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GLENN B. McCORMICK

Acting United States Attorney

District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 014249, kevin.rapp@usdoj.gov) MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov) PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov) ANDREW C. STONE (Ariz. Bar No. 026543, andrew.stone@usdoj.gov) Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

DAN G. BOYLE (N.Y. Bar No. 5216825, daniel.boyle2@usdoj.gov) 

Special Assistant U.S. Attorney

312 N. Spring Street, Suite 1400

Los Angeles, CA 90012 Telephone (213) 894-2426

KENNETH POLITE

Assistant Attorney General 

Criminal Division, U.S. Department of Justice

REGINALD E. JONES (Miss. Bar No. 102806, reginald.jones4@usdoj.gov) Senior Trial Attorney, U.S. Department of Justice

Child Exploitation and Obscenity Section 950 Pennsylvania Ave N.W., Room 2116

Washington, D.C. 20530

Telephone (202) 616-2807 

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

v. 

Michael Lacey, et al.,

Defendants.

No. CR-18-422-PHX-SMB

UNITED STATES’ SUPPLEMENTAL 

TRIAL MEMORANDUM 

REGARDING CRIMINAL 

FORFEITURE

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MEMORANDUM OF POINTS AND AUTHORITIES

INTRODUCTION

In addition to setting forth criminal charges, the First Superseding Indictment

(“FSI”) in this action contains a number of criminal forfeiture allegations. This 

supplemental memorandum sets forth the procedures that would apply at the criminal 

forfeiture phase of trial, in the event that any of the defendants are found guilty of one or 

more associated counts. Pursuant to these procedures, the Court or jury would then 

determine whether such a defendant’s interest in the associated property identified in the 

forfeiture allegations of the FSI, as well as any related Bill of Particulars,1 should be 

forfeited. As of the date of this filing, Defendants have not indicated whether they intend

to retain the jury for forfeiture following any conviction on the offenses in the FSI.

FORFEITURE PROCEDURES

A. Overview of Criminal Forfeiture

Criminal forfeiture is imposed on a convicted defendant as part of sentencing, and 

is not an element of the underlying substantive offense. See Libretti v. United States, 516 

U.S. 29, 39 (1995) (“Our precedents have likewise characterized criminal forfeiture as an 

aspect of punishment imposed following conviction of a substantive criminal offense.”); 

United States v. Feldman, 853 F.2d 648, 662 (9th Cir. 1988) (holding that “trial courts 

should bifurcate forfeiture proceedings from ascertainment of guilt, requiring separate jury 

deliberations”). Criminal forfeiture is an important sentencing tool, carrying into effect 

Congressional intent to deprive criminals and criminal organizations of the 

instrumentalities and profits of their illegal conduct. See Kaley v. United States, 571 U.S. 

320, 323 (2014) (forfeiture serves to punish the wrong-doer, deter future illegality, lessen 

the economic power of criminal enterprises, compensate victims, and support law 

1 This includes any Trial Bill of Particulars conformed to the counts of conviction 

(“TBOP”). Because the specific counts of any conviction have the potential to substantially 

alter the scope of property to be forfeited, the government anticipates filing a TBOP 

following any conviction in order to clarify the specific property alleged to be subject to 

forfeiture based on the counts of conviction. 

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enforcement activities such as police training).

In addition, through the remission and restoration processes, criminal forfeiture aids 

in providing justice to victims, by permitting the government to use forfeited criminal 

assets to satisfy orders of restitution. See United States v. Carter, 742 F.3d 440, 446 (9th 

Cir. 2014) (“[T]he Government may choose to assign forfeited proceeds to victims”);

18 U.S.C. § 981(e)(6) (Government may transfer forfeited property “as restoration to any 

victim of the offense giving rise to the forfeiture”); 21 U.S.C. § 853(i)(1) (Government 

may “restore forfeited property to victims”).

Criminal forfeiture is in personam, in that it may be imposed only after a criminal 

conviction and applies only to the property belonging to the convicted defendant. United 

States v. Lazarenko, 476 F.3d 642, 647 (9th Cir. 2007); United States v. Louthian, 756 F.3d 

295, 307 n.12 (4th Cir. 2014) (criminal and civil forfeiture are “distinct law enforcement 

tools” -- the former is an in personam action that requires a conviction, and the latter is an 

in rem action against the property itself); United States v. Vampire Nation, 451 F.3d 189, 

202 (3d Cir. 2006) (distinguishing civil and criminal forfeiture). Finally, the extent of 

criminal forfeiture is determined by the underlying count of conviction, in that the 

forfeiture must correspond in nature and scope to the underlying criminal conduct for 

which the defendant was convicted. See United States v. Messino, 382 F.3d 704, 714 (7th 

Cir. 2004).

B. The Property Sought for Forfeiture

In the event of any defendant’s conviction on an associated count in the FSI, the 

government intends to seek forfeiture of the property set forth in the FSI and related Bills 

of Particulars (including as may be further identified in a TBOP following any conviction). 

In addition, the government separately may seek an order of restitution and/or a money 

judgment of forfeiture, in amounts to be determined following trial, neither of which are 

questions for the jury and both of which the Court may address at or prior to sentencing. 

See 18 U.S.C. §§ 3663, 3663A (Court determines restitution order amount as part of 

sentencing); see also United States v. Lo, 839 F.3d 777, 795 (9th Cir. 2016) (“Federal Rule 

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of Criminal Procedure 32.2 does not require a jury determination for forfeiture in the form 

of a personal money judgment.”). 

C. Relevant Statutes Permitting Criminal Forfeiture

Forfeiture Authority Based on Travel Act Offenses – 18 U.S.C. § 981(a)(1)(C) and 28 

U.S.C. § 2461(c)

Section 981(a)(1)(C) of Title 18 of the United States Code and section 2461(c) of 

Title 28 of the United States Code authorize the criminal forfeiture of any property, real or 

personal, which constitutes or is derived from proceeds obtained directly or indirectly as 

the result of certain violations, including violations of the provisions of the Travel Act, 

codified in 18 U.S.C. §§ 1952. 

Forfeiture Authority Based on Money Laundering Offenses – 18 U.S.C. § 982(a)(1)

Section 982(a)(1) of Title 18 of the United States Code authorizes the criminal 

forfeiture of any property, real or personal, that was involved in a violation of 18 U.S.C. 

§§ 1956 or 1957, or any property traceable to such property.

D. Criminal Forfeiture Procedures

Forfeitability of Property Sought for Forfeiture

The government is required to provide notice of its intent to seek forfeiture in the 

indictment or information. See Fed. R. Crim. P. 32.2(a) (“A court must not enter a judgment 

of forfeiture in a criminal proceeding unless the indictment or information contains notice 

to the defendant that the government will seek forfeiture of property as part of any sentence 

in accordance with the applicable statute.”). The FSI, as well as the previously-filed First 

and Second Bills of Particulars (Docs. 281, 820), have provided such notice, and this notice 

may be supplemented with a TBOP, as necessary following any conviction.

Following conviction, forfeitability of property sought for forfeiture is determined 

either by the Court or the jury,2 depending on the election of either party. Rule 32.2(b)(1) 

2 The right of either party to retain the jury to determine the forfeitability of real or 

personal property sought for forfeiture is set out at Rule 32.2(b)(5)(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 

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provides:

(A) Forfeiture Determinations. As soon as practical after a verdict or finding 

of guilty, or after a plea of guilty or nolo contendere is accepted, on any count 

in an indictment or information regarding which criminal forfeiture is sought, 

the court must determine what property is subject to forfeiture under the 

applicable statute. If 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. If the government seeks a 

personal money judgment, the court must determine the amount of money 

that the defendant will be ordered to pay.

The jury or Court’s forfeiture determination may be based upon evidence already in 

the record, and on any additional evidence or information submitted by the parties during 

the forfeiture phase and accepted by the Court as relevant and reliable. See Fed. R. Crim. 

P. 32(b)(1)(B); United States v. Capoccia, 503 F.3d 103, 109 (2d Cir. 2007) (finder of fact 

may rely on evidence from the guilt phase; it is not necessary for the government to 

reintroduce that evidence in the forfeiture phase). To the extent that the government offers 

new evidence during the forfeiture phase, reliable and relevant hearsay evidence is 

admissible, as the forfeiture phase of the trial is merely a part of the sentencing process. 

See United States v. Ali, 619 F.3d 713, 720 (7th Cir. 2010) (because forfeiture is part of 

sentencing, less stringent evidentiary standards apply in the forfeiture phase of the trial; the 

evidence need only be “reliable”); Capoccia, 503 F.3d at 109 (Rule 32.2(b)(1) allows the 

court to consider “evidence or information,” making it clear that the court may consider 

hearsay; this is consistent with forfeiture being part of the sentencing process where 

hearsay is admissible); United States v. Creighton, 52 Fed. Appx. 31, 35-36 (9th Cir. 2002) 

(hearsay is admissible at sentencing and therefore may be considered in the forfeiture 

phase).

requests that the jury be retained to determine the forfeitability of specific property if it 

returns a guilty verdict.”).

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In the event that either party “timely requests to have the jury determine forfeiture, 

the government must 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.” Fed. 

R. Crim. P. 32(b)(5)(B).3

As of the date of this filing, Defendants have not indicated whether they intend to 

retain the jury in the event of any of their conviction on the offenses set forth in the FSI.

Procedural Rules for the Forfeiture Phase and Entry 

of a Preliminary Order of Forfeiture

As indicated above, Rule 32.2(a) requires that the determination of what property is 

subject to forfeiture under the applicable statute be determined “as soon as practicable after 

a finding of guilty.” 

The standard of proof regarding the criminal forfeitability of property is 

preponderance of the evidence. United States v. Garcia-Guizar, 160 F.3d 511, 518 (9th 

Cir. 1998) (preponderance standard is constitutional because criminal forfeiture is not a 

separate offense, but only an additional penalty for an offense that was established beyond 

a reasonable doubt); United States v. Hernandez-Escarsega, 886 F.2d 1560, 1576-77 (9th 

Cir. 1989) (interpreting identical language in 21 U.S.C. § 853, the forfeiture statute 

applicable to most criminal forfeiture proceedings).

At the forfeiture stage, a defendant is not permitted to relitigate the legality of his or 

her conduct or otherwise attempt to undermine the jury’s finding of guilt. United States v. 

Warshak, 631 F.3d 266, 331 (6th Cir. 2010) (affirming district court’s refusal to let 

defendant introduce evidence tending to show his conduct was not illegal, and holding that 

in the forfeiture phase the only question is the nexus between the conduct and the offense). 

The only question to be determined during the forfeiture phase is whether the evidence 

submitted during the guilt phase, together with any additional evidence received during the 

3 Because the scope of any special verdict form will be determined largely by the counts of conviction, the government intends to submit a proposed special verdict form and jury instructions following a jury verdict in the guilt phase. 

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forfeiture phase, establishes by a preponderance of the evidence that there is the requisite 

nexus4 between the underlying crime(s) of conviction and the property sought to be 

forfeited by the government.5

If the jury finds that there is such a nexus, the Court must promptly enter a 

preliminary order of forfeiture (the “preliminary order”). See Fed. R. Crim. P. 

32.2(b)(2)(A) (“If the [finder of fact] finds that the property is subject to forfeiture, [the 

court] must promptly enter a preliminary order of forfeiture ... directing the forfeiture of 

specific property.”); United States v. Monsanto, 491 U.S. 600, 607 (1989) (“Congress 

could not have chosen stronger words to express its intent that forfeiture be mandatory in 

cases where the statute applied.”); United States v. Newman, 659 F.3d 1235, 1240 (9th Cir. 

2011) (“When the Government has met the requirements for criminal forfeiture, the district 

court must impose criminal forfeiture, subject only to statutory and constitutional limits”); 

id. (“[T]he district court has no discretion to reduce or eliminate mandatory criminal 

forfeiture”).

While the preliminary order forfeits the defendant’s interest in the property, it does 

not include a determination as to the ownership of the property subject to forfeiture. That 

4 This nexus is defined by statute for each offense for which forfeiture is authorized. 

See e.g., Capoccia, 503 F.3d at 115 (“The ‘requisite nexus’ for a violation of 18 U.S.C. 

§ 2314 is set forth in 18 U.S.C. § 981(a)(1)(C), which subjects to civil forfeiture ‘[a]ny 

property, real or personal, which constitutes or is derived from proceeds traceable to a 

violation of [various sections of Title 18] or any offense constituting ‘specified unlawful 

activity’ (as defined in section 1956(c)(7) of this title), or a conspiracy to commit such 

offense.’”). Other circuits define this nexus as a connection between the property and the 

offense “more than incidental,” but “need not be substantial.” See Seventh Circuit Model 

Instruction, “Nexus Instruction,” available at http://www.ca7.uscourts.gov/pattern-juryinstructions/7th_criminal_jury_instr.pdf, at p. 264

5 “[F]or example, if the Government is seeking to forfeit the vessel that the 

defendant used to smuggle drugs, either party may request that the jury be retained to 

determine whether the Government has established the factual nexus between the vessel 

and the particular offense on which the defendant was found guilty. In other words, the 

jury would have to determine whether the vessel was ‘used to commit or to facilitate the 

commission” of the defendant’s offense.’” Stefan Cassela, Asset Forfeiture Law in the 

United States, § 18-4(a). 

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determination is deferred to the ancillary proceedings that follow the entry of the 

preliminary order, in which any third-party interests in the property are considered and 

resolved. See Advisory Committee Notes to Federal Rule of Criminal Procedure 32.2 

(2000 Adoption) (“Under [the statutory forfeiture scheme first enacted in 1984,] the court 

orders the forfeiture of the defendant’s interest in the property - whatever that interest may 

be -- in the criminal case. At that point, the court conducts a separate proceeding in which 

all potential third party claimants are given an opportunity to challenge the forfeiture by 

asserting a superior interest in the property. This proceeding does not involve re-litigation 

of the forfeitability of the property; its only purpose is to determine whether any third party 

has a legal interest in the forfeited property.”); United States v. Nava, 404 F.3d 1119, 1132 

(9th Cir. 2005) (district court properly instructed jury that questions of ownership “were 

not before them”). 

Because the determination of whether a third party has a legal interest in the 

forfeited property is made at a separate proceeding, a defendant cannot object to the entry 

of a preliminary order on the ground that the property at issue does not belong to him. 

United States v. Schlesinger, 396 F. Supp. 2d 267, 273 (E.D.N.Y. 2005); United States v. 

Nicolo, 597 F. Supp. 2d 342, 346 (W.D.N.Y. 2009) (in the forfeiture phase of the trial, the 

court “is not to consider potentially thorny issues concerning third party ownership of 

property sought to be forfeited”; if the government establishes the required nexus to the 

offense, the property must be forfeited).

//

//

//

//

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CONCLUSION

The government requests that the Court follow the above procedures in the event 

that any Defendant is found guilty of one or more offenses alleged in the FSI. Should any 

defendant be so convicted and either party requests to retain the jury to determine 

forfeiture, the government will submit proposed jury instructions and a special verdict 

form.

Respectfully submitted this 1st day of September, 2021.

GLENN B. McCORMICK

Acting United States Attorney District of Arizona

s/Dan G. Boyle DAN G. BOYLE

Special Assistant U.S. Attorney

KEVIN M. RAPP

MARGARET PERLMETER

PETER S. KOZINETS

ANDREW C. STONE

Assistant U.S. Attorneys

KENNETH POLITE

Assistant Attorney General 

Criminal Division, U.S. Department of Justice

REGINALD E. JONES

Senior Trial Attorney

U.S. Department of Justice, Criminal Division

Child Exploitation and Obscenity Section

CERTIFICATE OF SERVICE

I hereby certify that on this same date, I electronically transmitted the attached 

document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a 

Notice of Electronic Filing to the CM/ECF registrants who have entered their appearance 

as counsel of record.

s/ Marjorie Dieckman U.S. Attorney’s Office

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