The Wolf of Wall Street (Jordon Belfort) and Restitution Payments after Supervised Release
Many in the white collar criminal law community are looking forward to the upcoming movie from Martin Scorsese entitled "The Wolf of Wall Street." The movie, staring Leonardo DiCaprio, is based on the true story of Jordon Belfort. Belfort was sentenced to four years in prison in 2003 and ordered to pay $110.4 million in restitution for engaging in an alleged pump and dump stock scheme.
Of interest to readers of this blog is an issue that recently arose with regard to Belfort's restitution payments. From CNN:
Of interest to readers of this blog is an issue that recently arose with regard to Belfort's restitution payments. From CNN:
Despite Belfort's lucrative movie and book deals, and earnings from a new career as a motivational speaker, many of these victims are still waiting for restitution.
When Belfort was sentenced in 2003 to four years in prison, Judge John Gleeson ordered him to pay about $110.4 million to a victims fund, in installments equal to 50% of his monthly gross income, after his release from jail. If any major changes in his financial circumstances took place, the percentage Belfort had to pay could be adjusted up or down.
After I asked for an update on the fund in early October, lawyers in the office of Loretta E. Lynch, U.S. Attorney for the Eastern District of New York, replied that Belfort had only contributed about $11.6 million to the victims' fund so far -- about one-tenth of the required total.
In a court filing with many details about Belfort's current income whited out, Lynch's office asked Gleeson to find Belfort in default, saying that according to his tax returns and other available information, the payments he has been making are "insufficient." They said that in 2011, for instance, Belfort paid $21,000 in restitution, although he made more than $1 million for the motion picture rights to his memoir, as well as more income from a motivational speaking corporation he half-owns.
Belfort's attorneys responded that he doesn't deny he still owes money to victims, but that his position is his obligation to pay 50% of his income to them ended when his term of "supervised release" from prison expired in April 2009. They said that for the past two years, he's been trying to arrange a "forbearance" agreement with the government to "pay 100% of the profits of the movie and the two books," but that his offer has been turned down.
"Before you accuse me of anything, you should learn the facts," Belfort said in an e-mail last week. "I have been trying to settle this case forever and have been completely stonewalled. I can even show you the settlement offer from the government, on their letterhead, asking for only 50% of my books, after I offered 100%."
On Friday afternoon, the government asked to withdraw its pending motion to hold Belfort in default on his payments to victims. Oral argument in the case had been scheduled to begin Nov. 22. In a court document, Beth Schwartz, Assistant U.S. Attorney for the Eastern District of New York, said the delay would give both sides "an opportunity to explore a resolution" of certain issues, and that "Mr. Belfort joins in this request."
The issue of how the government should respond in such situations once supervised release has ended has come up several times in recent years. It will be interesting to see what happens in this particular case as interest in the back story increases during the lead up to the Christmas Day movie release.
To watch a preview of "The Wolf of Wall Street," click here.
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