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Civil Penalties Imposed After Criminal Penalties Not Double Jeopardy
Description Defendant sentenced to prison and to pay restitution could be required, in subsequent civil penalty action, to pay further damages and fines without violating the Double Jeopardy Clause of the Fifth Amendment, which only protects against serial criminal punishments for the same act.
Topic Criminal Law
Key Words Double Jeopardy, Securities Fraud
C A S E   S U M M A R Y
Facts Palmisano, an attorney, was convicted of criminal offenses for running a Ponzi scheme that defrauded 90 people out of $8 million. He was sentenced to 15 years in prison and was ordered to pay $3.8 million in restitution to victims and $700,000 to the U.S. He was then sued by the SEC for civil violations of the securities laws and was ordered to disgorge $9.2 million and pay $500,000 in civil penalties. He appealed the second (civil) judgment as double jeopardy in violation of the Fifth Amendment.
Court of Appeals Decision Affirmed. The Double Jeopardy Clause "protects only against the imposition of multiple criminal punishments for the same offense" in successive proceedings. Only in unusual cases will civil sanctions be held to be criminal; designation of sanctions by Congress is to be given considerable deference. Disgorgement and monetary penalties are not so punitive as to not be civil.
Citation Securities and Exchange Comm. v. Palmisano, 135 F.3d 860 (2nd Cir., 1998)

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