The courts seem to rule in favor of people who have restitution when it is characterized as to a particular individual. If he can get it re-characterized, for 15 million, it seems to be worth the litigation. But, he has to get it characterized from the courts.
Court case against deductions: http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=6th&navby=case&no=960016p
Cases for deductibility...note they are designated as compensatory to an individual person or organization: The courts ruled in the following cases that penalties designated as liquidated damages were deductible if they were compensatory or remedial in nature, not primitive (Middle Atlantic Distributors, 72 TC 1136 (1979); The Mason and Dixon Lines, Inc., 708 F2d 1043 (1983); Larry. D. Huff, 80 TC 804 (1983); and H.A. True, Inc., 603 F Supp 1370 (1985)). The Service also ruled, in Rev. Ruls. 69-581, 80334 and 88-46, that penalties that are remedial, rather than punitive, are deductible.
In John 77 Stephens, 905 F2d 667 (1990), the Second Circuit ruled that a taxpayer could claim a deductible loss for the return of embezzled funds to a corporation, because the restitution was to a private party and was a civil remedy ordered primarily to reimburse tire corporation's loss.
Finally, in Talley Industries, Inc., 18 Fed Appx 661 (9th Cir. 2001), the Ninth Circuit ruled that a government contractor who pled guilty to a charge of false and fraudulent statements could deduct the portion of the settlement payment that represented compensation of the government's actual loss. However, the balance of the payment could not be deducted, because the parties did not show they intended it to compensate for loss.
It is clearly not deductible by the code, but: if he wants to get it into court, he might try, and then again, he might litigate for it or get an amended or modified court order allowing it. But, that is more legal than tax.
Again, I apologize if I appeared a bit testy. It just had the look and feel of something else. It is hard to convey meaning in this venue.