans from Coast Bank were not "crime victims" of Phillip Coon's criminal conspiracy because they were not specifically listed in the criminal charges against him. The petition contends that, because the borrowers suffered financial losses from the fraud, they are "victims" entitled to the protections of the federal Crime Victim's Rights Act. The petition could produce the first appellate court decision deciding who is a "victim" under the law. The petition has important implications for the protection of victims' rights in the prosecution of federal financial crimes.

The borrowers' petition arises out of a plan by Coon to "skim points" off of residential mortgage loans in Florida from 2004--07. On November 5, 2008, Coon pled guilty to the scheme in U.S. District Court in Tampa. A group of 112 borrowers of these loans then filed a motion with Judge Kovachevich to be recognized as "victims" of his crime of conspiracy because they had to pay extra on their mortgages because of the crime. Judge Kovachevich denied the motion because the government's charges only specifically listed Coast Bank, Coon's employer, as the victim of the crime.


In the petition filed yesterday, I explain that the borrowers suffered financial harms because they became legally obligated to pay the point that Coon skimmed off the loan and had to pay interest on the point. The petition cites documents showing that Coon received more than $1.1 million from his crime, which he used to buy overseas vacations, fine wine, expensive jewelry, a $20,000 piano, and other luxury items. The petition states that "while Coon was enjoying the high life on his ill-gotten gains, the borrowers were all paying interest on the money financing it." The petition seeks restitution for the borrowers.



This could be a nationally significant case that will set the precedent for whether people who harmed by financial crimes have rights in the process. In my view, the borrowers here lost real money as a result of Coon's crime -- they should have their rights as crime victims respected.


 
The borrowers' other attorney, Alan Tannenbaum of the Sarasota, Florida, law firm of Levin Tannenbaum, explained in a statement released yesterday that "These borrowers lost tremendous amounts of money because of Coon's scheme. They deserve restitution for the high-life Coon was enjoying." Also quoted in the statement was Shane Smith, an attorney for the borrowers with Levin Tannenbaum, who noted that the borrowers rights stem from the Crime Victim's Rights Act, a law passed by Congress in 2004 to protect crime victims in federal cases.


 
The National Crime Victims Law Institute, based at the Lewis and Clark Law School in Portland, Oregon, has taken an interest in the case. NCVLI is expected to file shortly a "friend of the court" brief in support of the victims. The brief will argue that crime victims should be able to receive the same access to the appellate court as criminal defendants and other litigants. NCVLI Executive Director Meg Garvin, Esq stated: "NCVLI hope to establish in this case the same rights for crime victims in the appellate process that all other Americans receive in appellate courts." 
 The petition asks for a decision from the Eleventh Circuit by December 16, 2008. A copy of the petition can be found here.

Today the U.S. Court of Appeals for the Eleventh Circuit agreed with my argument that anyone who is injured as the result of a financial fraud is a "crime victim" protected by the Federal Crime Victims' Rights Act. The ruling, found here, could have major implications for the prosecution of financial fraud crimes in the future and will significantly expand restitution available for those crimes.

A bit of background: On December 2, 2008, Sarasota, Florida Attorney Alan E. Tannenbaum and I filed an emergency petition on behalf of Janis W. Stewart and 111 victims of a financial fraud committed by Philip William Coon. The petition challenged a ruling by U.S. District Judge Elizabeth A. Kovachevich on November 21, 2008, that these borrowers on loans from Coast Bank were not "crime victims" of Coon's criminal conspiracy because they were not specifically listed in the criminal charges against him. The petition contended that, because the borrowers suffered financial losses from the fraud, they were "crime victims" entitled to the protections of the federal Crime Victim's Rights Act, including the right to restitution. The petition cited documents showing that Coon received more than $1.1 million from his crime, which he used to buy overseas vacations, fine wine, expensive jewelry, a $20,000 piano, and other luxury items. The petition stated that "while Coon was enjoying the high life on his ill-gotten gains, the borrowers were all paying interest on the money financing it." The petition sought restitution for the borrowers.

The borrowers' petition arose out of scheme by Coon to "skim points" off of residential mortgage loans. On November 5, 2008, Coon pled guilty to the scheme in U.S. District Court in Tampa. One hundred and twelve borrowers of these loans then filed a motion with Judge Kovachevich to be recognized as "victims" of his crime of conspiracy because they had to pay extra on their mortgages because of the crime. Judge Kovachevich denied the motion because the government's charges only specifically listed Coast Bank, Coon's employer, as the victim of the crime.

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."

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.

My co-counsel, Alan Tannebaum, has laid out the next steps in the case: "We intend to go back into district court and seek restitution for the victims who have been harmed by this crime. The defendant lived the high life through this crime, and the victims should not be left bearing the financial burden."