Key Points

  • A restitution payment schedule without 'due immediately' language sets both a floor and a ceiling on what the government can collect while the defendant remains in compliance.
  • The government's power to enforce a restitution order is limited to the terms the sentencing court set; prosecutors cannot unilaterally collect beyond the payment schedule.
  • Victims and prosecutors who want maximum collection flexibility must ensure the judgment includes 'due immediately' language or object at sentencing.
  • The MVRA's provision allowing enforcement 'notwithstanding any other Federal law' defines what property is reachable, not what amounts can be collected beyond the judgment's terms.
  • Modification of payment terms, forfeiture actions, and state-law liens remain available avenues when a payment schedule constrains direct collection.

Victims of a $364 million Ponzi-like fraud cannot force a convicted defendant to surrender millions in retirement and insurance assets when the sentencing judge set a payment schedule without making restitution due immediately, the Second Circuit held Monday, rejecting a Crime Victims' Rights Act mandamus petition.

A three-judge panel unanimously denied the petition brought by IIG Structured Trade Finance Fund, Ltd., IIG Global Trade Finance Fund Ltd., Girobank, N.V., and Girobank International, N.V., ruling that the government and victims were bound by the installment terms Judge Alvin K. Hellerstein of the Southern District of New York imposed at sentencing. The decision, written by Judge Joseph F. Bianco and joined by Judges Steven Menashi and Debra Ann Livingston Kahn, aligns the Second Circuit with the Tenth and Fifth Circuits on a question that splits how aggressively the government can collect on criminal restitution orders.

Martin Silver, a co-founder and chief operating officer of registered investment advisor International Investment Group, LLC, pleaded guilty to conspiracy to commit wire fraud, securities fraud, and investment advisor fraud for his role in a scheme that ran from 2007 to 2019. On February 8, 2023, Judge Hellerstein sentenced Silver to 13 months' imprisonment and ordered $364,402,116.08 in restitution, specifying that Silver would pay $40,000 by February 28, 2023, with the balance payable at 10% of his monthly net income starting on the first day of supervised release. The judgment contained no language making the full amount due immediately.

That omission proved decisive. When Silver was released, his meager income meant restitution payments of only $100 per month, while his assets — including a Vanguard IRA and stock holdings — had appreciated to about $5.1 million. The government and victims moved for a turnover order. Judge Hellerstein granted it only in part, ordering Silver to liquidate and pay the $1.5 million in appreciation but refusing to order turnover of the underlying principal.

The victims petitioned for mandamus, arguing the district court should have ordered turnover of all the assets. The Second Circuit disagreed, holding that the Mandatory Victims Restitution Act cabins the government's enforcement power to the terms the sentencing court sets. The MVRA creates a default presumption that restitution must be paid immediately, the court noted, but that presumption applies only "unless, in the interest of justice, the court provides for payment . . . in installments."

"The government has statutory authority to enforce only the terms of a restitution order, not to take an enforcement action that would exceed a restitution order's payment terms," Judge Bianco wrote, quoting the Tenth Circuit's 2015 decision in United States v. Martinez.

The court aligned with sister circuits that have drawn a "crucial distinction" between judgments that set only a payment schedule and those that specify the full amount is due at once while also establishing backup installments. "When a restitution order specifies an installment plan, unless there is language directing that the funds are also immediately due, the government cannot attempt to enforce the judgment beyond its plain terms absent a modification of the restitution order or default on the payment plan," Judge Bianco wrote, quoting the Fifth Circuit's 2019 decision in United States v. Hughes.

The victims argued that 18 U.S.C. Section 3613(a), which allows enforcement "notwithstanding any other Federal law," gave prosecutors independent authority to collect regardless of the payment schedule. The panel rejected that reading. "For Petitioners' argument to work, Section 3613(a) would need to enable the government to collect a full amount of restitution notwithstanding a payment plan contained in the judgment," Judge Bianco wrote. "But it does not provide that, and it is not our role to rewrite the statute."

The court acknowledged policy arguments and legislative history suggesting Congress wanted aggressive restitution enforcement, but held that such considerations "cannot overcome the force of the plain text."

The panel distinguished the Second Circuit's 2021 summary order in United States v. O'Brien, which affirmed collection beyond a payment schedule. That judgment ordered the defendant to pay "at least" $500 per month, and the plea agreement explicitly preserved the government's collection rights. Neither limiting language nor any comparable plea term existed here.

The opinion noted victims are not without recourse. After the turnover motion was denied, the government moved to forfeit the retirement and insurance assets as substitute property; Silver ultimately settled, agreeing to pay $600,000 over six years. The government also reached a settlement with Suzanne Silver, the defendant's ex-wife, over properties allegedly received through fraudulent transfers. The court noted the victim entities had obtained abstracts of judgment but had not yet recorded them under New York requirements, which would create liens on Silver's property.

The decision carries practical implications for sentencing and collection. Defense counsel who secure payment schedules without "due immediately" language obtain a ceiling on near-term collection, even when the defendant holds substantial assets. Prosecutors and victims who want maximum collection flexibility must ensure the sentencing judgment contains immediate-payment language — or object at sentencing if it does not.

Stephen B. Selbst of Herrick, Feinstein LLP represented the IIG entities. Constance M. Boland of Thompson Hine LLP represented the Girobank entities. Paul A. Batista of Paul Batista, P.C. represented Silver.

The case is In re: IIG Structured Trade Finance Fund, Ltd., No. 25-2577, in the U.S. Court of Appeals for the Second Circuit.