Case # F423908
The California Constitution provides that “full restitution is mandatory in every case where there is a victim who incurred economic losses as a result of the commission of a crime of which the defendant was convicted”.
“Victims” include the following persons:
Direct victims (those who directly sustained economic losses); the immediate surviving family of the actual victim; the parent, grandparent, sibling, spouse, child or grandchild of the victim; and a person who previously lived in the victims’ household for at least two years in a relationship substantially similar to that of a parent, grandparent, sibling, spouse, child or grandchild.
Statement of Loss Form:
When completed and submitted by victims, the Probation Department’s “Statement of Loss” form will be used to establish each victim’s individual amount of loss and the total amount of loss to all victims. Victim loss information will be included in a pre-sentence report submitted by Probation to the Court and will identify the amount of restitution owed by the defendants in total, and specifically for each victim.
Defendants’ Right to Contest the Restitution Amount:
The defendants have the right to contest the amount of restitution as determined by the Probation Department and the District Attorney’s Office. However, if the recommendations for restitution are contested, victims have the right to be present at that hearing and offer testimony as to why the amounts are accurate. The Court will make the final determination of the approved amount of restitution and then present a specific amount of restitution for the record.
Distribution of Criminal Restitution Orders:
The Probation Department’s Revenue Recovery Division will distribute the proceeds from the sale of the defendants’ assets to the victims, to start to satisfy the amounts victims are owed. We anticipate that victims will get some recovery from the sale of the defendants’ frozen personal assets and held by the criminal court and some recovery as the properties and projects held by the Bankruptcy Trustees are sold off. (Note: The Criminal Court and the Bankruptcy Court are two separate processes.) Each distribution of revenue recovered from the defendants will be distributed to victims based on the victim’s individual percentage of loss.
Outstanding (Unpaid) Restitution:
It is unlikely at this time that all victims will be fully compensated for their losses. Losses that remain unsatisfied will still be owed to victims by Ms. Guth and Mr. Yaguda, as restitution is a lifetime court order. The criminal restitution debt to victims is not dischargeable through personal bankruptcy, and continues to accrue at 10% per year. Pre-existing liens and claims against the defendants’ personal assets have legal priority over direct restitution orders to victims. The Criminal Court will determine the value, validity and priority of those claims, which, if approved, will reduce the restitution amount available for distribution to victims.
Restitution Fines and Penalties:
The court also imposes a restitution fine and other penalties on defendants, based on existing law.
Freezing of Assets
The Superior Court has issued orders freezing the personal assets of the defendants. These court orders have frozen not only all their personal interests in real estate, but also bank accounts, other financial accounts, vehicles and other things of value. The court orders prohibit anyone from selling or secreting these assets.
Bankruptcy Court Action
Separate and apart from the criminal investigation, the Federal Bankruptcy Court assumed control in July, 2008, over EFI’s business offices, properties, and all investment files to protect both the ongoing business transactions and investors’ and creditors’ interests pursuant to Federal Bankruptcy laws.