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nexus:
Justice for the
Forgotten Victims of Financial Crimes

An Interview with Martin Plone.

From nexus, Volume 3, Issue 2, September 1997.

Veterinarian Martin Plone was swindled out of his life savings by his "so-called" best friend, a real estate broker who helped him invest his retirement savings in deeds of trust. It turned out that many of the deeds were never recorded and that Plone's "friend" had defrauded forty other people as well, including his own elderly parents. Although his abuser went to state prison and was ordered to pay back his victims, Plone discovered that recovering his losses was a legal nightmare. After paying a lawyer over a hundred thousand dollars, he decided to take things into his own hands. He taught himself the law and was able to recover most of his losses. His frustration with the system led Plone on a crusade to overhaul the restitution system and become an advocate for those he considers to be the "forgotten victims of economic crime."

nexus: Obtaining and enforcing a criminal restitution order was pivotal in recovering your losses. Could you start by explaining what restitution is and how it works?

Martin Plone: Every state has some kind of restitution law. California law says that in every criminal case in which a defendant causes economic harm, victims are entitled to be compensated for their losses. The amount that the victim is entitled to is determined by judges during sentencing, which occurs after the defendant is convicted or agrees to a plea bargain. These judgments, or "restitution orders," give victims legal authority to recover their losses without having to go through the expense and rigors of obtaining civil judgments. Victims can then file abstracted judgments, or summarized versions of the restitution orders, with county recorders in counties in which they believe that the defendant has assets. That way, if an abuser has property that the victims don't know about and he tries to sell it, he's prevented from doing so. It's like a lien. It also makes it difficult for the defendant to get loans in the future. Restitution is especially useful for victims who don't have the financial resources to hire attorneys.

nexus: You were able to recover over $800,000 of your million dollar loss. Can you explain in laymen's terms how you went about it?

MP: At first, I hired a lawyer to help me. But his fees were outrageous and I couldn't keep up with them so I decided I could learn to do my own legal work. I was fortunate in that I had the ability to learn what I needed to. I was also lucky. For example, I discovered that the person who defrauded me was getting a $46,000 commission from a title company while he was in prison for a big sale he made before he went to prison. I used the restitution order to attach the commission. I only happened to hear about the commission because I live in a small town and people were outraged about what had happened and somebody called me and told me about it.

I also filed a claim with the California Department of Real Estate's "recovery account" which compensates victims of real estate fraud by licensed brokers. I was able to recover $80,000 from the fund because my abuser was a broker. The Department tried to deny my claim by refusing to recognize my restitution order, claiming that I needed a civil judgment. But I fought them and won. I also went after the title company, which had liability because my abuser had forged my name on deeds of trust that he used to get bank loans. If it hadn't been for their negligence, a lot of this wouldn't have happened.

nexus: Through others' cases and your own, you discovered a myriad of problems with the whole restitution system. Can you describe what they were?

MP: Some judges simply refuse to order restitution. I know of a case in which the judge refused to order it because he said the defendant was a dead-beat and it would be a waste of time. Another problem is that even though criminal restitution orders are enforceable as civil judgments, some entities don't recognize them and make victims get judgments in civil court, which is a waste of money and time. Getting judges to name people on restitution orders is another problem. Once a defendant has been sentenced, the victim gets a copy of the sentencing order, which should list each victim and the amount of their restitution. But a lot of judges just say "the defendant is sentenced to 8 years and ordered to pay restitution" without saying to whom. How on earth can a victim enforce the order if their name's not on it? I know of a doctor who lost his life savings in a limited partnership scam. The defendant was sentenced to prison and ordered to pay restitution. The order stated the amount to the penny - it was something like $9,280,722.45 but the order didn't name the victims.

There are also problems with plea bargaining. Normally when someone is charged with a lot of counts, they plea bargain and get most of the counts dismissed. It is basically a lottery; some victims get included in the plea agreement, while others do not. It shouldn't be that way. What incentive is there for victims to cooperate with the criminal justice system and spend all this time giving information and preparing documents just to have it all dismissed later at the prosecutors' discretion? In my case, the guy was charged with 22 counts and had 21 counts dismissed. The count he pled to involved the least amount of money. What notice is this giving to the world?

nexus: When you conduct trainings for judges and district attorneys and probation officers, what do you cover? What's important for them to know?

MP: In addition to talking to them about the legal aspects of restitution - the case law and statutes - I try to get them to understand why restitution is so important to victims. Because DA's are representing "the people" and not victims, some of them look at victims as something incidental, something that they have to deal with. I try to get them to empathize. I ask DA's how they would feel if their mothers were victims of fraud and how outraged they would be if their mother's DA wasn't returning phone calls or if they'd accepted a plea bargain in which she didn't get restitution while others did.

nexus: You also discovered that state laws needed to be changed.

MP: I've been working with a state senator to completely overhaul the restitution code in California. One of the things we changed was including interest on losses in restitution orders. Up until now, if you were swindled out of $100,000, you got $100,000 in restitution. But you should be compensated for the interest you would have earned too. You would be in a civil case. We also got attorneys' fees covered when victims need to hire attorneys to represent them. Also, if you're a victim of violent crime in this county, you get a nine-page handout from the DA on how to enforce restitution orders. But if you're a victim of economic crime, they don't give you anything. With the new law, a similar sheet will be developed for all victims of crime in the state. We've introduced new amendments this year that will give victims standing to file motions to amend restitution orders. The federal courts have said that victims have no standing to appeal restitution orders because they're not part of the criminal justice system. It's outrageous that judges take this intellectual approach. Victims will also have the right to address the court at sentencing hearings - this is important. It's part of the healing process.

nexus: You've taken a particular interest in elderly victims. Why is that?

MP: Most of the major real estate fraud cases involve elderly victims because that's who is investing. I have real empathy for elderly who lose their life savings because they don't have time to make up for their losses. And for many, they're not just losing their principle, but also the monthly interest they depend on. I know a widow who had invested her husband's insurance and lost it all. She had been getting $1,200 a month from it along with Social Security and was able to get by. But when the $1,200 a month stopped, all she had left was Social Security and she was devastated. She lost her house and is living in a little trailer. How does an 82-year-old woman start her life over again?

nexus: You've talked about the need for clinics and support groups for victims of financial crimes. What is it that these victims need?

MP: I talk to victims about how to deal with the criminal justice system, what to expect, and what not to expect. I tell them how they can recover without hiring attorneys, how to enforce restitution orders, and how to record abstracts. I also talk to victims about getting on with their lives if there is no way to recover. Eventually, you have to let go. But I encourage victims to try to get restitution. With restitution comes forgiveness and unless there's forgiveness, there's no healing. Eventually victims have to forgive or it drags on for the rest of your life.

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