FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

Plaintiff-Appellee,

No. 08-50415

v.

D.C. No. RICHARD I. BERGER,

 2:00-cr-00994- Defendant, RMT-1

v. OPINION

CORNELLA BERGER,

Third-Party Movant-Appellant. 

Appeal from the United States District Court

for the Central District of California

Robert M. Takasugi, Senior District Judge, Presiding

Argued and Submitted

June 1, 2009—Pasadena, California

Filed July 31, 2009

Before: William A. Fletcher, Richard R. Clifton, and

Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.

10023
COUNSEL

Jenny O. Blake, Chicago, Illinois, for third-party movantappellant Cornella Berger.

Leon W. Seidman and Brent A. Whittlesey, Assistant United

States Attorneys, United States Attorneys Office for the Central District of California, Los Angeles, California, for

plaintiff-appellee United States of America.

UNITED STATES v. BERGER 10025
OPINION

MILAN D. SMITH, JR., Circuit Judge:

In this appeal, Third-Party Movant-Appellant Cornella Berger (Cornella) contends that the district court erred in including her community property interest in the proceeds of a real

estate sale among the funds payable to victims of her former

husband’s fraud pursuant to the Mandatory Victim Restitution

Act (MVRA), 18 U.S.C. § 3663(a). We hold that community

property is available to satisfy a restitution judgment obtained

under the MVRA against a criminally liable spouse, including

that portion of the property that otherwise would potentially

be awarded upon dissolution of marriage to an innocent

spouse who was not involved in the criminal activity. We thus

affirm the order of the district court.

FACTUAL AND PROCEDURAL BACKGROUND

In 1986, while Richard I. Berger (Richard) and Cornella

were married,1 Richard joined a partnership (Partnership)

known as 1748 North Verdugo Road, which he and others

formed for the purpose of purchasing a 290-unit apartment

complex (Property).

During the relevant period, Richard served as President,

Chief Executive Officer, and Chairman of the Board of Craig

Electronics (Craig), an electronics wholesaler. On March 19,

2003, a federal grand jury returned a first superceding indictment, charging Richard with thirty-six counts of conspiracy,

loan fraud, falsifying corporate books, and other securities

fraud violations committed at Craig from 1995 to as late as

1997. After a jury trial, Richard was found guilty on twelve

of those counts. There is no evidence that Cornella was

involved in any wrongdoing associated with the illegal

1Though they are now divorced, Cornella and Richard were married

during the entire period relevant to this case. 

10026 UNITED STATES v. BERGER
scheme or that any proceeds therefrom were invested in the

Property. 

Richard was sentenced on September 13, 2004 to a short

period of incarceration and was ordered, pursuant to the

MVRA, to pay restitution of just over $3.14 million to the

victims of his fraud. See United States v. Berger, 473 F.3d

1080, 1089, 1104 (9th Cir. 2007). 

Before Richard’s conviction, the government and the district court anticipated that a large restitution order would

likely be imposed against Richard were he to be convicted.

Accordingly, in May 2004, the district court ordered Richard

to “undertake no payment or transfer of assets in excess of

$10,000 without prior court approval.” Thereafter, and before

obtaining court approval, Richard consented to the Partnership’s entering into a contract to sell the Property. In March

2006, the district court ordered that Richard’s approximately

$1.5 million share of the proceeds from the sale of the Property (the Proceeds) be deposited with the court. Id.

Richard appealed his conviction and sentence. We affirmed

the conviction, but vacated the sentence and remanded for

resentencing. See Berger, 473 F.3d at 1108-09. Upon resentencing, the district court imposed a significantly longer incarceration period but entered the same restitution order. 

In June 2008, the government filed an application to disburse the Proceeds to the victims of Richard’s fraud who were

entitled to receive restitution. Cornella opposed the application, arguing that she was entitled to one-half of the Proceeds.

Over Cornella’s objection, the district court granted the government’s application to disburse the entire sum of the Proceeds to the victims.2

 Cornella appeals.

2The government and Cornella entered into an agreement providing that

the court would reserve the funds to which Cornella claimed an interest

until this appeal is resolved. 

UNITED STATES v. BERGER 10027
JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction over this appeal pursuant to 28 U.S.C.

§ 1291. We review de novo questions of law regarding the

application of restitution statutes. See United States v. Peterson, 538 F.3d 1064, 1074 (9th Cir. 2008).

DISCUSSION

Cornella claims that the district court erred by failing to

award her a one-half interest in the Proceeds. She first argues

that the asset distribution should have been analyzed under

case law governing criminal forfeiture. In support of that position, she cites United States v. Lester, 85 F.3d 1409 (9th Cir.

1996) (holding that wife’s one-half interest in portion of community property was not liable to criminal forfeiture imposed

on her husband). 

[1] Restitution and forfeiture are distinct asset collection

regimes, and they are governed by different rules. Criminal

forfeiture is “ ‘an in personam judgment against a person convicted of a crime.’ ” Id. at 1413 (emphases omitted) (quoting

United States v. $814,254.76 in U.S. Currency, 51 F.3d 207,

210-11 (9th Cir. 1995)). On the other hand, a restitution order

under the MVRA is “a lien in favor of the United States on

all property and rights to property of the person fined.” 18

U.S.C. § 3613(c).

[2] The district court did not order a criminal forfeiture

against Richard; it ordered a restitution under the MVRA. See

generally Berger, 473 F.3d 1080 (listing penalties imposed in

this case and analyzing court’s MVRA award, but not mentioning forfeiture); id. at 1104 (“The court . . . ordered Berger

to pay $3,144,832 in restitution to the lending banks.”); id.

(noting that “restitution in this case is governed by the Mandatory Victims Restitution Act of 1996”).3

 Cornella cites no

3Cornella admitted during a hearing before the district court that “there

was no forfeiture count . . . I will concede that.” 

10028 UNITED STATES v. BERGER
authority suggesting that a MVRA restitution case may be

analyzed under a forfeiture regime, and we are aware of only

contrary authority. See United States v. Mays, 430 F.3d 963,

965 (9th Cir. 2005) (explaining that MVRA restitution judgments may be enforced using the procedures for the enforcement of civil judgments, but not mentioning forfeiture law).

Accordingly, we analyze the allocation of restitution funds in

this case using the law governing MVRA restitution.

[3] Under the MVRA, the government may collect on a restitution judgment using the procedures available for the collection of criminal fines outlined in 18 U.S.C. § 3613(a), see

18 U.S.C. §§ 3613(f), 3664(m), and “may enforce a judgment

imposing a fine in accordance with the practices and procedures for the enforcement of a civil judgment under Federal

law or State law,” id. § 3613(a). Moreover,

“[n]otwithstanding any other Federal law . . . , a judgment

imposing a fine may be enforced against all property or rights

to property of the person fined,” except in certain circumstances not relevant here. Id. Accordingly, under the MVRA,

a restitution judgment may be enforced against all of Richard’s assets, i.e., his “property or rights to property.” See id.

[4] We next consider whether the Proceeds constitute Richard’s “property or rights to property” for the purposes of “enforc[ing] . . . a civil judgment under . . . State law,” id., in this

case, California law. Under California law, property acquired

by either husband or wife during a marriage generally constitutes “community property.” State Bd. of Equalization v. Woo,

82 Cal. App. 4th 481, 483 (Ct. App. 2000) (citing, e.g., Cal.

Fam. Code § 760 (“Except as otherwise provided by statute,

all property, real or personal, wherever situated, acquired by

a married person during the marriage while domiciled in this

state is community property.”); Martin v. S. Pac. Co., 130

Cal. 285, 286 (1900)). Here, Cornella and the government

agree that the Proceeds are community property.

[5] In the ordinary case, “the community estate is liable for

a debt incurred by either spouse before or during marriage,

UNITED STATES v. BERGER 10029
regardless of which spouse has the management and control

of the property and regardless of whether one or both spouses

are parties to the debt or to a judgment for the debt.” Cal.

Fam. Code § 910(a). Thus, even though Richard is the only

spouse who is a party to the judgment for the debt at issue

here, under the MVRA and California law the Proceeds’ community property status makes Cornella liable for that debt. See

18 U.S.C. §§ 3613, 3664(m); Cal. Fam. Code § 910(a).

Our holding in In re Soderling supports this conclusion. See

998 F.2d 730, 734 (9th Cir. 1993) (holding that criminal restitution judgment against two appellants was nondischargeable

in bankruptcy as to community property the appellants shared

with their respective spouses). In that case, we noted that a

state restitution order is a “debt” within the meaning of the

Bankruptcy Code. Id. (citing Penn. Dep’t of Pub. Welfare v.

Daveport, 495 U.S. 552, 557-63 (1990) (superseded on other

grounds)). We reasoned that similarities between the definition of “debt” under the Bankruptcy Code and California law

would compel the California Supreme Court to determine that

a restitution judgment constitutes a “debt” under California

law. Id. Therefore, we concluded that the federal criminal restitution judgment created a claim against the community

under California state law. Id. at 733-34. Such is the case here

as well.

Cornella argues that, even under a restitution scheme, she

is entitled to one-half of the Proceeds. In support of her argument, she cites Edukere v. United States, No. 05CV4227(RT),

2008 WL 2824954 (C.D. Cal. July 21, 2008) (unpublished

disposition). In Edukere, the court held that, where a wife’s

community property earnings were used to pay the mortgage

on her separate property residence, her husband acquired an

undivided one-half interest in the pro tanto community property interest. Id. at *5. 

Even if we were persuaded by the reasoning of an unpublished district court opinion, Edukere is unavailing. Contrary

10030 UNITED STATES v. BERGER
to Cornella’s characterization, Edukere held that the community property at issue was subject to the government’s foreclosure action, despite the fact that property interest arose almost

exclusively from the innocent spouse’s personal earnings. Id.

Although the court intimated that the spouse may be able to

raise some defense to foreclosure based on the community

property’s not having benefitted from the husband’s criminality, the court declined to decide the issue, noting that such an

argument was properly made during the separate foreclosure

proceeding. See id. 

[6] Cornella also argues that it would be unjust to punish

an innocent spouse for her husband’s misdeeds. We sympathize with Cornella’s situation, but for better or worse, it has

long been true in community property jurisdictions that both

spouses assume the risks—and benefits—of that legal system.

The case books are replete with examples of seeming injustices to innocent spouses where community property laws are

applied. Nevertheless, we are bound by California’s community property laws, and they control the outcome in this case.

CONCLUSION

Even though Cornella was not a party to, nor guilty of any

criminal wrongdoing in connection with, Richard’s fraud, her

community property interest in the Proceeds is subject to

Richard’s obligations under the restitution order entered by

the district court. 

AFFIRMED.

UNITED STATES v. BERGER 10031