Most of the money covers the cost of the hunt for Jeffrey Stenroos' supposed assailant, the Los Angeles Times reported. More than 500 police officers were involved in an hours-long search for the non-existent gunman Jan. 11, 2011.
"It's highly unusual to receive such a large amount in a lump sum, but we welcome receiving the money," said Chief Deputy City Attorney William Carter, who said the money is to be paid Wednesday.
Stenroos has been sentenced to five years in prison for insurance fraud and faking evidence. Superior Court Judge Richard Kirschner said Stenroos would be allowed to remain out on bail pending appeal because of the restitution.
A police detective testified that Stenroos said he shot himself accidentally while cleaning his weapon. Other investigators have suggested he deliberately shot himself in a bid for attention.
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