Trucking CEO Who Defrauded GE Capital Wins Restitution Fight

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By Jordan S. Rubin

A former trucking company CEO convicted of defrauding General Electric Capital Corp. won his multi-million-dollar restitution challenge at the U.S. Supreme Court May 29.

Sergio Lagos argued he wasn’t on the hook for attorneys’ and other fees related to GE Capital’s internal investigation of the matter incurred outside of the government probe.

The amount in question totaled about $5 million of the nearly $16 million restitution he was ordered to pay at sentencing. Lagos didn’t challenge the remaining $11 million.

The federal Mandatory Victims Restitution Act only applies to costs associated with participation in the government’s investigation or prosecution, Lagos argued to the justices April 18. The act governs restitution in tens of thousands of cases a year.

Besides the millions at stake here and the ruling’s potential effect on thousands of restitution cases a year, the dispute raised broader questions about rehabilitation and attorneys’ fees, according to outside briefs filed in the case.

The case is Lagos v. United States , U.S., No. 16-1519, reversed, 5/29/18 .

To contact the reporter on this story: Jordan S. Rubin in Washington at jrubin@bloomberglaw.com

To contact the editor responsible for this story: C. Reilly Larson at rlarson@bloomberglaw.com

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