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Name: People v. Williams
Case #: E048899
Opinion Date: 04/28/2010
Court: CA Court of Appeal
District 4 DCA
Division: 2
Citation: 184 Cal.App.4th 142
Summary

The restitution order should have included IRS penalties incurred by the victim as a result of the defendant’s embezzlement of funds diverted from payroll taxes. Appellant embezzled funds from his employer, including money that should have gone to pay payroll taxes. After appellant was convicted of grand theft, the prosecutor sought penalties and interests assessed by the IRS to be made part of the restitution order. After the trial court refused to include these costs in the order, the prosecution appealed. The Court of Appeal reversed. The restitution statute allows a business or government entity to recover restitution only when it is a direct victim of crime. Here, the company employing appellant was charged and forced to pay penalties as a result of the fact appellant embezzled the money that should have been paid to the IRS. The refusal to order appellant to pay for these penalties deprived the entity of its constitutional right to receive restitution from appellant for losses it suffered. People v. Boudames (2006) 146 Cal.App.4th 45, is inapposite because the status of the parties in that case was quite different. In that case, the victim was the California Board of Equalization who sought to impose penalty assessments on the defendant for non-payment of taxes, but those assessments that were non-economic losses which are not recoverable.