Update: On November 21, 2019, the Supreme Court of Ohio handed down a merit decision in this case. Read the analysis here.

Read the analysis of the argument here.

On May 8, 2019, the Supreme Court of Ohio will hear oral argument in State of Ohio v. Zachary C. Allen, 2018-0705. At issue in the case is whether a defendant convicted of forgery may be ordered to repay the bank that cashed the forged checks.

Case Background

In July 2016, Zachary Allen went to several banks in the Columbus area and cashed forged checks made payable to himself. On August 14, 2016, the Franklin County Grand Jury indicted Allen with seven counts of forgery and seven counts of possession of criminal tools. Allen pleaded guilty to the forgery charges and the rest of the charges were dismissed.

At his sentencing in March 2017, Allen objected to the State’s request that the court order Allen to pay restitution to the banks that cashed the checks, on the basis that the banks were third-parties, not “victims” within the meaning of Ohio’s restitution statute, R.C. 2929.18. Franklin County Court of Common Pleas Judge Michael Holbrook held that the banks were victims of Allen’s forgery and ordered Allen to pay restitution to the banks for the amounts paid on the forged checks. Allen appealed to the Tenth District Court of Appeals, challenging only the restitution order.

The Appeal

In a unanimous opinion by Judge William A. Klatt, joined by Judges Lisa L. Sadler and Jennifer Brunner, the Tenth District Court of Appeals reversed the trial court’s restitution order, holding that the banks were not victims of the underlying offenses. The appeals court found that because the banks reimbursed the account holders, the account holders—not the banks—were the victims who suffered direct economic harm.

R.C. 2929.18, does not define “victim,” but the court relied on other Ohio appellate decisions that held that banks that reimburse their customer account holders are third parties, and cannot be awarded restitution from a defendant. Although the banks cashed the forged checks, the account holders suffered the initial economic loss and are therefore the victims in this case. Thus, the court held that the banks could not be awarded restitution.

The State filed a discretionary appeal.

Votes to Accept the Case

Yes: Justices DeWine, Fischer, French, Kennedy, and former Justice O’Donnell

No: Chief Justice O’Connor and former Justice DeGenaro

 Key Statutes and Precedent

R.C. 2929.18 (Restitution Statute)(“Financial sanctions that may be imposed pursuant to this section include, but are not limited to . . . restitution by the offender to the victim of the offender’s crime or any survivor of the victim, in an amount based on the victim’s economic loss.”)

R.C. 2913.31 (“(A) No person, with purpose to defraud, or knowing that the person is facilitating a fraud, shall do any of the following: . . . (2) Forge any writing so that it purports to be genuine when it actually is spurious, or to be the act of another who did not authorize that act, or to have been executed at a time or place or with terms different from what in fact was the case, or to be a copy of an original when no such original existed[.]”)

R.C. 2930.01(H) (Rights of Victims of Crimes)(Definitions)

(“‘Victim’ means . . . [a] person who is identified as the victim of a crime or specified delinquent act in a police report or in a complaint, indictment, or information that charges the commission of a crime and that provides the basis for the criminal prosecution . . . .”)

Ohio Const. Art. I § 10a (Marsy’s Law) (To secure for victims justice and due process throughout the criminal and juvenile justice systems, a victim shall have the following rights, which shall be protected in a manner no less vigorous than the rights afforded to the accused: * * * (7) to full and timely restitution from the person who committed the criminal offense or delinquent act against the victim . . . .”)

State v. Pietrangelo, 2005-Ohio-1686 (11th Dist.) (the government was not a “victim” eligible for restitution when the government advanced its own funds to pursue a drug buy through an informant. The government was not “the person or entity that was the ‘object’ of the crime.”)

State v. Hinson, 2006-Ohio-3831 (8th Dist.) (an insurance company was also a victim eligible for restitution when the company voluntarily paid a third party for damages caused by the offender.)

State v. Bartholomew, 2008-Ohio-4080 (“[T]he purpose of R.C. 2929.18(A)(1) is to require the offender to reimburse the victim — or whatever entity paid the victim — for the economic loss caused by the crime.”)

State v. Kiser, 2011-Ohio-5551 (2nd Dist.) (bank was not a “victim” of a forgery; “the victims of the thefts are the people named in the indictment whose money Kiser stole.”)

State v. Estes, 2011-Ohio-5740 (3rd Dist.) (banks were victims within the meaning of R.C. 2929.18 in fraudulent credit-card transactions where the banks, not the account holder, paid each transaction.)

State v. Dull, 2013-Ohio-1395 (3rd Dist.) (“The General Assembly removed the third-party language from [R.C. 2929.18] for a reason in 2004, and it has never put the language back.”)

State v. Stump, 2014-Ohio-1487 (4th Dist.) (“[T]he victim is the individual from whose account [the defendant] transferred money into her account. [The Bank] is a third-party that reimbursed its customer the money stolen from his account.”)

State v. Harris, 2015-Ohio-4412 (6th Dist.) (“Furthermore, a bank which reimburses a customer/victim is not a “victim” of the crime and, therefore, the trial court cannot require restitution to be paid to the bank.”)

In re M.A., 2016-Ohio-1161 (11th Dist.) (a victim is the object of crime; upholding restitution to school district, but not to the police and fire departments, for expenses incurred in responding to bomb threat.)

Shaw v. United States, 137 S.Ct. 462 (2016)( under the federal bank fraud statute,a bank retains a property interest in customers’ deposits)

State’s Argument

The banks were victims because they suffered the economic loss resulting from Allen’s conduct, since they paid the forged checks that Allen presented, reimbursed customers’ accounts, and were therefore harmed. The Tenth District Court of Appeals erred when it acknowledged that a “victim” is someone harmed by a crime or wrong, but concluded that the banks which cashed the forged checks were not victims. Because the banks reimbursed the affected accounts, the banks are the proper recipients of restitution—they were not third parties.

The Tenth District’s analysis was incorrectly based on the premise that there can only be one victim of a crime, which the court concluded was the account holders. However, there can be multiple victims of a single criminal offense, and therefore more than one person or entity may be awarded restitution.

The purpose of R.C. 2929.18, Ohio’s restitution statute, is to require the offender to reimburse the victim, or whatever entity paid the victim, for economic loss suffered. The Tenth District erroneously relied on cases that had nothing to do with banks cashing forged checks and suffering resulting economic losses.

Even if the banks were “third parties,” R.C. 2929.18 should not bar recovery. R.C. 2929.18 does not contain a mandatory prohibition against restitution to third parties. Barring restitution to all third parties—even those who have suffered losses from a defendant’s criminal conduct—should not be sanctioned by the Court.

Finally, although Marsy’s Law is not binding on this case because the offenses preceded the effective date of the amendment, it contains a more expansive definition of a crime victim than previously used under Ohio law, creating a constitutional right to full restitution for those harmed by the commission of an offense.  As a matter of public policy, the Court should conform to Marsy’s Law and determine the banks to be victims, and thus be permitted to receive restitution.

Allen’s Argument

This case is not about policy arguments; it is about whether a bank qualifies as a victim under R.C. 2929.18. Ohio law allows the court to order restitution to the victim of a crime for the amount of the victim’s economic loss. Restitution to third-parties is not allowed under the statute. Although older versions of the statute allowed restitution to third-parties, the General Assembly removed that language in the current statute.

The Tenth District did not hold that there can only be one victim of a crime. Multiple people can be a victim of a crime, but every person or entity harmed by an offense is not necessarily a victim entitled to restitution within the meaning of R.C. 2929.18.

R.C. 2929.18 does not define “victim.” Some Ohio appellate districts have relied on R.C. 2930.01 to determine who qualifies as a victim for restitution. That section requires a victim to be identified in a police report or other court document that provides the basis for criminal prosecution. In this case, the indictment does not identify a victim for any of the forgery counts.

Indeed, many of the cases that the State cites in support of its proposition are inapposite to this matter in that the bank or other entity in those cases was actually a target of the defendants’ offenses. Here, Allen targeted the account holders, not the banks, and therefore were merely third-parties that suffered losses, rather than the targeted victims.

The Court should not consider the state’s argument that it was a victim because of its repayment responsibilities under the U.C.C. because that argument was not made below, and because the U.C.C. provisions have no relevance in a criminal law context. Nor should the Court consider Marsy’s Law, because it was not in effect when these offenses occurred.

State’s Proposed Proposition of Law

A bank which cashes a forged check, suffers an economic loss, and is a “victim,” under R.C. 2929.18. When a defendant is convicted of forgery, he may be ordered to pay restitution to a bank which cashed the forged check defendant presented.

Student Contributor: Carson Miller