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A Better Partnership
January 25, 2012

COA Opinion: Court can order criminal defendant to pay restitution to business based upon time that business spent investigating misconduct

On January 24th, the Court of Appeals approved its November 2011 decision in People v. Allen, No. 299267 for publication. In that case the Court was reviewing the trial court's order for the payment of victim restitution to Blue Cross Blue Shield. The defendant had been convicted of attempting to commit prescription fraud using a valid Blue Cross contract number. The defendant was an employee for one of Blue Cross' vendors and Blue Cross investigated the attempted purchase and made efforts to determine if there had been any other fraud. The trial court awarded Blue Cross restitution based on the pro rata share of the Blue Cross department's budget as determined by the amount of investigator time spent on this case. The defendant argued that Blue Cross did not suffer financial harm because Blue Cross would have incurred the costs of the investigation (the salary of the investigator) regardless of the fraud. The Court of Appeals affirmed the trial court's conclusion that Blue Cross had been harmed and could be awarded restitution, reasoning that the loss of time that could have been spent on other things, amounts to direct financial harm.

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