No Offset Without Tracing: Restitution, Collateral, and Victim Subpoenas in United States v. Cross (6th Cir. 2025)

I. Introduction

In United States v. Cross, No. 25-5276 (6th Cir. Dec. 16, 2025) (unpublished), the Sixth Circuit addressed three recurring issues in federal criminal practice:

How and when a defendant may obtain an offset against a restitution order under the Mandatory Victims Restitution Act (MVRA) when a bank has foreclosed on and later sold collateral.
To what extent a defendant can use a Rule 17(c) subpoena to obtain broad discovery from a victim bank (or its successor) in aid of attacking restitution.
Whether a district court may rely on findings from one order (here, denying restitution offset) when ruling on a related post-judgment discovery motion.

Although the opinion is “not recommended for publication” and therefore not binding precedent under Sixth Circuit practice, it offers a clear and detailed application of several important doctrines:

the distinction between Guidelines loss and MVRA restitution;
the defendant’s burden to trace collateral and payments to the specific loss covered by a restitution order in order to prevent “double recovery” by the victim; and
the limits on using Rule 17 subpoenas as a quasi-civil discovery device against crime victims.

This commentary explains the factual background, the court’s reasoning, and the broader implications of the decision—particularly the core principle the panel effectively crystallizes: there is no restitution offset for collateral or payments unless the defendant can trace that value to the specific loss addressed in the restitution order.

II. Background of the Case

A. The Fraud and the Loans

Donald Cross owned Cross Connection Communications, Inc. (CCCI), a cable-construction contractor. In 2004, CCCI obtained a line of credit from Cornerstone Community Bank. The line of credit was secured by CCCI’s accounts receivable (i.e., money owed to CCCI by its customers).

To keep funds flowing on that line of credit, Cross engaged in bank fraud. In 2006–2007, he submitted fraudulent invoices to Cornerstone, overstating accounts receivable so that the bank would advance more funds than it otherwise would have.

Separately, Cross had other loan relationships with Cornerstone, for which he had pledged real estate—his home and commercial property—as collateral. These real-estate loans were distinct from the specific line of credit tied to the fraudulent invoices.

B. Plea, Sentencing, and Restitution

Cross pled guilty to one count of bank fraud under 18 U.S.C. § 1344. That count, and the corresponding restitution obligation, related only to the single line of credit on which he had submitted false invoices. Other loans from Cornerstone to Cross were not directly at issue in the criminal count or the restitution order.

At sentencing:

The parties stipulated that the loss amount was $2.8 million.
That figure was adopted both for:
- Guidelines purposes, under U.S.S.G. § 2B1.1(b)(1), and
- Restitution purposes, under the MVRA, 18 U.S.C. § 3663A.
The district court sentenced Cross to 51 months in prison, five years of supervised release, and ordered $2.8 million in restitution to Cornerstone.

C. Foreclosures, Property Sales, and the First Offset

Before and after sentencing, Cornerstone foreclosed on Cross’s real estate under existing security agreements. It later sold:

CCCI’s office property for $317,500; and
Cross’s home for $1,100,000.

Cross then sought to offset his restitution liability, arguing that:

The bank had already recovered substantial amounts from foreclosure sales and other asset liquidations.
He had also made payments on his loans.

He claimed that, when added together, the bank had recovered about $2,811,303—enough to fully satisfy the $2.8 million restitution and even leave him with a surplus.

After a significant delay, and after Cornerstone merged into SmartBank (which became the successor-in-interest to Cornerstone’s rights), the district court found that the bank had recovered $307,701 from Cross through payments and asset liquidation. The court amended the judgment to reduce the restitution to $2,492,299. Notably, it did not credit the foreclosure sale proceeds from Cross’s home and CCCI’s offices as additional offsets.

D. Renewed Offset Motion, Subpoena to SmartBank, and Government Discovery

Dissatisfied, Cross:

Filed a second motion to further offset his restitution, now claiming that he had actually overpaid and that SmartBank owed him $894,124.
Issued a subpoena to SmartBank, seeking a deposition and extensive documents about CCCI’s dealings and collateral liquidation, to prove his offset theories.
The government, in turn, moved to compel post-judgment discovery from Cross on his finances, to aid in enforcing the outstanding restitution order.

SmartBank moved to quash the subpoena, calling it overly broad and unduly burdensome—effectively a civil-style fishing expedition imposed on a crime victim.

The district court:

Denied Cross’s second motion to offset restitution.
Quashed Cross’s subpoena to SmartBank.
Granted the government’s motion to compel Cross to produce financial information.

Cross appealed all three rulings. The Sixth Circuit affirmed.

III. Summary of the Sixth Circuit’s Opinion

The panel (Judge Nalbandian writing; Judges Davis and Hermandorfer joining) addressed three issues:

Restitution Offset: The court acknowledged that the district court applied the wrong legal standard—using Guidelines loss principles instead of the MVRA. However, it held the error harmless because Cross failed to show that the foreclosed properties actually secured the specific line of credit underlying the restitution order. Without that link, he could not show double recovery or entitlement to further offset.
Subpoena to SmartBank: The court held that the district court did not abuse its discretion in quashing Cross’s subpoena. The requested information was effectively irrelevant once the offset motion failed, and SmartBank (as the victim and a non-party to the litigation between Cross and the government) would be unduly burdened by broad discovery.
Government’s Motion to Compel: The court rejected Cross’s argument that the district court improperly relied on its restitution-offset order when granting the government’s discovery motion. There is nothing improper about a court relying on earlier factual and legal determinations for related post-judgment rulings.

The core doctrinal contribution is the explicit requirement that, to obtain a restitution offset based on collateral or other recoveries, a defendant must trace that collateral or payment to the specific loss covered by the restitution order and show that, absent an offset, the victim would recover twice for the same loss.

IV. Detailed Legal Analysis

A. Restitution Offset, Collateral, and Double Recovery Under the MVRA

1. Burden of Proof and the MVRA Framework

Once a sentencing court has set the restitution amount, the defendant bears the burden of proving any subsequent offset. The court relied on:

United States v. Sizemore, 850 F.3d 821, 828 (6th Cir. 2017); and
United States v. Elson, 577 F.3d 713, 734 (6th Cir. 2009), abrogated in part on other grounds by Lagos v. United States, 584 U.S. 577 (2018).

The basic rationale:

The MVRA allocates burdens of proof to the parties best positioned to satisfy them.
The defendant is best situated to prove what he has already paid or what value he has already surrendered to the victim.

The Sixth Circuit reviewed the restitution award for abuse of discretion, but with de novo review of underlying legal questions, including the proper legal standard for offsets.

2. Distinguishing Guidelines Loss (U.S.S.G. § 2B1.1) from MVRA Restitution

A central theme is the sharp distinction between:

Guidelines “loss” under U.S.S.G. § 2B1.1, which affects the offense level and sentencing range; and
Restitution under the MVRA (18 U.S.C. § 3663A), which is about making the victim whole for actual monetary loss.

Under the Guidelines:

Loss is reduced by:
“the amount the victim has recovered at the time of sentencing from disposition of the collateral, or if the collateral has not been disposed of by that time, the fair market value of the collateral at the time of sentencing.”
— U.S.S.G. § 2B1.1 cmt. n.3(D)(ii)
The goal is to estimate financial harm for purposes of punishment, not to track ultimate monetary recovery.

By contrast, under the MVRA:

Restitution must reflect what the victim actually loses, net of value that has been returned.
18 U.S.C. § 3663(b)(1)(B) directs courts to reduce restitution by “the value of any part of the property that is returned.”
In cases where the “property” is money secured by real estate, the Supreme Court held in Robers v. United States, 572 U.S. 639 (2014), that the money is “returned” when the bank sells the collateral, not when it takes title.

The Sixth Circuit emphasized that these two calculations serve different purposes and are not interchangeable. The sentencing court’s error was that it treated the Guidelines framework as controlling the restitution offset—a conceptual mistake because:

Guidelines loss relates to the sentence; and
MVRA restitution relates to actual compensation to the victim and must avoid double recovery.

The court cited United States v. James, 564 F.3d 1237, 1246–47 (10th Cir. 2009), which distinguishes between Guidelines loss (for sentencing) and MVRA actual loss (for restitution).

3. The “Linking” Requirement: Tracing Collateral to the Specific Loss

Even accepting that, under Robers, post-foreclosure sales of real estate may affect restitution (because that is when “property is returned”), the Sixth Circuit set out a crucial threshold requirement:

To obtain an offset for collateral proceeds, a defendant must show that the collateral was “intended to cover the same losses that the restitution order covers.” (Sizemore, 850 F.3d at 829.)

This requirement flows from the principle against double recovery. Restitution cannot be reduced based on payments or collateral recoveries that compensate for different debts or different harms. Otherwise, the defendant would improperly use one payment to offset multiple unrelated obligations.

In Sizemore, the court denied an offset based on broad insurance settlements where the restitution order compensated specific funeral and medical expenses and lost wages; the insurance payments were not shown to cover the same specific losses.

Applying that rationale to Cross, the Sixth Circuit held:

The restitution order related specifically to losses from the fraudulent line of credit (secured by accounts receivable).
Cross was required to demonstrate that the foreclosed properties (his home and offices) were collateral for that same line of credit, not for separate loans.
SmartBank stated that while it liquidated collateral to cover Cross’s loans, it had not recovered its restitution ordered for bank fraud relating to false accounts receivable.
Cross never rebutted that point or otherwise established the necessary link.

Because he failed to trace the real estate collateral back to the specific line-of-credit loss covered by the restitution order, Cross failed the threshold linking requirement. Therefore, he could not show that, absent an offset, SmartBank would enjoy a double recovery.

4. The District Court’s Legal Error and Harmless-Error Review

The Sixth Circuit agreed that the district court’s reasoning was flawed. The district court:

Used the Guidelines collateral rule (value of collateral at sentencing) instead of the MVRA’s focus on property returned and ultimate actual loss.
Assumed that because the parties had stipulated to a loss amount, they had effectively “locked in” the value of the collateral as of sentencing, foreclosing later adjustments based on higher sale prices.

The panel expressly recognized this as an abuse of discretion because it was based on an erroneous view of the law, citing United States v. Yaker, 87 F. App’x 532, 534 (6th Cir. 2004).

However, errors can be harmless under Federal Rule of Criminal Procedure 52(a) if they do not affect substantial rights. Applying United States v. Beverly, 369 F.3d 516, 540 (6th Cir. 2004), and United States v. Bonds, 12 F.3d 540, 554 (6th Cir. 1993), the court found the error harmless because:

Even under the correct MVRA standard, Cross would still lose—he never proved the necessary link between the properties and the specific fraud-based line of credit.
Without proof that the collateral-secured loan overlapped with the restitution-covered loss, no double-recovery theory could succeed, regardless of the sales prices of the foreclosed properties.

Importantly, the Sixth Circuit also clarified what Cross could have done if the facts supported him:

He might have obtained an offset by showing:
1. That Cornerstone or SmartBank actually profited from post-foreclosure sales; and
2. That the real estate collateral secured the very line of credit for which restitution was ordered.
Because he failed step (2), the legal misstep by the district court did not change the result.

This aspect of the opinion implicitly confirms: post-foreclosure profits can, in principle, reduce restitution under Robers and the MVRA, but only when the collateral is tied to the specific loss covered by the restitution order.

B. Quashing the Subpoena to SmartBank: Relevance, Burden, and Victim Status

1. Legal Standards for Rule 17(c) Subpoenas

Rule 17(c) subpoenas for documents or testimony in criminal cases are not general discovery tools; they are limited devices for obtaining specific, relevant, and admissible evidence.

The court relied on the framework from:

United States v. Nixon, 418 U.S. 683, 699–700 (1974); and
United States v. Hughes, 895 F.2d 1135, 1146 (6th Cir. 1990).

Under these cases, a Rule 17(c) subpoena should be enforced only if:

The materials are evidentiary and relevant;
They are not otherwise reasonably obtainable in advance of trial by due diligence;
The party cannot properly prepare for trial without them; and
The request is made in good faith and is not a fishing expedition.

Additionally, Rule 17(c)(2) allows a court to quash or modify a subpoena if “compliance would be unreasonable or oppressive.” Cases like United States v. Llanez-Garcia, 735 F.3d 483, 494 (6th Cir. 2013), and In re Modern Plastics Corp., 890 F.3d 244, 251 (6th Cir. 2018), stress the need to balance:

the need for the requested discovery against
the burden on the party or non-party subject to the subpoena.

The burden is particularly concerning when the subpoena targets victims of the defendant’s crime or non-parties, as in:

United States v. Minton, 2017 WL 1078635 (E.D. Ky. Mar. 21, 2017); and
United States v. You, 2024 WL 2736200 (E.D. Tenn. May 28, 2024).

2. Successor Banks as Victims and the Alleged “Third-Party Custodian” Theory

Cross argued that SmartBank was merely a “third-party custodian” of Cornerstone’s records after the corporate merger, and thus not a victim. On that theory, he claimed the subpoena was less burdensome and more justified.

The Sixth Circuit rejected this view. Citing cases like In re Grand Jury Subpoena, 688 F. Supp. 319 (W.D. Tenn. 1988), the court recognized that:

SmartBank, as successor-in-interest to Cornerstone, stands in Cornerstone’s shoes.
It is thus the victim bank for purposes of the restitution order and enforcement.
Successor status does not deprive a bank of its victim status or immunize subpoenas from being quashed as unduly burdensome.

3. Application to Cross’s Subpoena

The district court quashed the subpoena primarily on two grounds:

Irrelevance: The subpoena targeted information about the liquidation of Cross’s collateral. But once the court denied the second offset motion—finding Cross had not linked that collateral to the restitution-covered loss—those liquidation details were no longer relevant to any live issue.
Undue burden on a victim/non-party: SmartBank is the victim bank (by succession) and had already been subjected to significant litigation and information demands. Imposing civil-discovery-like burdens via a Rule 17 subpoena was unsupported by any specific showing of evidentiary necessity.

The Sixth Circuit concluded that this decision was well within the district court’s discretion. It underscored that:

Rule 17 subpoenas are not a vehicle for wide-ranging discovery designed to re-litigate restitution.
A defendant cannot use them to impose heavy document-production and deposition obligations on a crime victim—especially when the requested materials do not relate to a viable legal theory (here, because of the failure to trace collateral to the specific loss).

Thus, the subpoena was properly quashed as seeking irrelevant information and imposing undue burden, particularly given SmartBank’s victim status and non-party posture in the post-judgment dispute.

C. Government’s Motion to Compel Post-Judgment Discovery

Finally, Cross challenged the district court’s order granting the government’s motion to compel him to respond to interrogatories and document requests about his finances.

His primary argument was procedural: the court allegedly erred by relying on findings in its earlier order denying the restitution offset when adjudicating the discovery motion.

The Sixth Circuit found this argument meritless:

Cross cited no authority suggesting that a court is barred from relying on its own prior factual or legal conclusions when dealing with related motions in the same case.
Practical considerations of judicial economy and coherence favor exactly what the district court did—using its offset analysis to inform the scope and necessity of discovery on enforcement.
The court cited Bobo v. United Parcel Serv., Inc., 665 F.3d 741, 758 (6th Cir. 2012), which itself acknowledged efficient structuring of legal analysis across related claims, even though it was later abrogated on other grounds by Univ. of Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. 338 (2013).

In short, nothing in law or logic prohibited the district court from integrating its restitution-offset findings into its analysis of the government’s motion to compel, and the Sixth Circuit saw no abuse of discretion.

V. Precedents and Their Influence on the Decision

A. United States v. Sizemore and the “Same Loss” Requirement

Sizemore is the key restitution-precedent driving the court’s reasoning. There, the defendant sought restitution offsets based on broad insurance settlements. The Sixth Circuit held that:

A defendant must show that the payments or settlements were intended to compensate for the same specific losses covered by the restitution order (e.g., the same funeral costs, the same medical bills, the same lost wages).
General payments or global settlements that are not clearly allocated to the same loss categories are insufficient to show double recovery.

Cross effectively extends and applies Sizemore to the context of collateral securing bank loans. Just as in Sizemore the insurance payments had to be traced to the same losses, in Cross the collateral (real estate) had to be traced to the same line of credit as the bank-fraud restitution. Failing that link, there is no double recovery and no offset.

B. United States v. Elson and Allocation of Burdens

Elson established that, while the government bears the burden of proving the amount of restitution at sentencing, the defendant bears the burden of proving any credits, payments, or offsets. That allocation reflects practical considerations: the defendant knows best what he has already paid or what property has been surrendered.

Cross reinforces and applies that principle. The court repeatedly notes that Cross did not carry his burden:

He did not adequately explain the bank statements he submitted.
He did not quantify how his alleged payments related to the restitution-covered line of credit.
He never proved that the foreclosed properties secured that specific fraud-tainted debt.

C. Robers v. United States and When “Property Is Returned”

In Robers, the Supreme Court held that when a victim bank receives a house as collateral for a fraudulent loan, the property is “returned” for purposes of restitution when the bank sells the house, not when it takes title.

Cross implicitly builds on that concept:

If the defendant can show that the real estate securing the loan at issue was sold after foreclosure and that the victim thereby recouped some or all of its loss, the restitution figure should, in principle, reflect that recovered value.
However, Robers doesn’t eliminate the Sizemore requirement: the collateral must relate to the same loan and loss as the restitution order.

Thus, Cross can be read as harmonizing Robers (timing and nature of “returned” property) with Sizemore (same-loss tracing requirement).

D. Subpoena and Discovery Precedents: Nixon, Hughes, Llanez-Garcia, Modern Plastics, Minton, and You

On the subpoena issue, the court relied on:

Nixon and Hughes for the baseline Rule 17(c) framework;
Llanez-Garcia and Modern Plastics for the balancing of need vs. burden and the ability to quash unreasonable or oppressive subpoenas; and
District court decisions such as Minton and You, which highlighted the particular unfairness of imposing heavy, civil-style discovery burdens on victims in criminal cases.

Cross adopts and reinforces these principles, emphasizing:

The need for specificity and relevance in subpoenas;
The heightened concern for burdens placed on victims and non-parties; and
The impropriety of using Rule 17(c) as a broad discovery device to attempt to construct a speculative restitution theory.

VI. Complex Concepts Simplified

A. Guidelines “Loss” vs. MVRA “Restitution”

Although both use the language of “loss,” they are conceptually distinct:

Guidelines loss (U.S.S.G. § 2B1.1) is an estimate used to determine the offense level and, ultimately, the advisory sentencing range. It is a sentencing tool.
MVRA restitution (18 U.S.C. § 3663A) is an obligation imposed on the defendant to repay the victim for actual, out-of-pocket financial harm—net of any value the victim has already received back (e.g., payments, collateral proceeds).

Using the wrong one to calculate the other, as the district court initially did, can lead to legal error.

B. Restitution Offsets and Double Recovery

A restitution offset is a reduction in the amount a defendant must pay to a victim, justified by proof that the victim has already:

Been compensated in some other way (insurance, settlements, payments from the defendant); or
Recouped value through sale of collateral or other property.

The law forbids double recovery—the victim cannot recover more than the actual loss. But to show double recovery, a defendant must prove that:

The payment or collateral in question compensates the victim for the same loss that the restitution order covers; and
Absent an offset, the victim would be paid twice for the same underlying harm.

C. Collateral and “Tracing”

Collateral is property pledged to secure a specific debt. In complex banking relationships, a borrower like Cross may have:

Multiple loans;
Different collateral for different loans; or
Cross-collateralization (one asset securing multiple obligations).

“Tracing” in this context means proving which loan(s) a particular asset actually secures, and how proceeds from its sale were applied. Cross teaches that the defendant must make this showing to get a restitution offset:

It is not enough to show “the bank got money from some collateral.”
The defendant must show the collateral was intended to cover the same loss that the restitution order addresses.

D. Abuse of Discretion and Harmless Error

An appellate court reviews many district court decisions (including restitution and subpoena rulings) for abuse of discretion. A decision is an abuse of discretion if:

It rests on an incorrect legal standard; or
It is clearly unreasonable, arbitrary, or unsupported by the record.

However, even if the appellate court finds an abuse of discretion, it may affirm the result if the error is harmless—that is, if correcting the error would not change the outcome or affect substantial rights. That is what happened in Cross regarding the restitution offset.

E. Successor-in-Interest

When one bank merges into another, the surviving institution (here, SmartBank) typically becomes the successor-in-interest, acquiring all rights and obligations of the merged bank. For restitution:

The successor stands in the shoes of the original victim bank.
The fact that SmartBank did not itself originate the loans does not strip it of victim status or its right to be paid restitution.

VII. Impact and Implications

A. For Defendants Seeking Restitution Offsets

Cross underscores several practical lessons:

Burden of proof is on the defendant to show any offset after restitution is ordered. That includes assembling clear documentation and explaining it coherently.
Offsets based on collateral require the defendant to:
- Show that the collateral secures the same loan as the restitution-covered loss; and
- Demonstrate how the victim applied the proceeds (and whether this reduced or eliminated the actual loss).
Merely pointing to the fact that the bank sold properties or received other payments is insufficient without detailed tracing.

The opinion also suggests that defendants may, in appropriate cases, revisit restitution if they can show that post-sentencing collateral sales resulted in the victim over-recovering, consistent with Robers—but only if they satisfy the strict tracing requirement.

B. For Victim Banks and Their Successors

For financial institutions:

The decision provides support for resisting broad Rule 17 subpoenas that resemble civil discovery and are served by fraud defendants seeking to re-litigate restitution.
It confirms that successor banks (post-merger) retain victim status and the protections that come with it, including the ability to argue undue burden when facing subpoenas.
It encourages banks to keep clear internal records of which collateral secures which obligations, which may be crucial if offset disputes arise.

C. For District Courts

The opinion carries several institutional messages for sentencing and post-judgment practice:

Courts must be careful to separate Guidelines loss calculations from MVRA restitution calculations. They may use the same numeric figure if the parties stipulate, but the underlying doctrinal frameworks differ.
When faced with offset motions, courts should explicitly ask:
1. Has the defendant shown that the collateral or payment relates to the same loss as the restitution order?
2. Has the defendant offered reliable evidence on amounts and application of proceeds?
On subpoenas, courts should enforce Rule 17’s limits and guard against using criminal subpoenas as vehicles for broad civil-style discovery, particularly against victims and non-parties.

D. For Practitioners (Defense and Prosecution)

Defense counsel should:

Anticipate the need for meticulous tracing evidence if they intend to argue that foreclosure or other recoveries fully or partly satisfy restitution.
Avoid overbroad subpoenas to victims and instead focus on specific, clearly relevant requests, backed by concrete theories of admissibility and necessity.

Prosecutors should:

Be prepared to explain the distinction between loss under the Guidelines and loss under the MVRA, especially if the parties stipulate to a single number.
Use post-judgment discovery tools to enforce restitution, and rely on opinions like Cross to resist unwarranted discovery demands or to sustain motions to compel defendant disclosures.

VIII. Conclusion

United States v. Cross clarifies and reinforces a central rule in restitution law within the Sixth Circuit’s jurisprudence:

A defendant cannot obtain a restitution offset for collateral or other recoveries unless he can trace that value to the same specific loss covered by the restitution order and demonstrate that, without an offset, the victim would receive a double recovery.

The decision also:

Draws a firm line between Guidelines loss and MVRA restitution, warning district courts against conflating the two;
Affirms robust protection for victim banks and their successors from overbroad Rule 17 subpoenas; and
Endorses the practical use of prior findings in related post-judgment rulings, such as discovery orders.

Although unpublished and not formally precedential, Cross offers a detailed and coherent framework for handling restitution offsets, collateral, and victim subpoenas in bank-fraud and similar financial-crime cases. Its reasoning is likely to be cited persuasively in future MVRA and Rule 17 disputes throughout the Sixth Circuit and beyond.