Arsonist Must Pay Restitution to Insurer

Yes, Insurance Company is a Victim of an Arson

Post 4815

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In September 2019 Otho Harris visited a Boost Mobile store for assistance with his broken cellphone. He became enraged when he was told that it could not be repaired. He returned in the middle of the night and set fire to the store, causing extensive damage. Harris was charged with arson in violation of 18 U.S.C. § 844(i). After difficult relationships with three different appointed attorneys, he opted to represent himself and eventually pleaded guilty. He was sentenced to eight years in prison and ordered to pay $195,701 in restitution.

In United States of America v. Otho Harris, No. 23-1294, USCA, Seventh Circuit (May 23, 2024) the USCA resolved the restitution order.


Harris challenged only the restitution order, arguing that it was not supported by a proper investigation and determination of the loss amount. The pre-sentence report (“PSR”) and the government’s written version of the offense incorporated a 13-page insurance claim prepared by the victim’s insurer itemizing the losses from the fire. Harris did not object to this accounting of the loss amount. Quite the opposite: he had an opportunity to review these materials before sentencing, assured the judge that he had done so, and affirmed the accuracy of the factual material in the PSR.


In December 2019 a federal grand jury returned an indictment charging Harris with one count of arson in violation of § 844(i). After holding a hearing on the motion of the third appointed defense lawyer, the judge determined that Harris knowingly and voluntarily waived his right to counsel and could represent himself.

Over the next year Harris agreed to plead guilty and signed a written plea agreement with the government. He acknowledged in the agreement that his sentence must include an order of full restitution to the victims of the crime (including insurance companies) in an amount to be determined by the court. The judge accepted his guilty plea and set the case for sentencing.


The probation office filed a pre-sentence report about a month before the sentencing hearing. It included a description of the financial impact of Harris’s crime on two victims- the owner of the Boost Mobile store and his insurer-in the total amount of $195,701. The PSR incorporated the insurance company’s 13-page claim report, a copy of which was attached to the government’s written version of the offense. This document provided a detailed itemization of the store’s losses, which included telecommunications devices and accessories for sale, business equipment, and office fixtures.

The available insurance coverage was just $35,000, which the insurer reached after appraising 33 of 104 items included in the claim. The insurance company paid its full policy limit to the store owner, so the probation officer recommended that the court order Harris to pay $35,000 to the insurer and the balance- $160,701-to the store owner.

The judge imposed a sentence of eight years in prison. The judge also adopted the PSR’s restitution figures and ordered Harris to pay restitution in the total amount of $195,701-$35,000 to the insurer and the balance to the store owner.


The government maintains that Harris waived his right to challenge the restitution order by expressly affirming the accuracy of the factual material in the PSR at the sentencing hearing.

Particularly relevant to this case, the Seventh Circuit had previously opined that a criminal defendant waives the right to contest the judge’s factual findings at sentencing when he expressly states on the record that he has no objection to the findings.

The judge began the sentencing hearing by confirming that Harris had received and reviewed both the PSR and the government’s written version of the offense, which included a copy of the itemized insurance claim detailing the losses from the fire damage. The judge also confirmed that Harris had no objections or arguments in opposition to the factual matters in the PSR.


The Seventh Circuit recognized that resolving waiver questions does not require a rigid analysis. Harris’s conduct at the sentencing hearing was based on a month’s time to review the PSR and the incorporated insurance accounting, which detailed the restitution amount recommended by the government and the probation officer.

Here the judge relied on information presented by the probation officer, as required by statute, and accepted the itemized claim accounting from the insurance company as a reasonable measure of the losses from the fire. There was no basis to reverse as a plain error.


Arson is a vicious crime where firefighters and passers-by are injured or die. Mr. Harris was lucky that his vicious act only damaged property not people and he would only serve 8 years in prison and make restitution to the victims of his crime, the Boost store, its owner and the insurer that paid its limit to the store owner. I have heard judges, in the last 55 years of my career in insurance, say that insurers cannot be victims of a crime of arson. Reality and the Seventh Circuit concluded that the insurer is a victim entitled to restitution.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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