US Federal Prosecutors Have Become To Power

The New York Times earlier this year wrote Prosecutors’ Overreaching Goes Unchecked which talked about how US Attorney’s have become to power. The article had this to say,

Prosecutors are the most powerful officials in the criminal justice system.  They decide whether criminal charges should be brought and what those charges should be, and they exercise almost boundless discretion in making those crucial decisions.  Prosecutors alone decide whether to offer the defendant the option of pleading guilty to reduced charges. When one considers the fact that more than 95 percent of all criminal cases are resolved with guilty pleas, it is very clear that prosecutors control the criminal justice system through their charging and plea bargaining powers.

This is completely accurate, The right to jury trial has become virtually obsolete. You are punished now if use your constitutional right to trial, they stack so many charges against you, if you lose your case you receive the maximum a sentence typically 4-5 times longer than what one would receive with a plea deal,  This is why everyone is taking a plea deal, including the innocent.

Equally problematic is the fact that the charging and plea bargaining decisions are made behind closed doors, and prosecutors are not required to justify or explain these decisions to anyone.  If a prosecutor treats two similarly situated defendants differently — charging one but not the other or offering a better plea offer to one — it is almost impossible to challenge such differential treatment.  The lack of transparency in the prosecution function also leads to misconduct, like the failure to turn over exculpatory evidence — a common occurrence made famous by the prosecutors in the Duke lacrosse and Senator Ted Stevens cases.

There is no longer accountability anymore for Federal Prosecutors, these people have become so powerful no one dares challenge them.

Federal judges, most of which are former federal prosecutors, allow the prosecution of Americans for crimes that the defendants did not know were crimes, crimes that never before existed until the federal prosecutor brought the charge.  The invention of crimes by prosecutors violates every known legal principle of our law.  Yet, this is becoming a commonplace in the federal justice system.

The worst thing about Federal Prosecutors is their appointment by the president to their position is not a career position, once they are appointed as a Federal Prosecutor their goal becomes to  build name recognition for their own future gain. Being a federal prosecutors is a stepping stone to political positions or to corporate law firms where they can make seven figure incomes. This gives them every incentive to be the best at what they do, they no longer care about innocence nor quilt, they only care about advancing themselves for their own future gain at the expense of peoples liberty and freedom.

It might surprise a lot of people to point out how many of our governors, senators, and congressman are former Federal Prosecutors. Their political ads were all the same, they all said how great of a conviction rate they had, how they were hard on criminals, and served justice.

Paying Student Loans While In Federal Prison

This is a common question we hear, “How am I suppose to pay my student loans while in prison?”. Going to prison does not release you from your obligation to paying back your student loans, therefore it’s very import to handle your student loans while your in prison, you don’t want to leave prison and find your student loans in default, your credit destroyed , and owing tens of thousands more with interest and penlites.

Things To Do Before You Go to Prison

1. Call your student loan provider and explain your situation and place your loans in deferment before you go to prison if you can. This will stop your student loans payments and interest for one year. This will give you a year before you have to reapply and to plan.

2. Give Power Of Attorney to someone you trust to handle all your student loans while your away. This will be easier for you since someone on the outside can actually call and talk with your student loan handler and submit all the paper work for you.

3. If you can’t give Power Of Attorney to someone, then print out all necessarily deferment, forbearance, or Income Based Repayment paper work, addresses, phone numbers, and give them to someone to mail to you once you are in prison. This is a very important step, once your inside if can be very hard to get the paper work since you will not be allowed internet access and if don’t know your student loan providers address or phone number you’ll have no way to contact them for help. Case Managers in prison are not always helpful and sometimes will refuse to locate these forms or addresses for you, this is why you should of plan ahead.

Government Backed Student Loans

If your loans are government backed such as:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans made to graduate or professional students
  • Direct Consolidation Loans without underlying PLUS loans made to parents
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans

If your loans are any of the above you have a few options.

First you will need to go to your prison case manager and request a proof of incarceration paperwork. This is a Federal Bureau of Prison letter stating you are incarcerated in a federal prison and how long your sentence is. Once you have this letter if will be easier to do the following:

1. Deferment your loans – This will allows you to temporarily postpone your student loan payments for a few years.

2. Forbearance – With forbearance you can stop making payments for up to 12 months, but interest will continue to accumulate.

3. The Income Based Repayment Program (IBR) is a popular program prisoners are starting to do.   To qualify for IBR, you must prove financial hardship, and being incarcerated in prison with no income is enough proof to qualify.

If you have a family member on the outside who you have given power of attorney to, they can submit all the required paper work for one of above options and keep you from going into default. If your had the forms ready in advance and someone mailed them to you make copies of the originals so you can use the forms over and over again if you need it.

If you don’t have someone on the outside who can help, I recommend you talk to your case manager at the prison and ask for them to get the required forms off the internet so you can fill them out and mail them to your student loan provider along with the proof of incarceration paperwork. You will also be required to submit the paperwork every year to your student loan provider.

Private Student Loans

People in prison who have private loans have few options, you can do only the following:

1. Deferment your loans – This will allows you to temporarily postpone your student loan payments for a few years.

2. Forbearance – With forbearance you can stop making payments for up to 12 months, but interest will continue to accumulate.

You will still need the proof of incarceration paperwork from your case manager to apply for any of the above options. After you maxed out those options and you’re still in prison expect your loans to go into default and for penalties and interest to be added over the remainder of your sentence. Sallie Mae for example is very unsympathetic for people to people who owe them money while they are in prison. Various people have reported Sallie Mae conveniently loses paper work from prisoners since they know that there is very little they can do while they are incarcerated.

If you have a story to share about your student loans while you were in prison please use the contact page and send us your story.

Federal Restitution Explained

Federal Restitution is a confusing thing for most people and there is not much information to explain it. Many people have large amounts of restitution that you are being ordered to pay and realistically they can never pay it back. The government knows you can’t pay it back, but they will try their hardest to get as much as they can. The Mandatory Restitution Act of 1996 established procedures for determining the amount of restitution to which a victim may be entitled, and if there was loses, it requires a sentencing court to impose restitution in the full amount of the victim’s losses, without regard to the defendant’s ability to pay.

There is obviously a concern over the size of uncollected federal restitution, estimated as roughly $46 billion. Much of federal restitution is uncollectible due to the fact that the defendants are indigent

That is the major issue with restitution, once someone has been convicted of a crime and have a criminal record their earning potential is greatly diminished, and just affording daily living expenses becomes a challenge for most people with a criminal record, additionally, on top of that, they are expected to pay a percentage of their income to the government.

When you are sentenced and the judge sets a restitution for you, they may set some repayment options for you.

  1. They could add interest to the restitution while you are paying it back.
  2. They can set the amount allowed to be collected, for example, 10% of your gross pay is a popular one judges have set.
  3. They could order a set amount such as $200-$1000 a month
  4. Or the court leaves it up to probation to decide your repayment amount/plan.

Paying Restitution After Sentencing

The 5th Amendment says that they can deprive you of your property without due process. As soon as you are found guilty and restitution is ordered, your property can be taken. Depending on the amount you owe, victims involved, and how bad they want their money, they may move in fast. Expect anything to be taken: home, cars, bank accounts, other assets. Remember anything that has value can be taken to pay towards your restitution.

Paying Restitution While In Prison

This surprises a lot of people but they will can start collecting restitution from you while you are in prison. How much depends on a few factors, such as how much you make at your prison job and how much you receive in your commissary account from people on the outside. The minimum they can start people paying is $25 every three months, but if you receive too much commissary funds or your pay grade from your job goes up, they will raise how much you have to pay. I’ve heard of some people having to pay $150 a month while they are in prison.

Paying Restitution While On Supervised Release

Once you are on supervised release you must pay restitution. You will be asked to fill out a number of forms disclosing assets, income (including income from spouse and dependents living with you), bank accounts, retirement account, etc. Word of advice, don’t lie on these forms, you don t want to go back to prison for hiding assets. If the judge sets up a payment plan at your sentencing, probation will follow what the judge ordered; probation can’t order you to pay more. If the probation officer tries to collect more, you need to remind them the judge setup a payment plan. Don’t expect to receive any tax refunds either, the IRS most likely will have you flagged in their system to intercept your refund for payment towards your restitution.

However, if the judge did not setup a payment plan for you, probation will decide your payments for you. This can get tricky for people real fast, depending on what type of probation officer you have and your income; you may have to make payments from $100 – $1000. If you are having financial issues contact your probation officer immediately and tell them so they can work out a better payment plan. If probation doesn’t budge on reducing payments, and you are having serious financial issues, then send anything you can afford to send, since it will be harder for them to argue to a judge to violate your probation for not paying the full amount. Sending something (anything) makes a different statement then sending zero.

Paying Restitution When Supervised Release Ends

A common question I hear is, “What happens when I’m off supervised release? Do I still owe restitution?”. When you finish your supervised release this does not release you from restitution liability; your restitution will be transferred and supervised by the Federal Litigation Unit (FLU) for the next twenty years, and they can renew it for another 20 years after that. YOU CAN NOT GO BACK TO PRISON once you are off supervised release if you attempt to avoid pay your restitution. When you are off supervised release your restitution will become a civil matter. The FLU will send you financial income reports to fill out. It’s up to you if you want to fill them out or not, these income reports are voluntary but if not furnished the US DOJ may seek disclosure through other means.

The FLU is seriously behind on collecting restitution at this time (some people do not hear from them for years). One source had this to say about the Federal Litigation Unit on collections:

The Federal Litigation Unit rates the cases on a scale from 1-4. 1 cases are the priority cases. 4 cases are not given a second glance. Cases are revisited every four years. They simply do not have the time, money or other resources to pursue every one. They are not going to reprosecute you, put out a warrant for your arrest or put you back in prison. They are a joke. If you left the country owing restitution, enjoy your time. They are not going to come looking for you.

The FLU can do the following to collect the restitution:

  • Garnish your paycheck up to what your state allows for garnishment, 15% is common.
  • Take your federal tax return refund (if any).
  • Place liens on your home and land.
  • Seize your assets.
  • Take your 401K, IRA, Roth IRA, investment, and retirement accounts.
  • Take part of your social security check.
  • Empty your bank accounts.
  • Take an Inheritance that a deceased family member has left to you.
  • Your pension once you start receiving it.
  • Much more.

The FLU however will not let you starve, they will leave you enough to live off of. Just remember when your restitution is under the FLU’s control you have rights too, consult an accountant and/or lawyer when you want to protect yourself and know your rights.

Common Federal Restitution questions

Question – Can I discharge my federal restitution by declaring bankruptcy?

Answer – Federal Restitution can not be discharged with bankruptcy. There have been a few rare occasions that it has been allowed because the individual who owed it was severely disabled and could not work and paying back restitution would put economic hardship on their family.

Question – Can I get a mortgage to buy a house if I owe restitution?

Answer – Every mortgage application I have reviewed has a Declarations section that ask the following, “Are there any outstanding judgements against you?”. This applies to restitution too and mortgage loan fraud is any misstatement, misrepresentation, or omission made by someone trying to get a loan which is relied upon by a lender, so don’t try hiding it.  All mortgage companies and banks I’ve talked to require anyone who has a judgement against them to satisfy the judgment before they’ll give anyone a mortgage. They do this because they know the chances of a lien being placed against the home will occur and most people are likely to stop paying the mortgage.

Question – The company I owed federal restitution went out of business, do I still owe the money?

Answer – This is a really tricky one that could have a few answers. Here is the best answer I found,

It depends on whether anyone has a right to that payment. If the company was a d/b/a or sole proprietorship, the owner would likely still be entitled to the payments. If the company’s assets were acquired by another business, the acquiring one probably also received the right to your payments. If the company went bankrupt and liquidated, then the bankruptcy probably contains a provison to collect payments like these and distribute them to creditors.

On the other hand, if a corporation or LLC was dissolved without anyone taking over the interest in this debt, then the debt is probably wiped out.

You should make good faith efforts to find out the status–call all contact numbers, write to any contact addresses, etc. If you can’t locate a responsible party (and if you do, don’t simply take their word for it; you can ask for proof or documentation of their right to the payments), then you might cease payment while being prepared to resume it if it’s demonstrated that you need to. source:

Question – The person I owed federal restitution died, do I still owe the money?

Answer – Yes you do. After the persons death the restitution is transferred to the person’s estate, which will be transferred to their heirs. Therefore you restitution will become part of someone’s inheritance.

Question – Can my spouses assets and property be taken to pay my restitution?

Answer – This is a tricky question, but yes they can. Anything that is jointly owned by both of you is game, any joint bank accounts, retirement accounts, property, homes, vehicles can be taken. For your spouse to protect them self they need to take a serious of steps before you are sentenced to equally separate any financial accounts and transfer any of their property into their name. Attempting to transfers all your assets to your spouse will not work, any assets that you have transferred or sold since the date of your arrest, or any assets that someone is holding for you is fair game to be taken. Even divorcing to protect your money and assets may not work either, the U.S. Attorney’s Office may claim that the divorce was just a way for the couple to avoid paying the restitution. Talk to a lawyer to figure out how your spouse can legally protect them self. Don’t try transferring to other people or business entities either to try and hide or protect the asset, these are called ‘nominees’ and will be nullified and seized.

Question – Can I settle my federal restitution with the victim for a lower amount?

Answer – Yes you can, but only if the victim or victims agree to it. This is lengthy process that requires a lawyer. Do not contact the victim’s directly, have your lawyer talk with probation and the US attorney’s office first so they can contact the victim’s to see if they will agree to a smaller settlement. Also, if you think your money woes end when you settled that restitution, think again, because forgiven restitution becomes taxable income! Why? The U.S. Internal Revenue Service considers forgiven or canceled restitution as income. Taxpayers must report that portion on a 1099-C forms.  Don’t think not filing the 1099-C form will get your off the hook, the Federal Litigation Unit once notified the restitution has been settled or negotiated for a smaller amount will notify the IRS about the forgiven restitution and the IRS will be expecting that 1099-C form on your tax return at the end of the year, and not filing it could lead risk of IRS audits, penalties, fines, or possible criminal charges. How much will you owe? That’s hard to say, there are various factors that need to be considered such as the forgiven amount, your liabilities,  assets, etc, this will best be answered by an attorney and tax professional. Don’t expect to walk away not owing the IRS any money.

Question – My Paycheck is being garnished for Child Support payments, can they garnish more to pay my restitution?

Answer – If there are already garnishments on your income at your states maximum garnishment percentage, they cannot garnish more. For example if your state has a maximum garnishment rate of 25% of your pay check, and child support is taking that 25%, they cannot garnish anymore to pay towards restitution.

Question – Can I deduct my restitution payments on my taxes?

Answer – No you can’t deduct your restitution payments on your tax return . Restitution is considered a penalty, and under the IRS tax code you can’t deduct penalties, fines, or restitution.

Question – Can my pension be taken to pay restitution?

Answer – Pensions can only be garnished to pay off court-ruled restitution when a participant is eligible to receive pension benefits under the plan. This means when you start collecting your pension fund, it can be garnished to pay restitution in criminal cases according to a recent ruling by the U.S. Court of Appeals for the 9th Circuit. The court held that the Victim’s Restitution Act of 1996 clears the way for victims to go after funds held in an individual’s pension account when seeking restitution in criminal cases. Prior to this ruling, courts followed federal pension law, the Employee Retirement Income Security Act of 1974, which specifically holds that pensions cannot be used to pay restitution.  source:

Question – I owe of restitution, what happens when I retire?

Answer – Retirement does not release you from your restitution liabilities, as long as the FLU says you owe money they will continue to try to collect it, and they can garnish a part of your social security and pension to get it.

Question – Can my Social Security be taken to pay restitution?

Answer – Social Security benefits are usually protected from garnishment and levy, but restitution can be garnished under the Mandatory Victim Restitution Act of 1996. source:

Question – How can avoid pay my restitution once I’m off Supervised Release?

Answer – That’s a question I’ll leave up to your accountant and lawyer to explain. Once you are off Supervised Release your restitution is now a civil matter and the FLU can do more than regular debt collectors can collect the restitution. You can do just as much as you can to avoid a normal debt collector as the FLU. The only way I know for a person to avoid paying their restitution entirely is for them to die or leave the country.

The Department of Justice confirms that large financial institutions have immunity from criminal sanction.


This being the first post for FPT I think the latest news from the Department of Justice be a fitting topic to start this site.

It is a dark day for the rule of law. Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. They also have not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions. source:Too Big to Indict []

The DOJ has finally confirmed what most of us have known all along – large financial institutions and corporations have immunity from criminal sanction. This was not money laundering for rich people hiding their wealth in tax shelters offshore bank accounts, this was money that was being laundered for drug cartels with connections to terrorist organizations. Though if the average citizen committed these crimes they would be labelled a “terrorist” and would be facing life in prison. The DOJ explanation for deciding against indicting HSBC was that criminal charges could jeopardize one of the world’s largest banks and destabilize the global financial system.

Clearly, the government has bought into the notion that too big to fail is too big to jail. When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished. The deterrence that comes from the threat of criminal prosecution is weakened, if not lost. source:Too Big to Indict []

I can’t agree more, when you tell a large financial institution they will only receive fines and not imprisonment for crimes they commit you send a message now  that they can operate on an entirely different set of laws which leads to a double standards for the rich and poor in these cases.

Matt Taibbi over at expressed even more outrage at this issue, his latest article Outrageous HSBC Settlement Proves the Drug War is a Joke had this to say,

The institutional bias in the crack sentencing guidelines was a racist outrage, but this HSBC settlement blows even that away. By eschewing criminal prosecutions of major drug launderers on the grounds (the patently absurd grounds, incidentally) that their prosecution might imperil the world financial system, the government has now formalized the double standard.

How about you dive into every bank account of every single executive involved in this mess and take every last bonus dollar they’ve ever earned? Then take their houses, their cars, the paintings they bought at Sotheby’s auctions, the clothes in their closets, the loose change in the jars on their kitchen counters, every last freaking thing. Take it all and don’t think twice. And then throw them in jail.

Sound harsh? It does, doesn’t it? The only problem is, that’s exactly what the government does just about every day to ordinary people involved in ordinary drug cases.

Federal and state authorities now protect the 1% and condemn the other 99% to prison.