Federal Restitution: How It Works in Federal Sentencing

By Elizabeth Franklin-Best, Esq., and Christopher Zoukis, JD, MBA

A federal sentence is not measured only in months. For many defendants — especially in fraud and other financial cases — the financial side of the sentence is just as consequential and far longer-lasting. Restitution is at the center of that financial side. It is the order requiring a defendant to compensate victims for their losses, and in a large category of cases it is mandatory.

At Elizabeth Franklin-Best, P.C., we treat restitution as a serious part of sentencing — a number to be examined, not simply accepted. Elizabeth Franklin-Best, our principal attorney, is named a 2026 “Best Lawyer” in Appellate Practice by Best Lawyers in America and holds a Chambers USA 2026 ranking for Litigation: White-Collar Crime & Government Investigations — recognition earned in the financial cases where restitution figures are fought hardest. Together with Managing Director Christopher Zoukis, she tests every claimed loss before the court adopts it. Federal restitution is governed primarily by the Mandatory Victims Restitution Act, 18 U.S.C. § 3663A, and the older discretionary provision at 18 U.S.C. § 3663.

This guide explains federal restitution — what it is, when it is mandatory, how the amount is calculated, who counts as a victim, how a restitution order is enforced, and how it can be challenged. If you are facing federal sentencing, restitution deserves the same careful attention as the term of imprisonment.

Quick Answer

Question	Answer
What is federal restitution?	A component of a federal sentence that requires the defendant to compensate victims for the losses caused by the offense.
Is restitution mandatory?	For a broad category of offenses — including crimes of violence and property offenses such as fraud — restitution is mandatory under the MVRA.
Does inability to pay reduce restitution?	No. The defendant’s economic circumstances do not reduce the amount of restitution; they bear only on the payment schedule.
How is restitution different from a fine or forfeiture?	A fine is a penalty paid to the government; restitution is compensation paid to victims; forfeiture is the seizure of property connected to the offense.
Can a restitution order be challenged?	Yes — on causation, victim status, the amount and proof, offsets, and procedural defects.

Key Takeaways

• Restitution requires a defendant to compensate victims for the losses caused by the offense.
• The Mandatory Victims Restitution Act makes restitution mandatory for crimes of violence and property offenses, including fraud.
• The defendant’s inability to pay does not reduce the restitution amount — it bears only on the payment schedule.
• Restitution is owed to victims directly and proximately harmed by the offense; causation is the limit.
• Restitution is generally measured by victims’ actual losses, and the government bears the burden of proving the amount.
• Restitution, Guidelines loss, and forfeiture are three distinct figures calculated under different rules.
• A restitution order functions as a lien, is enforceable like a civil judgment, and endures for many years.
• A restitution order can be challenged on causation, victim status, amount, offsets, and procedure.

What Is Federal Restitution?

Restitution is a component of a federal sentence that requires the defendant to compensate victims for the losses caused by the offense. Its purpose is to make victims whole — to restore, as far as money can, what the offense took from them.

Restitution is distinct from a fine. A fine is a financial penalty paid to the government as punishment; restitution is compensation paid to victims for their losses. Restitution is also distinct from forfeiture, which is the government’s seizure of property connected to the offense. A single sentence can include all three — a fine, restitution, and forfeiture — and each is calculated and ordered separately.

Federal restitution flows from two main statutes. The Mandatory Victims Restitution Act, at 18 U.S.C. § 3663A, makes restitution mandatory for many offenses. The older statute, 18 U.S.C. § 3663, provides for discretionary restitution in other cases. Both are implemented through the procedures of 18 U.S.C. § 3664.

When Restitution Is Mandatory

The Mandatory Victims Restitution Act made restitution mandatory — not discretionary — for a broad category of federal offenses. Under the MVRA, when the statute applies, the court must order restitution; it has no discretion to decline.

The MVRA applies, among other things, to crimes of violence and to offenses against property, including any offense committed by fraud or deceit, where an identifiable victim has suffered a physical injury or a pecuniary loss. This sweeps in the great majority of federal fraud and other financial cases. For those offenses, restitution is a required part of the sentence.

Critically, the MVRA directs the court to order restitution without considering the defendant’s economic circumstances when setting the amount. A defendant’s inability to pay does not reduce the restitution figure — it bears on the payment schedule, as discussed below, but not on the total. This is a hard feature of the law, and it is one reason the calculation of the amount must be examined so carefully.

The MVRA does contain a narrow escape valve. For property and fraud offenses, § 3663A(c)(3) permits the court to decline to order restitution if it finds, on the record, that the number of identifiable victims is so large as to make restitution impracticable, or that resolving complex factual disputes over the cause or amount of losses would complicate or prolong the sentencing to a degree that outweighs the need to provide restitution. Courts invoke it sparingly — but in sprawling schemes with thousands of dispersed victims, it is a provision worth raising.

Who Counts as a Victim

Restitution is owed to “victims,” and the definition of that term matters a great deal — particularly in fraud and scheme cases.

The MVRA defines a victim as a person directly and proximately harmed as a result of the commission of the offense. For an offense that involves a scheme, conspiracy, or pattern of criminal activity as an element, the definition reaches further: it includes any person directly harmed by the defendant’s criminal conduct in the course of that scheme, conspiracy, or pattern.

The words “directly and proximately harmed” are the limit. A loss that is too remote, or that was not proximately caused by the offense conduct, should not generate restitution. In a complex case, identifying exactly who is a victim under the statute — and who is not — is itself a point of litigation, and getting it right can materially affect the total.

Applied Insight: Restitution figures in the presentence report are sometimes assembled quickly, from victim claims that have not been tested for causation. A claimed loss that is real but not proximately caused by the offense of conviction does not belong in the restitution order. Scrutinizing the causal link between the offense and each claimed loss is among the most valuable restitution work a defense team can do.

How the Amount Is Calculated

Restitution is generally measured by the victims’ actual losses caused by the offense. The court orders restitution to each victim in the full amount of that victim’s losses, as the court determines them.

For an offense involving damage to or loss of property, restitution generally requires returning the property or paying its value, offset by the value of any part of the property that was returned. In offenses involving bodily injury, restitution can include the cost of medical and related care, therapy and rehabilitation, and income lost by the victim. Under 18 U.S.C. § 3664(e), the government bears the burden of proving the amount of a victim’s loss by a preponderance of the evidence, and any dispute over the proper amount or type of restitution is resolved by the court under that same standard.

Although restitution and the Guidelines loss figure are related concepts, they are calculated under different rules and are not always the same number. The defense can contest the restitution amount on causation, on the proper offset for value returned, on whether a claimed loss is genuinely attributable to the offense of conviction, and on the sufficiency of the government’s proof. The restitution figure is a determination — and like any determination, it can be wrong.

What Restitution Cannot Cover: Hughey and Lagos

The restitution statutes have boundaries, and the Supreme Court has enforced them in two decisions every defendant facing a large restitution claim should know.

The first boundary is the offense of conviction. In Hughey v. United States, 495 U.S. 411 (1990), the Supreme Court held that restitution is authorized only for losses caused by the specific conduct that forms the basis of the offense of conviction. A defendant who pleads guilty to a single count cannot be ordered to pay for losses flowing from dismissed charges or uncharged conduct. The MVRA’s scheme language softens this limit in fraud cases — when a scheme or conspiracy is an element of the offense, victims harmed in the course of that scheme count — but Hughey still polices the outer edge, and losses untethered to the convicted conduct do not belong in the order.

The second boundary concerns expenses. In Lagos v. United States, 584 U.S. 577 (2018), the Supreme Court held that the words “investigation” and “proceedings” in § 3663A(b)(4) are limited to government investigations and criminal proceedings. They do not reach a victim’s own private investigation or its participation in civil or bankruptcy litigation. A corporate victim that spends millions on internal-investigation counsel and forensic accountants cannot recover those costs through criminal restitution — even if it later hands its findings to prosecutors.

Lagos matters enormously in white-collar cases, where professional fees are often among the largest items a victim claims. When a restitution request includes attorney fees, accounting fees, audit costs, or consultant invoices, the defense should ask the Lagos question first: were these expenses incurred during participation in the government’s investigation or the criminal proceedings, or were they the victim’s own choice? If the latter, they are outside § 3663A(b)(4).

Restitution, Loss, and Forfeiture

Three financial concepts often appear in the same case, and it is important to keep them distinct.

• Guidelines loss. The loss figure under the Sentencing Guidelines drives the offense level. It can be the greater of actual or intended loss and follows the Guidelines’ own definitions.
• Restitution. Restitution compensates victims and is generally measured by actual loss proximately caused by the offense. It is paid to the victims.
• Forfeiture. Forfeiture is the government’s seizure of property connected to the offense — proceeds and, in some cases, instrumentalities. It is paid to the government.

These three numbers can differ, and they are calculated under different standards. A defendant can face a Guidelines loss figure, a restitution order, and a forfeiture judgment in the same case, each separately litigated. Understanding how they relate — and where they should not simply track one another — is part of handling the financial side of a sentence well. One harsh corollary deserves emphasis: paying a forfeiture judgment generally does not reduce the restitution obligation. Because forfeiture goes to the government and restitution to victims, courts in most circuits have refused to offset one against the other — a defendant can be required to pay the same proceeds twice unless the government chooses to remit forfeited funds to the victims.

Restitution and Joint Liability Among Codefendants

When several defendants share responsibility for the same loss, restitution and forfeiture diverge sharply, and the difference can determine how much a particular client ultimately pays. Under the MVRA, the court may apportion restitution among codefendants according to each one’s contribution to the victim’s loss, or it may make them jointly and severally liable under 18 U.S.C. § 3664(h) — meaning each defendant can be ordered to pay the entire amount, with the victim limited only to a single full recovery. Many courts default to joint and several liability, so a peripheral participant can be saddled on paper with the whole loss of a sprawling scheme.

Criminal forfeiture follows the opposite rule. In Honeycutt v. United States, 581 U.S. 443 (2017), the Supreme Court held that forfeiture under 21 U.S.C. § 853 is limited to property the defendant actually acquired, and that codefendants are not jointly and severally liable for proceeds they never personally obtained. The two doctrines therefore pull in different directions: a minor player may escape a large forfeiture judgment under Honeycutt yet still face joint-and-several restitution for the same conduct. Pressing the court to apportion restitution under § 3664(h) — rather than impose it jointly — is often the most effective way to keep a lesser participant’s restitution exposure proportional to his actual role. Our guide to criminal asset forfeiture develops the Honeycutt rule in detail.

Restitution in Child Exploitation Cases: Paroline and the AVAA

Congress created a separate, broader restitution scheme for child exploitation offenses at 18 U.S.C. § 2259, which requires restitution for the full amount of the victim’s losses. Because images circulate among many offenders over many years, the causation question in these cases is unusually difficult, and the Supreme Court addressed it directly.

In Paroline v. United States, 572 U.S. 434 (2014), the Court held that restitution under § 2259 is proper only to the extent the defendant’s own offense proximately caused the victim’s losses. Where it is impossible to trace a particular share of the losses to one individual among thousands of possessors, the sentencing court must set an amount that comports with the defendant’s relative role in the causal process — a reasonable, circumscribed figure, neither nominal nor the victim’s entire aggregate loss. Relevant considerations include whether the defendant distributed or merely possessed the material, any connection to its production, and the number of images involved.

Congress then partially superseded that framework. The Amy, Vicky, and Andy Child Pornography Victim Assistance Act of 2018 (Pub. L. No. 115-299) amended § 2259 to require, for defendants convicted of trafficking in child pornography, restitution that reflects the defendant’s relative role but is no less than $3,000 per victim. The AVAA also created the Child Pornography Victims Reserve, funded by special assessments under § 2259A, from which a victim may instead elect a one-time payment of $35,000, adjusted for inflation.

For the defense, the statutory minimum is the floor, not the answer. The relative-role determination above that floor remains a litigable, fact-specific question under Paroline, and the defense can present evidence bearing on the defendant’s actual causal contribution.

Enforcement and Payment

A restitution order is enforceable, and it is durable. The court sets a payment schedule, and here — unlike the amount — the defendant’s economic circumstances do matter.

In setting the schedule, the court considers the defendant’s financial resources, projected earnings, and obligations. Payment may be ordered immediately, in installments, or over a period of time, and is often collected in part while the defendant is incarcerated and after release while on supervision. A restitution order also functions as a lien and can be enforced like a civil judgment, and it remains enforceable for many years.

Because restitution can follow a person for a very long time, the defense’s work on the payment side matters too — presenting an accurate, complete picture of the defendant’s finances so the schedule the court sets is realistic. An unrealistic schedule helps no one and can set a defendant up for violations.

How Long a Federal Restitution Order Lasts

The durability of a restitution order is written into 18 U.S.C. § 3613, and the numbers deserve attention. Liability to pay restitution terminates on the later of 20 years from the entry of judgment or 20 years after the defendant’s release from imprisonment. A defendant who serves ten years in prison therefore faces what is, in practice, a thirty-year financial obligation. Death does not extinguish it either — the statute makes the defendant’s estate responsible for any unpaid balance.

The order also operates as a lien in favor of the United States on all of the defendant’s property and rights to property, arising on the entry of judgment, treated much like a federal tax lien. The government — typically through the Financial Litigation Program of the U.S. Attorney’s office — can enforce it with the full collection toolkit available for civil judgments, including wage garnishment within the limits of the Consumer Credit Protection Act.

Bankruptcy offers no escape. Section 3613(e) provides that no discharge of debts in a bankruptcy proceeding discharges liability for restitution, and the lien survives bankruptcy as well. What the statute does allow is adjustment of the payment schedule: under § 3664(k), a defendant whose economic circumstances materially change can notify the court, which may adjust the schedule as the interests of justice require. For people rebuilding a life after prison, that adjustment mechanism is often the most practical lever available.

Challenging a Restitution Order

A restitution order is not beyond challenge. Because it rests on determinations of fact and law, it can be contested at sentencing and, in appropriate cases, on appeal.

• Causation. The defense can argue that a claimed loss was not directly and proximately caused by the offense of conviction.
• Victim status. The defense can contest whether a particular claimant qualifies as a victim under the statute.
• Amount and proof. The defense can challenge the sufficiency of the government’s proof of a loss and the calculation of the amount.
• Offsets. The defense can insist that the value of property returned, or amounts already recovered, be properly offset against the order.
• Procedure. The defense can challenge procedural defects in how the restitution order was determined or imposed.

Restitution litigation is detailed, document-intensive work, much like loss litigation in a fraud case. But it is worthwhile work: a restitution order is a long-term obligation, and reducing it — or correcting an error in it — has lasting value for the defendant.

How Our Firm Addresses Restitution

Restitution defense is document work, and we do it ourselves rather than accepting the presentence report’s arithmetic. Our principal attorney, Elizabeth Franklin-Best, has appeared in more than 330 federal proceedings, including over 100 appeals across all twelve federal circuits and the United States Supreme Court, and that appellate vantage shapes how we handle the financial side of a sentence: we contest restitution at the hearing with the record in mind, because an objection that is not preserved is usually an objection that is lost on review. She is the 2026 Best Lawyers in America honoree in Appellate Practice and holds a Chambers USA 2026 ranking in Litigation: White-Collar Crime & Government Investigations — distinctions built in precisely the financial cases where loss and restitution figures are fought line by line.

Our restitution work includes scrutinizing each claimed loss for causation and proximate harm, contesting victim status where a claimant does not qualify, testing the government’s proof of the amount, insisting on proper offsets, presenting an accurate financial picture so the payment schedule is realistic, and preserving restitution issues for appeal. Elizabeth Franklin-Best appears in federal courts across the country through pro hac vice admission, so where a case is venued does not limit who defends it.

Restitution rarely travels alone. Our federal sentencing overview maps the whole framework; our loss calculation guide covers the Guidelines figure that often shadows the restitution number; and our guides to criminal asset forfeiture and sentencing mitigation address the other pieces of the same hearing.

Talk With a Federal Sentencing Lawyer

Restitution can be one of the longest-lasting consequences of a federal conviction. It is mandatory in many cases, but the amount is a determination — and determinations can be tested. Restitution deserves the same careful attention as any other part of a sentence.

We begin every representation with a paid, one-hour initial consultation. We will walk through the loss allegations, identify where the restitution figure can be tested, and lay out a sentencing plan. If a restitution claim is part of your federal case, schedule that hour now — the calculation is being assembled whether or not anyone is checking it.