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U.S. v. Abramoff: Motion to Change Restitution Terms

U.S. v. Abramoff: Motion to Change Restitution Terms

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Convicted lobbyist Jack Abramoff should not be allowed to use his tax refund of more than $500,000 to pay back his lawyers, accountants and others because he has yet to make restitution for the millions of dollars he defrauded from Indian tribes he represented, the Justice Department says. Abramoff, who has been in prison since 2006, received a $520,189 refund from the IRS on May 4. After his lawyers notified the government, Justice asked a federal judge today to stop Abramoff from paying his bills. A copy of the government's motion to modify the restitution order in place against Abramoff.

Convicted lobbyist Jack Abramoff should not be allowed to use his tax refund of more than $500,000 to pay back his lawyers, accountants and others because he has yet to make restitution for the millions of dollars he defrauded from Indian tribes he represented, the Justice Department says. Abramoff, who has been in prison since 2006, received a $520,189 refund from the IRS on May 4. After his lawyers notified the government, Justice asked a federal judge today to stop Abramoff from paying his bills. A copy of the government's motion to modify the restitution order in place against Abramoff.

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Published by: Washington Post Investigations on May 22, 2009
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UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIAUNITED STATES OF AMERICA:06cr001 (ESH):::v.::JACK A. ABRAMOFF, ::Defendant.:Motion For Immediate Modification of Restitution Order
The United States, by and through its undersigned attorneys, moves the Court toimmediately modify the terms of Mr. Abramoff’s restitution order. Yesterday, the governmentlearned that Mr. Abramoff received a substantial refund from the Internal Revenue Service(“IRS”), a large portion of which he and his spouse spent before informing the government of itsreceipt. For the reasons set forth below, we ask the Court to immediately modify Mr.Abramoff’s restitution order to (1) order Mr. Abramoff and his family to cease spendingwhatever remains from the IRS refund; (2) require Mr. Abramoff to provide an accounting of thepayments he has made; (3) modify the current restitution order to require Mr. Abramoff toprovide immediate notice to the Court of any additional assets or debts he or his immediatefamily receives or incurs which are valued at $2,500 or more; (4) require Mr. Abramoff to obtainCourt approval prior to he or his immediate family spending sums of $2,500 or more.On September 9, 2008, the Court imposed sentence upon Mr. Abramoff, and included inthe sentence an order of restitution. (Docket No. 48-2). The restitution order held Mr. Abramoff liable for losses of $23,134,695, a portion of which was joint and several liability together with
Case 1:06-cr-00001-ESH Document 51 Filed 05/21/2009 Page 1 of 7
 
2Michael Scanlon. In light of Mr. Abramoff’s current and anticipated financial condition, thepayment schedule in the September 2008 order required Mr. Abramoff to begin makingpayments upon his release from prison. (Id. at 2). Further, the judgment required Mr. Abramoff to notify the Court and the government attorney within 30 days of material changes in economiccircumstances. (Docket No. 48-1 at 1).On May 20, 2009, counsel for Mr. Abramoff advised the government that Mr. Abramoff and Mrs. Abramoff had received a refund from the IRS totaling $520,189. Based on what welearned from defense counsel on May 20, it appears that the following occurred. Around May 4,2009, Mr. Abramoff’s wife received the refund check from the IRS. They advise us that, duringthe ensuing two weeks, Mrs. Abramoff allegedly paid the following non-restitution creditors:$104,000 toward accounting expenses owed to Mendelson & Mendelson (Mr.Abramoff’s accounting firm);$87,500 to repay loans from Mr. Abramoff’s father;$75,000 toward legal expenses owed to McDermott, Will & Emery, LLP;$50,000 toward back taxes owed to the State of Maryland;$47,000 toward a credit card balance held by Bank of America;$25,000 toward legal expenses owed to Zuckerman Spaeder, LLP;$22,000 toward property taxes;$5,000 to repay a loan from Michael Herson;$5,000 toward tuition expenses at Hebrew Academy; and$1,500 to repay a loan from the Franco Foundation.
Case 1:06-cr-00001-ESH Document 51 Filed 05/21/2009 Page 2 of 7
 
3Counsel for the United States was aware that Mr. Abramoff had applied to the IRS for arefund, and the IRS was aware of Mr. Abramoff’s restitution obligations. Regardless of whetherthe refund should have been paid to Mr. Abramoff, Mr. Abramoff was required by statute toapply the value of that refund to his restitution obligation, notwithstanding that the money wasreceived while he was in prison and before the payment schedule had taken effect. See 18U.S.C. § 3664(n) (requiring a person to apply the value of any substantial resources which hereceives from any source at any time to his restitution obligation). The restitution order istreated as a tax lien in favor of the United States on all property and rights to property of Mr.Abramoff. 18 U.S.C. § 3613(c). Before the government takes a final position on whether any of the money already paid out should be disgorged so that it could be used to satisfy Mr.Abramoff’s restitution obligations, the parties and the Court would benefit from moreinformation about the nature of these creditors’ interests, how and when the interests arose, whatsteps were taken to perfect these interests, and what portion of the debts were incurred after theCourt’s original restitution order.Accordingly, we respectfully request the Court to (1) order Mr. Abramoff and his familyto cease spending whatever remains from the IRS refund; (2) require Mr. Abramoff to provide anaccounting documenting the nature of the debts paid above, including when they were incurred;(3) modify the current restitution order to require Mr. Abramoff to provide immediate notice tothe Court of any additional assets or obligations he or his immediate family receives or incurswhich are valued at $2,500 or more; (4) require Mr. Abramoff to obtain Court approval prior tohe or his immediate family spending sums of $2,500 or more.
Case 1:06-cr-00001-ESH Document 51 Filed 05/21/2009 Page 3 of 7

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