More than 4,200 defendants convicted in federal court in the Northern District of Texas owe their victims $1 billion, give or take. Which would make U.S. Attorney Richard Roper and his financial litigation unit the biggest debt collector in North Texas, give or take. Among Department of Justice Districts, Northern Texas has one of the highest restitution recovery rates. “We are one of the top,” Roper tells Unfair Park.
From October 2005 to September 2006, the unit collected $28 million in restitution. That figure had jumped to more than $44 million from October 2006 to June 2007, the year with the most recent statistics. And it's mostly white-collar crimes: housing scams, Medicare fraud, ponzi schemes. Why come? Follow the money, but of course: “Except for the New York area," Roper says, "we have more Fortune 500 places here."
His office currently has 60 writs of attachment pending to seize the cash and real property of crooks who held onto their illegal gains. But sometimes, even Roper can’t squeeze dough from deadbeat debtors who have stolen, swindled or skimmed millions of dollars. Federal law prohibits revoking a felon’s probation unless prosecutors can show he had the opportunity and ability to pay and didn’t.
“I prosecuted some of the defendants in the I-30 bank fraud scheme,” says Roper. “It was amazing how these defendants could spend money, living the high life. And when we finally brought them to justice, they’d spent it all, mostly through high living and poor money management. One of the most difficult and heart-wrenching challenges a prosecutor has is trying to obtain restitution from a white-collar fraud defendant who has dissipated all his assets. The tragedy of white-collar fraud is you have victims who will never be made whole.”
Sometimes restitution results from seizures of houses or vehicles used in the commission of a crime, like a drug stash house. Recently seized were several huge diesel trucks with special compartments for drug smuggling.
“If we didn’t do that, then some other drug trafficker could move in,” Roper says. “Sometimes we will use the forfeiture law to seize assets and give it as restitution."
About 2,800 federal felons are now on the rolls to have their tax returns, stimulus payments and 15 percent of their Social Security benefits seized to repay victims.
“There are about 900 we can’t do anything with,” says Roper. “Some of them have absconded.”
And many are dead broke and get menial jobs when they are released from prison.
“If they don’t have the ability to pay, you can’t send them to prison,” says Roper.
But federal judges do have some leverage with folks trying to play shell games with their assets. Take the case of Bernard Dolenz, a former doctor and lawyer who served prison time for Medicare fraud. He was ordered to pay $1.68 million.
The office filed a writ of attachment to Dolenz’s house on Swiss Avenue and, on December 7, 2007, a U.S. marshal and two appraisers entered the home and seized personal property. Included in his non-disclosed assets to be auctioned off: about $100,000 to 200,000 in original Republic of Texas currency, one of the largest collections ever seen; an ivory inlaid bench; a Cadillac and an Italian marble bust of Joan of Arc. Dolenz has appealed the seizure.
Prosecutors attached 15 percent of Dolenz’ Social Security benefits but were unable to locate all the property he had squirreled away. In April, Judge Barbara Lynn ordered Dolenz, who lives in a large house on Swiss Avenue, to serve a day in jail, three more years of probation, and ordered him to disclose his assets.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
“We’ve gotten $81,000 in restitution,” says Roper. “In court we said that we are attempting to force a sale of his house.”
One of the biggest seizures in the district will soon be auctioned off. Johar Saran was convicted of running a large illegal Internet pharmacy operation. Roper says his Arlington mansion goes on the block this summer.
The district’s biggest debtor: Jonathan Nelson, a defendant in the Western District of Texas whose case was handled by Roper’s office. The Lubbock resident was sentenced to 25 years in prison for wire fraud and money laundering millions of dollars he embezzled while he was CFO of an on-shore oil drilling company. Roper thanked the judge for the sentence and said he’d never seen a case “with more greed than that displayed” by Nelson.
“He owes $77 million,” says Roper. “But the chances of obtaining it are slim. He’s essentially a pauper.” --Glenna Whitley