Pension Can be Garnished to Pay Criminal Restitution

The court noted that the Mandatory Victims Restitution Act (MVRA) provides that restitution orders are to be enforced by the government using all of the remedies that are available for the collection of criminal fines.

In addition, the opinion said that, “Although a tax liability to the federal government is conceptually different from an order of restitution to a defrauded party, Congress, in enacting the MVRA, made the social policy decision to treat the latter in the same manner as the former.”   Therefore, the court decided that by enacting the MVRA and its enforcement provisions, Congress created an exemption to the anti-alienation provisions of the Employee Retirement Income Security Act (ERISA).

Raymond Novak pled guilty to charges of conspiracy to transport stolen goods and filing false income tax returns. The district court sentenced him to 24 months’ imprisonment and ordered him to pay restitution in the amount of  3,360,051.67.   The Clerk of the district court issued a post-judgment writ of garnishment to his pension plan sponsor, the May Company, for amounts owed to Novak.

Novak objected to the garnishment and a district court issued an order quashing the writ.

The 9 ^th Circuit, in its opinion, vacated and remanded the district court’s order.

The opinion in US vs. Novak is  here .