Applying the Brakes on a Runaway Train: Forfeiture and Recent Supreme Court Developments
Forfeiture. Miriam-Webster defines the word as”the act of forfeiting: the loss of property or money because of a breach of a legal obligation.”Relatively straightforward. But in the legal profession, it is the part of a client’s sentencing that turns some of the finest criminal defense attorneys into frightened first-year law students. Many flee the scene or inform the client to “Jet the property go” so as not to “complicate” the matter or, as a last resort, retain someone later to deal with the issue. This article discusses some of the basics every attorney should know about forfeiture. It also examines the recent Supreme Court decision in Honeycutt v. United States and its possible ramifications.’
The modern principles of real property ownership stretch back to the Norman Conquest. Even the terms used, such as “fee simple absolute” and “indentured servant,” sound impressively ancient. But as a result of a series of federal criminal statutes, beginning with anti-racketeering laws (RICO) in 1970, and substantially expanding in 1984 with anti-drug laws, many of those seemingly permanent principles of real property ownership were thrown into question. These federal criminal statutes contain provisions authorizing the civil and criminal forfeiture of property – both real and personal property – alleged to have been involved in criminal activity. Interestingly, those new forfeiture provisions themselves have ancient sources in British admiralty law, the Magna Carta, and medieval “forfeiture of estate.” Even the bible (Exodus 21:28) authorized the forfeiture of a person’s ox if the ox gored another man or woman. But the version of forfeiture that Congress created with these statutes has far exceeded their historical antecedents. Even the most sacrosanct of all forms of real property ownership – the tenancy by the entireties, which embodies two core areas of state power, real property ownership and marriage – has been affected by federal forfeiture law. All this has led to the government collecting more than $15 billion in forfeitures in the last fiscal year alone.
1. Civil vs. Criminal Forfeiture
Two types of forfeiture exist in the federal judicial system – civil forfeiture and criminal forfeiture. Civil forfeiture proceedings are brought in rem against the property itself, which is named the defendant in the civil action, be it the contents of a bank account, stock certificates, real property, or 100 bottles of beer. This supports one of the legal fictions in the law that the property itself is guilty of criminal activity. The property is often seized under a judge-issued seizure warrant pursuant to the Admiralty Rules. The person who wants to recover the defendant property is called the claimant. The claimant must file a claim to the property and then answer the complaint in the forfeiture proceeding, much like in an ordinary civil matter.
To win a civil forfeiture case, the claimant must show that either the property is not traceable to or involved in criminal activity or, if it is, that he is an innocent owner of the property. That means the claimant must have been reasonably without cause to believe that the property was subject to forfeiture, or that the claimant was a bona fide purchaser for value who took the property without notice of illegal activity or the government’s claim.
A criminal forfeiture, in contrast, is filed in personam against the criminal defendant himself, usually asserted in one or more counts of the criminal indictment. Two main statutes, 21U.S.C. § 853 and 18 U.S.C. § 982, deal with criminal forfeiture. These statutes address issues such as the types of property subject to forfeiture, the criminal activity to which forfeiture can apply, available defenses, and when and how property can be restrained, seized, forfeited, and sold.
To assert rights to property in a criminal forfeiture case, a petitioner must wait until after the defendant is convicted and the court issues a preliminary order of forfeiture. At that point, the individual files a petition that asserts her right to the property and litigates an ancillary proceeding- civil in nature – against the government. To prevail, the petitioner must show that, at the time the criminal activity was committed, her interest in the property was superior to that of the defendant, or that she was a bonafide purchaser for value who was reasonably without cause to believe that the property is subject to forfeiture.
A primary difference between being a claimant in a civil forfeiture proceeding and being a third-party petitioner in a criminal forfeiture proceeding is that the petitioner can prevail in a criminal forfeiture case without proving that she is an innocent owner. She must, of course, have standing and a legal interest in the property. But, for her, because of the application of the relation-back doctrine in criminal forfeiture proceedings, the primary issue is when she acquired her interest in the property. I fit predates the criminal activity, she will succeed because “the interest that the government acquires when it steps into the defendant’s shoes [will be)subordinate to that of the third party.”‘In civil forfeiture, however, because the action focuses on the “guilt” of the property, the question is whether the claimant, usually the property owner, had actual or constructive knowledge of the property’s connection to the illegal activity, which the government must prove by a preponderance of the evidence. In both types of proceedings, however, the third party petitioner/claimant will prevail if she proves that she was a bona fide purchaser for value without notice.
2. Specific Property vs. Money Judgments
Forfeitable property is usually property that is involved in some way with criminal activity. However, federal law also provides an alternative method for forfeiting assets when tainted property becomes unavailable. The government may then forfeit untainted assets belonging to the defendant that are equal in value to the missing property. Such property is referred to in the statute as “substitute property.”‘ If forfeitable property has been transferred to a third-party “straw owner” to evade forfeiture, the government may follow that property into the hands of a third party.
The government has argued that the legitimacy of money judgments ~ which are a judge-made creation – has been · at least implicitly affirmed by the Advisory Committee that drafted Rule32.2 of the Federal Rules of Criminal Procedure in 2000. Although the Rule was to some extent a reworking of a subsection of an earlier version of Criminal Rule 32, it was the first time the words”money judgment” and forfeiture were found in the same sentence of an authority other than a court decision.
Rule 32.2 is important for the defendant in a criminal forfeiture case when the government seeks the forfeiture of specific property. While the Rule provides that the amount of a money judgment forfeiture will be determined by the court during the forfeiture phase of a trial, it also provides that ” [i]f the government seeks forfeiture of specific property, the court must determine whether the government has established the requisite nexus between the property and the offense.'”
The key here for defense counsel is that when the government seeks to forfeit specific property, the defendant is entitled to have the “nexus to the property” issue decided by a jury.6 As the Rule states, the decision to have a jury make the nexus determination must be made before conviction.
Electing to have the jury make the determination benefits the defendant by requiring the prosecutor to “submit a proposed Special Verdict Form listing each property subject to forfeiture and asking the jury to determine whether the government has established the requisite nexus between the property and the offense committed by the defendant:” Thus, defense counsel should put the government to its proof and, for the client’s benefit, have the jury make this determination rather than rely on the judge to see things favorably for the client.
3. Proceeds, Instrumentalities, and Relation Back
The most jarring feature of federal forfeiture law is what is known as the relation back doctrine. This states that”[a]ll right, title and interest in property[subject to forfeiture) vests in the UnitedStates upon the commission of the act giving rise to forfeiture under this section.”• The concept here is that the property never truly belonged to the defendant, so at the moment the defendant obtained or illegally used the property, it really belonged to the government.
The relation back doctrine operates differently depending on whether the basis for forfeiture is that the property is traceable to proceeds of criminal activity or was involved in the commission of the crime.
Proceeds: Real property can be forfeited if it was purchased or funded with criminal proceeds. If someone made money from stock fraud in 2010 and used it to buy a house in 2011, the government can forfeit the house because it was purchased with funds traceable to the criminal activity. As soon as the person received the fraud proceeds in 2010, that money belonged to the government. So the purchase of the home does not insulate the property from forfeiture. The government is entitled to forfeit the house.
Partial interests in property may be forfeited as well. If only some of the money used to purchase real property was derived from criminal activity, then only that portion of the property is arguably subject to forfeiture. Similarly, if the property was purchased with clean funds, but renovated with tainted funds, only the amount spent on the renovation may be subject to forfeiture. Such situations are resolved either by selling the property and paying the government its share or using other funds (such as a home equity loan) to “buy out” the government’s interest in the property.
Forfeiture of partial interests in real property can arise from mortgage payments made with illegal proceeds. This theory, which prosecutors love, is often less impressive than it sounds, as only a small portion of a typical mortgage payment is allocated to reduce the principal owed on the mortgage. Most of the payment is for interest, which goes to the bank, not to the defendant’s equity in the home.
Forfeiture of all partial interests in property, real and personal, is limited by the Excessive Fines Clause. 9 If the value of the property is grossly disproportional to the severity of the defendant’s crime, the courts are unlikely to compel a sale. For example, if the government can prove that $10,000 in tainted funds was used to buy, renovate or make payments to principal on a mortgage, and the property is worth $1 million, compelling the sale of the property to pay the$10,000 would likely be deemed in violation of the Eighth Amendment and not be permitted.
Instrumentalities: Property can also be forfeited if it is used to commit or facilitate a crime. These are known as instrumentalities of a crime, facilitating property, or property “involved in” criminal activity. With such property, the government’s interest relates back to the moment that the defendant uses the property to commit the criminal act. Typical instances of real property instrumentalities are properties used to grow, manufacture, store, or distribute illegal drugs. It also can include commercial properties used to sell or store illegal goods, or offices used to operate a fraudulent business. And, of course, the getaway car used to flee the scene of the bank robbery is an instrumentality as well.
Myth: Criminal Forfeiture Is Less Subject to Abuse Than Civil Forfeiture
When Congress enacted the CivilAsset Forfeiture Reform Act of 2000(CAPRA), it targeted civil forfeiture as the area of greatest abuse and thus in most urgent need of reform. It is easy to see why. As mentioned above, in civil forfeiture cases, the government utilizes a legal fiction and brings an in rem action against the “guilty property.” The property owner is then required to affirmatively come forward and file a claim and an answer to the forfeiture40 WWW.NACDL.ORGcomplaint to preserve her property rights. No criminal conviction, or even a criminal proceeding, is required. Indeed, even an acquittal in the criminal case does not bar a civil forfeiture proceeding arising from the same alleged conduct. And, if no claims are filed, the government keeps the property by default, a result that occurs in the vast majority of administrative and judicial civil forfeiture proceedings.
So, with the enactment of CAPRA, Congress sought to steer federal prosecutors to criminal forfeiture by making criminal forfeiture more inclusive and civil forfeiture less attractive. 10 Prior to CAFRA, there were a number of categories for which only civil forfeiture was available. CAPRA expanded criminal forfeiture to permit the government to forfeit any property that could be forfeited civilly.JI Other provisions sought to make civil forfeiture less attractive, such as a stepped-up burden of proof and the availability of market-rate attorneys’ fees for successful claimants in civil forfeiture cases rather than the far lower capped fees available under the Equal Access to Justice Act.
These statutory changes relied on the assumption that criminal forfeiture is less subject to abuse because forfeiture is part of sentencing. Although the government’s burden of proof in criminal forfeiture is the same preponderance standard as in civil forfeiture, Congress believed that the risk of abuse would be reduced because a criminal conviction was required before any property of the defendant could be forfeited in a criminal proceeding.
Unfortunately, it turned out that greater reliance on criminal forfeiture has given rise to a different set of abuses. Some of these are as serious as, if not more serious than, civil forfeiture abuse. While civil forfeiture laws -which are an offshoot of maritime law and stretch back hundreds of years to British civil law – have traditionally been strictly construed, there is no such history behind criminal forfeiture laws, which are of far more recent origin.
Abuse No.1: Consent Forfeitures
One of the most common abuses in criminal forfeiture cases involves plea agreements in which the criminal defendant enters into a consent forfeiture and agrees to forfeit property that does not belong to her. This problem arises because the criminal forfeiture statutes bar a third party from making a claim to property until after the defendant is sentenced and the property is included in a preliminary order of forfeiture.
By the time the third party can be heard in an “ancillary proceeding” where the fate of the property is determined, the property has already been”found” to be related to the defendant’s criminal activity, often on nothing more than the defendant’s consent. Making matters worse, most courts prevent the third party property owner from challenging the forfeitability of the property in the ancillary proceeding. So unless the third party fits into two narrow categories of the statute, the property will be forfeited based on nothing more than the defendant’s agreement, which is usually motivated by a desire to agree to forfeit as much property as possible to secure a lighter sentence or shorter incarceration.
Abuse No. 2: Money Judgment Forfeitures
Another area of criminal forfeiture abuse is the so-called money judgment forfeiture. This judge-made remedy permits the government to bypass the entire forfeiture process, including the right to a jury determination, and have the court essentially “pick a number” based on the evidence of how much the defendant received from the criminal activity. Money judgments excuse the government from having to prove “nexus” and show that a particular property is actually related to the criminal activity. The money judgment is entered, just like any civil judgment. The government then executes the money judgment against any property of the defendant, even untainted assets, regardless of its relationship to the criminal activity.
This result is particularly offensive because Congress provided the government with two procedures for avoiding the “tracing” requirement. First, when money and other fungible property are sought, the government need not trace it to the criminal activity. However, the statute of limitations is shortened from five years to one year. 15 Second, if the government cannot locate the tainted property because of some act of the defendant, such as liquidating it, transferring it or removing it from the jurisdiction, the government may forfeit”substitute assets,” which are any other property “of the defendant,” regardless of taint, up to the amount of the missing tainted property. 16
In 2004, a Pennsylvania district court dared to point out that money judgments are not authorized by Congress, and that “[c]ommon sense suggests that one cannot ‘forfeit’ something unless he first owns or possess it.” 11 The court distinguished substitute assets, which presuppose that I lie defendant at some point had the tainted property, but subsequently dissipated it.
The government fought the court’s decision tooth and nail, ultimately securing a reversal from the ThirdCircuit. The remaining courts addressing the issue quickly closed ranks. 18 One exception, however, came from theDistrict Court for the Eastern District of New York. In United States v. Surgent, 19 Judge John Gleeson demonstrated that money judgments are not authorized by statute. He provided a detailed, historically-based and reasoned analysis missing from Croce and the decisions affirming the validity of money judgment forfeitures. Equally important, Judge Gleeson demonstrated that the money judgment route, valid or not, should not excuse the government from having to satisfy its statutorily-mandated burden of tracing the property sought to be forfeited to the criminal activity.
In a footnote in an unrelated case, the Second Circuit acknowledged JudgeGleeson’s “thorough discussion” of the validity of money judgments but found it, “[i)n the end … unpersuasive.” 20 And with that, the Surgent decision seemingly disappeared, relegated to the cabinet of legal curiosities.
Abuse No. 3: Joint and Several Liability
At the same time, a third area of criminal forfeiture abuse was rearing its head – the imposition of joint and several liability for criminal forfeiture judgments on co-defendants alleged to be jointly involved in criminal activity. As with money judgment forfeitures, courts were convinced by prosecutors that it was appropriate and necessary to import this common law tort remedy into the statutory scheme of criminal forfeiture law to ensure that criminals did not circumvent the statute and pocket their ill-gotten gains.
Further, joint and several liability can be viewed as an extension of money judgment forfeitures, an outgrowth that could not exist without them. If there were no money judgment forfeitures, and prosecutors were always required to trace, it would be difficult for joint and several liability to come into play. If tainted property had to be traced from the criminal activity to a particular defendant, tl1erewould seem to be no basis for then draw42 WWW.NACDL.ORGing a line to a co-defendant without profiling the co-defendant actually received some of the tainted property.
With money judgments, the courts usually determine how much property the defendant obtained as proceeds of the crime or how much property was involved in a money laundering offense. Underiliose circumstances, it is a simple matter to declare that any number of defendants conspired together to obtain the proceeds or launder the property without specifying who actually received what property.
The Honeycutt Decision
The Roberts-led Supreme Court hinted at some dissatisfaction with the state of criminal forfeiture law in recent decisions,’ 1 but the rifle shot came in. its June 5, 2017, decision in Honeycutt v. United States.’ 2 Unconcerned with the fact that virtually every court of appeals that had addressed the issue had ruled otherwise,’3 the Supreme Court, in a unanimous decision, unequivocally rejected the application of joint and several liability in criminal forfeiture cases.’
The facts: The Honeycutt brothers were prosecuted under the federal drug laws for selling suspiciously large quantities of a legal product that they knew or should have known likely would have been used to manufacture meiliamphetamine. Although they were brothers, they did not profit equally from the sales of their Tennessee hardware store. Tony Honeycutt owned the store. Terry Honeycutt managed sales and inventory, but he was an employee with no ownership interest in the business.
The government sought a money judgment against each brother in the total amount of $269,751.98, which it asserted was the store’s profits from the sale of the product containing the meiliamphetamine ingredient. Tony, the store owner, pied guilty and agreed to forfeit $200,000. Terry went to trial and was convicted on 11 of 14 counts, including conspiracy and distribution. Terry was sentenced by the district court to 60 months’ imprisonment.
Although the government conceded that Terry had no ownership interest in the store and did not benefit personally from the sales that formed the basis for the forfeiture amount, the government sought to hold Terry jointly and severally liable for the entire amount of the store’s tainted profits. Therefore, the government sought a money judgment of $69,751.98 against Terry, the total alleged profits of the conspiracy less tl1e amount paid by Tony, his “cotortfeasor.” Interestingly, the district court denied the government’s forfeiture request, finding that Terry had not “personally received any profits” from the unlawful sales. The Sixth Circuit reversed, however, and Terry took the case to the Supreme Court.
The legal question presented: The Court identified the question presented as whether the criminal forfeiture statute “embraces joint and several liability for forfeiture judgment:’ The Court noted that applying this tort doctrine to criminal forfeiture “would require that each defendant be held liable for a forfeiture judgment based not only on property that he used in or acquired because of the crime, but also on property obtained by his co-conspirator.”‘5
The Court noted initially tl1at application of joint and several liability could result in the forfeiture of untainted assets, which would contravene the limitations of the criminal forfeiture statute. Further, the Court found that the statute “defines forfeitable property solely in terms of personal possession or use,” as it specifically “limits forfeiture to property the defendant ‘obtained . . . as the result of’ the crime.” Under the law and ordinary usage, the Court said, “obtaining” property means personally acquiring or securing possession of it.’6
Further, while 21 U.S.C. § 853(a)(l) provides that forfeitable property may be “obtained, direct or indirectly;’ obtaining property indirectly still requires that the defendant actually receive it. An example of receiving forfeitable property indirectly would be where funds were paid to tl1e criminal defendant through an intermediary. But the property must nevertheless be “obtained” by the defendant, not by someone else.
Finding additional confirmation of the statutory intent to require personal receipt by the defendant, the Court pointed to provisions iliat limited forfeiture of property used to facilitate a crime to “the person’s property,” and limited forfeiture of property related to a continuing criminal enterprise to “his” – i.e., the defendant’s – ‘”interest in’ the enterprise.”” The Court looks broadly at criminal forfeiture: The Court looked broadly ar § 853. The statute, the Court found, consistently separates its treatment of tainted property from that of untaintec property, a crucial distinction that is no preserved by the application of joint anc several liability.
First, the relation-back provision oi Section 853 ( c) – which vests title t” tainted property in the government upon the commission of the act giving rise to forfeiture – applies only to “tainted property obtained as the result of or used to facilitate the crime.”
Second, the pretrial freeze provision of the criminal forfeiture statute similarly applies only to property that the government proves, at a hearing, “has the requisite connection” to the charged criminal activity. Third, the statute’s provision for a rebuttable presumption that property is subject to forfeiture applies only to property “acquired by [the defendant] during the period of the violation” and where there is “no likely source for such property” other than the crime.”
Permitting the application of joint and several liability upends this statutory scheme by failing to preserve the statute’s distinction between tainted and untainted assets. It permits the forfeiture of any property of a co-defendant, regardless of its relationship to the criminal activity, as long as the codefendant is found to be jointly and severally liable for the criminal activity and there is a forfeiture judgment arising from that criminal activity.
For the Supreme Court, however, the clincher was the substitute assets provision, the sole criminal forfeiture statute that specifically authorizes the forfeiture of untainted property from a defendant. It should be recalled that the forfeiture of substitute assets is permitted, but only if sufficient tainted property of the defendant cannot be located as a result of “any act or omission of the defendant.” 29
According to the Court, the substitute assets provision
demonstrates that Congress contemplated situations where the tainted property itself would fall outside the Government’s reach. To remedy that situation, Congress did not authorize the Government to confiscate substitute property from other defendants or coconspirators; it authorized the Government to confiscate assets only from the defendant who initially acquired the property and who bears responsibility for its dissipation. Permitting the Government to force other co-conspirators to turn over untainted substitute property would allow the Government to circumvent Congress’ carefully constructed statutory scheme, which permits forfeiture of substitute property only when the requirements of §§ 853(p) and (a) are satisfied. There is no basis to read such an end run into the statute.30
The Court applies the rule of narrow construction of forfeiture statutes to criminal forfeiture: Against this statutory scheme, the government’s contention that the “bedrock principle” of joint and several liability of co-conspirators must be read into the statute rang hollow. As noted above, the principle that forfeiture statutes must be strictly construed is largely a civil in rem forfeiture principle that has rarely been applied in the criminal forfeiture context. But that is precisely what the Supreme Court did in Honeycutt.
The Court pointed out that forfeiture was historically civil in nature. Traditional forfeiture law kept a strict boundary between in rem civil proceedings and any related in personam crin1inal proceeding.” With the enactment of the crin1inal forfeiture provision of Section 853, “Congress altered this distinction .. . by effectively merging the in rem forfeiture proceeding with the in personam criminal proceeding and by expanding forfeiture to include not just the ‘thing’ but ‘property … derived from … any proceeds’ of the crime.”
The Court’s point was that Congress may have “altered” the distinction between civil in rem forfeiture and in personam criminal proceedings, but Congress did not eliminate that distinction. Criminal forfeiture is derived from civil forfeiture and subject to the same limitations:
[A]s is clear from its text and structure, § 853 maintains traditional in rem forfeiture’s focus on tainted property unless one of the preconditions of § 853 exists. For those who find it relevant, the legislative history confirms as much: Congress altered the traditional system in order to “improv[.e] the procedures applicable in forfeiture cases.” By adopting an in personam aspect to criminal forfeiture, and providing for substitute-asset forfeiture, Congress made it easier for the Government to hold the defendant who acquired the tainted property responsible. Congress did not, however, enact any “significant expansion of the scope of property subject to forfeiture.” 31
Thus, the Supreme Court held that joint and several liability does not apply to criminal forfeitun~. Only assets obtained directly or indirectly by a defendant are subject to forfeiture.
Implications of Honeycutt
The Supreme Court’s conclusion that, with t11e passage of the criminal forfeiture laws, “Congress did not … enact any significant expansion of the scope of property subject to forfeiture” should apply equally to money judgment forfeitures, which have no basis in traditional civil forfeiture law. With Honeycutt, the Supreme Court has placed criminal forfeiture in the same context of forfeiture jurisprudence as civil forfeiture. Criminal forfeitures should be disfavored, just like civil forfeiture. Criminal forfeiture statutes should be narrowly construed, just like civil forfeiture statutes.
Money judgment forfeitures are just as inconsistent with the statutory scheme as joint and several liability. And the invalidity of money judgment forfeitures is proven with the same provisions cited by the Supreme Court to prove the invalidity of joint and several liability, particularly the substitute asset provision, which serves the same purpose that the government claims can only be. satisfied by a money judgment. Notably, these are some of the same provisions relied upon by Judge Gleeson in Surgent in finding that money judgments contravene Congress’ statutory scheme for criminal forfeiture.
In Surgent, Judge Gleeson rejected the numerous cases approving money judgment forfeitures because they all relied to some degree on “the novel proposition that a remedy or sanction not expressly forbidden by Congress is thereby authorized by it.”” The reasoning rejected by Judge Gleeson, that any forfeiture remedy not specifically barred by Congress is permissible, is the same reasoning the courts have cited for applying joint and several liability that has now been rejected by the Supreme Court in Honeycutt. The standard is not whether Congress has forbidden a remedy, but whether it has specifically authorized it. That is a test – now the law of the land – that applies to all forfeiture sanctions or remedies, civil or criminal.”
The coup de grace of the Honeycutt decision is a footnote rejecting the government’s reliance on Section 853( o ), which states that “the provisions of[§ 853] shall be liberally construed to effectuate its remedial purposes:”s The Court’s response to the government’s argument was that “the Court cannot construe a statute in a way that negates its plain text, and here, Congress expressly limited forfeiture to tainted property that the defendant obtained …. [T]hat limitation is incompatible with joint and several liability.”
Section 853(0) is the provision cited by every court that has authorized money judgment forfeitures. As the Supreme Court correctly found, that provision is not a license for applying the criminal forfeiture laws in direct contravention of their plain meaning.
Criminal forfeiture statutes require the government to trace the property sought to be forfeited to a particular defendant. Both money judgments and joint and several liability contravene this requirement. If, after Honeycutt, prosecutors are finally required to satisfy the tracing requirement, the abuse of criminal forfeiture should be markedly reduced. If not, perhaps the Supreme Court will take on money judgments directly, leading them to the same demise as joint and several liability.
Eric M. Wagner, an associate to Mr. Kessler, assisted in the preparation of this article.
- For in-depth analysis and discussions of the topics related to forfeiture, see Mr. Kessler’s treatises, Civil and Criminal Forfeiture: Federal and State Practice (WestGroup 1993 & 2017 Supp.) and New York Civil and Criminal Forfeitures (LexisNexis 2017).
- United States v.Lavin,942 F.2d 177, 185 (3d Cir. 1991)
- 21 U.S.C. § 853(c).
- FED. R. CRIM. P. 32.2(b)(l )(A).
- “In any case tried before a jury, if the indictment or information states that the government is seeking forfeiture, the court must determine before the jury begins deliberating whether either party requests that the jury be retained to determine the forfeitability of specific property if it returns a guilty verdict.” FED. R. CRIM. P. 32.2(b)(5)(A). The government may request this determination as well.
- FED. R. CRIM. P. 32.2(b)(5)(8).
- 21 U.S.C. § 853(c); 21 U.S.C. § 881 (h) (relating to drug crime-related forfeitures).
- The Excessive Fines Clause applies in both civil and criminal forfeiture cases. See United States v. Bajakajian, 524 U.S. 321 (1998).
- See United States v. Capoccia, 503 F.3d 103, 116 (2d Cir. 2007) (Sotomayor, J.) (CAFRA’s expansion of criminal forfeiture was intended “to prevent abuse of the civil forfeiture process … by encouraging the government to seek forfeiture through criminal proceedings, where it would have to link targeted property to a specific WWW.NACDL.ORG criminal conviction”) (citing H.R. Rep. 016- 192, at 8 (1999); 146 Cong. Rec. 51753-02; CAFRA § 16, 114 Stat. at 221 (“Encouraging Use of Criminal Forfeiture as an Alternative to Civil Forfeiture”).
- ” See 28 U.S.C. § 2461(c) (“If a forfeiture of property is authorized in connection with a violation of an Act of Congress, and any person is charged in an indictment or information .with such violation but no specific statutory provision is made for criminal forfeiture upon conviction, the government may include the forfeiture in the indictment or information in accordance with the Federal Rules of Criminal Procedure, and upon conviction, the court shall order the forfeiture of the property in accordance with the procedures [for criminal forfeiture] … in 21 U.S.C. § 853 …. “).
- Compare United States v. One 7 936 Model Ford V-8 De Luxe Coach, Motor No. 78-330657 7, 307 U.S. 219, 226 (1939) (“Forfeitures are not favored; they should be enforced only when within both letter and spirit of the law”) with United States v. Russello, 464 U.S. 16, 20 (1983) (in criminal forfeiture case under the Racketeer Influenced and Corrupt Organizations Act, rejecting petitioner’s argument that “criminal forfeitures are disfavored” and that criminal forfeiture statutes should be “strictly construed” against the government).
- See 21 U.S.C. § 853(k).
- See United States v. Nicoll, 2015 WL 13628130 (D.N.J.Apr.29,2015) (conditionally dismissing third-party petition); id., 2015 WL 4251088 (D.N.J. July 9, 2015) (confirming dismissal upon government showing of nexus); id., 2015 WL 4251134 (D.N.J. July 9, 2015) (denying petitioner’s motion to reconsider dismissal); id., 2017 WL 4769032 (D.N.J. Feb. 21, 2017) (denying petitioner’s motion for reconsideration of final order of forfeiture); United States v. Nicoll, 2017 WL 43100005 (3d Cir. Sept. 28, 2017) (affirming dismissal of third-party petition), petition for rehearing or rehearing en bane denied (3d Cir. Nov. 28, 2017). A petition for certiorari to the U.S. Supreme Court is pending.
- 18 u.s.c. § 984.
- 21 U.S.C.§853(p).
- United States v. Croce, 334 F. Supp. 2d 781, 785 (E.D. Pa.), amended on reconsideration, 345 F. Supp. 492 (E.D. Pa. 2004), reconsideration denied, 355 F. Supp. 2d 774 (E.D. Pa. 2005), reversed and remanded, 209 Fed. Appx. 208 (3d Cir. 2006).
- See, e.g., United States v. Day, 524 F.3d 1361 (D.C. Cir. 2008); United States v. Casey, 444 F.3d 1071 (9th Cir. 2006); United States v. Hall, 434 F.3d 42 (1st Cir. 2006); United States v. Poulin, 690 F. Supp. 2d 415 (E.D. Va. 201 O); United States v. Salvagno, 2006 WL 2546477 (N.D.N.Y. Sug. 28, 2006); see also United States v. Blackman, 746 F.3d 137 (4th Cir. 2014) (upholding validity of money judgments without reference to Croce); United States v. Hampton, 732 F.3d 687, 691-92 (6th Cir. 2013) (same); United States v. Padron, 527 F.3d 1156 (11th Cir. 2008) (same); United States v. Jarvis, 499 F.3d 1196 (10th Cir. 2007) (same). Before reversing Croce, the Third Circuit rejected Croce’s determination regarding the invalidity of money judgment forfeitures in United States v. Vampire Nation, 451 F.3d 189 (3d Cir. 2006).
- United States v. Surgent, _ F. Supp. 2d __, 2009 U.S. Dist. LEXIS 72563, 2009 WL 2525137 (E.D.N.Y. Aug. 17, 2009) (Gleeson, J.).
- United States v. Awad, 598 F.3d 76, 79 n.5 (2d Cir.2010).The Second Circuit in Awad stated that”we join our sister courts of appeal in holding that § 853 permits imposition of a money judgment on a defendant who possesses no assets at the time of sentencing.” 598 F.3d at 78 (citations omitted).
- See,e.g.,Luis v. United States,578 U.S. _, 136 S. Ct. 1083 (Mar. 30, 2016). Luis resolved a split in the circuits in holding that criminal forfeiture law does not permit the pretrial restraint of substitute property, i.e., property not shown to be proceeds of or involved in criminal activity. See also United States v. Chamberlain, 868 F.3d 290, 297 (4th Cir. 2017), in which the circuit court held that “Section 853(e) does not by its terms permit pretrial restraint of substitute assets” and expressly overruled Billman and the quarter-century of decisions from the Fourth Circuit adhering to Billman.
- Honeycutt v. United States, 137 5. Ct. 1626, 581 U.S. _, 2017 WL 2407468 (June5,2017).
- The Supreme Court noted that the Second, Third, Fourth and Eighth Circuits had held in favor of applying joint and several liability to criminal forfeitures, while the D.C. Circuit had ruled against application of the doctrine. See Honeycutt, 2017 WL 2407468, *4 n.1 (citing United States v. Cano-Flores, 796 F.3d 83, 91 (D.C. Cir. 2015); United States v. Van Nguyen, 602 F.3d 886, 904 (8th Cir. 201 O); United States v. Pitt, 193 F.3d 751, 765 (3d Cir. 1999); United States v. Benevento, 836 F.2d 129, 130 (2d Cir. 1988) (per curiam)). The Sixth Circuit also ruled in favor of joint and several liability in Honeycutt itself, the decision reversed by the Supreme Court. See United States v. Honeycutt, 816 F.3d 362 (6th Cir. 2016).
- Justice Gorsuch took no part in the decision.
- Honeycutt v. United States, 2017 WL 2407468, *4.
- /d.,2017WL 2407468, *6.The Court even cited the dictionary definition of “obtain” from 1966, when Section 853 was enacted, as well as a 1933 edition of the unabridged Oxford English Dictionary, the current edition of Black’s Law Dictionary, and a recent decision of its own. Not surprisingly, the Court found that the definition of “obtain” has remained constant through the decades. Id. (citing Random House Dictionary of the English Language 995 (1966); 7 Oxford English Dictionary 37 (1933); Black’s Law Dictionary 1247 (10th ed. 2014); Sekhar v. United States, 570 U.S._, 133 S. Ct. 2720 (2013) (“Obtaining property requires .. . ‘the acquisition of property.'”)).
- Honeycutt v. United States. 20 7 WL 2407468, *6 (citing 2i U.S.C. §§ 853 ;, . 2·- (3)).
- Honeycutt v. United States. 2017 WL 2407468, *7 (citing 21 U.S.C §§ 853(c) (relation back);§ 853(e)(1)(pretrial restraint);§ 853(d) (rebuttable presumption); Luis v. United States, 136 5. Ct.at 1090 (relation back applies only to tainted property); Kepley v. United States, 571 U.S. ___, 134 5. Cc 1090 1095 & n.11 (2014)) (“forfeiture applies only to specific assets”)).
- Honeycutt v. United States 2017 : WL 2407468, *8.
- Honeycutt v. United States WL 2407468, *9 (quoting The Palmyra 12 Wheat 1, 14-15 (1827) (“[t)he thing :w?.s: primarily considered as the offender, or rather the offence [was] attached primarily to the thing. [The forfeiture] “proceeding in rem st[ood) independent of, and wholly unaffected by any criminal proceeding in personam” against the defendant)).
- Honeycutt v. United States, 2017 WL 2407468, *9 (quoting S. Rep. 98-225).
- United States v. Surgent, 2009 U.S. Dist. LEXIS 72563, *47.
- Although the general applicability of Honeycutt would seem to be indisputable, there appear to be some courts that are slow to come aboard. See, e.g., United States v. Mcintosh, 2017 U.S Dist. Lexis 125261, 2017 WL 3396429 (S.D.N.Y. Aug. 8, 2017) (Stein, J.), appeal filed, (2d Cir. Aug. 24, 2017), where the court held that Honeycutt’s bar on joint and several liability in criminal forfeiture applied only to drug-related prosecutions under § 853. This is clearly a minority view and seems unlikely to survive. See, e.g., United States v. Carlyle, __ Fed, App’x __, 2017 WL 4679564 (11th Cir.Oct. 18, 2017); United States v. Gjell 867 F.3d 418, 427-28 & n.16 (3d Cir. 2017) (“Honeycut applies with equal force to a forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C)”).
- Honeycutt v. United States, 2017 WL 2407468, *9, n.2 (quoting 21 U.S.C § 853(o)).