Robers v. United States
The Court ruled that restitution for mortgage fraud must be reduced by the actual sale price banks got for foreclosed collateral, not by the collateral's value on the day the banks took title to it.
Because home values often change between foreclosure and sale, the ruling determines who bears the risk of a falling market -- and the Court placed that risk on the fraudster, not the victim bank.
How it got here: A federal district court set Robers's restitution using the sale proceeds; the Seventh Circuit affirmed; the Supreme Court took the case because circuits disagreed on the method.
The Case in Depth
What happened
Benjamin Robers used fraudulent loan applications to get banks to lend him about $470,000 to buy two houses, putting up the houses as collateral. He defaulted, the banks foreclosed and took title to the houses in 2006, and later sold them in a falling real estate market for a combined $280,000. He was convicted of wire fraud conspiracy and ordered to pay restitution equal to the shortfall.
The question before the Court
When banks foreclose on homes used as collateral for a fraudulent loan, should restitution be reduced by the homes' value when the banks took title, or by what the banks actually got when they later sold them?
Why it matters
People convicted of mortgage fraud will generally owe more in restitution when property values fall between foreclosure and resale, since courts must credit only the money banks actually recovered from selling collateral, not its earlier appraised value. This shapes how sentencing courts calculate restitution in fraud cases nationwide.
What changes now
The Seventh Circuit's judgment affirming the district court's restitution calculation stands, so Robers's restitution amount -- based on actual sale proceeds -- remains in place. The ruling settles a split among federal appeals courts over how to calculate restitution when collateral is sold after foreclosure, giving sentencing courts nationwide a uniform rule going forward.
What this does not decide
The Court's holding assumes the victim tried to sell the collateral within a reasonable time. The concurrence stresses that if a victim instead chooses to hold collateral as an investment rather than promptly selling it, a defendant might not be responsible for a later decline in its value -- a scenario the majority opinion does not resolve.
Concurrences and dissents
Concurrence — Justice Sotomayor
Justice Sotomayor joined the Court's opinion but wrote to clarify its limits: the ruling applies only where a victim intends to sell collateral but faces a reasonable delay in doing so. If a victim instead chooses to hold collateral as an investment rather than promptly liquidating it, the defendant should not bear the cost of any later decline in value, because the victim's own choice -- not the fraud -- would then be the cause of that loss. She would place the burden on the defendant to prove such a choice occurred, but found Robers had not made that showing here.
How the Court got there
The legal reasoning, step by step
- The Court read the restitution statute's repeated phrase 'the property' as referring consistently to whatever property the victim actually lost because of the crime -- here, the money the banks lent, not the houses used as collateral.
- Applying the interpretive principle that identical words in the same statutory provision are presumed to carry the same meaning throughout, the Court concluded that 'the property ... returned' must likewise mean money, since that was the property originally lost.
- The Court acknowledged this reading sometimes sounds awkward when applied to money (since money isn't literally 'returned' the way an object is), but treated that awkwardness as the unavoidable cost of writing one statute that covers many kinds of property.
- The Court found that valuing money received from a sale is simpler and more administrable than valuing collateral's worth on some earlier date, which would require expert appraisals and litigation.
- Addressing the fraud statute's requirement that losses be proximately caused by the crime, the Court held that normal market fluctuations in collateral value do not break the chain of causation between the fraud and the victim's ultimate loss, so the offender remains responsible for market-driven declines.
- The Court rejected arguments based on state mortgage law and the rule of lenity, concluding the statutory text was clear enough that no grievous ambiguity justified a more lenient reading favoring the defendant.