On May 29, 2018, the United States Supreme Court decided Lagos v. United States, narrowly interpreting the Mandatory Victims Restitution Act of 1996 (“MVRA”) to bar crime victims from recovering the costs of their private investigations and civil proceedings. The Supreme Court’s decision closes an important avenue for companies across all sectors—from financial institutions and services to healthcare and energy—to recoup costs associated with internal investigations, audits, and civil proceedings, even if they lead to federal criminal charges.

BACKGROUND -

The MVRA requires defendants convicted of certain federal criminal offenses, “including any offense committed by fraud or deceit . . . in which an identifiable victim . . . has suffered a . . . pecuniary loss,” to “make restitution to the victim of the offense . . . .”Restitution includes “reimburse[ment] [to] the victim for lost income . . . and other expenses incurred during participation in the investigation or prosecution of the offense or attendance at proceedings related to the offense.”