Former trucking CEO takes restitution case to Supreme Court
January 16, 2018
The U.S. Supreme Court said last week that it will review a case that ordered a former trucking company CEO to pay $4.85 million in legal fees after being convicted of defrauding General Electric Capital Corp.
In January 2015, Sergio Lagos was convicted of conspiracy to commit wire fraud and six counts of wire fraud. In February 2016, he was sentenced to serve 97 months in federal prison and to pay about $16 million in restitution. Lagos had been the CEO of USA Dry Van Logistics, a cross-border trucking company.
Lagos was ordered to pay $11 million plus $4.85 million for the cost of the investigation.
The case that will be heard by the Supreme Court questions whether or not Lagos should have to pay the $4.85 million even though the fee wasn’t required or requested by the government. Lagos’ attorneys contend that the Mandatory Victims Restitution Act does not authorize restitution for the legal, expert, and consulting fees incurred in investigating the fraud or its legal fees from the bankruptcy proceedings caused by the fraud.
GECC’s estimated losses in the fraud scheme were more than $26 million.
According to the U.S. Department of Justice, Lagos admitted that from March 2008 through the end of January 2010, he joined in a scheme to defraud GECC, a lending company that provided capital to USA Dry Van Logistics. Lagos admitted to signing, preparing and/or directing others to prepare certificates that falsely inflated the amount of the company’s accounts receivables.
In January 2010, USA Dry Van Logistics had increased their line of credit with GECC to $38 million