Opinion ID: 72320
Heading Depth: 2
Heading Rank: 2

Heading: the “voluntary disgorgement” issue

Text: As part of his plea agreement, Hoffer agreed not to contest the government's subsequent civil forfeiture action seeking $50,000 from Hoffer as the proceeds of his illegal activities. The “voluntary disgorgement” the district court relied upon was, in fact, a civil forfeiture. The district court, at the government's request and with Hoffer's consent, specifically termed the disgorgement a forfeiture. Moreover, the voluntariness of the forfeiture must be considered in the context of the plea agreement: Hoffer traded his right to contest the forfeiture for what the government gave him in the bargain, which included dismissing five counts of the indictment. We turn now to the issue of whether civil forfeiture, contested or uncontested, is a prohibited, encouraged, discouraged or unmentioned factor for departing from the sentencing guidelines. 14 While this issue is a question of first impression in our circuit, a number of other circuits have concluded that civil forfeiture cannot be used by a district court as a basis for departure from the sentencing guidelines. See United States v. Weinberger , 91 F.3d 642, 644-45 (4th Cir. 1996); United States v. Hendrickson, 22 F.3d 170, 175-76 (7th Cir. 1994); United States v. Crook, 9 F.3d 1422, 1425-26 (9th Cir. 1993); United States v. Shirk, 981 F.2d 1382, 1397 (3d Cir. 1992), vacated on other grounds, 510 U.S. 1068, 114 S. Ct. 873 (1994). No circuit has held otherwise. Section 5E1.4 of the sentencing guidelines provides: “Forfeiture is to be imposed upon a convicted defendant as provided by statute.” We agree with the Third, Fourth, Seventh and Ninth Circuits that § 5E1.4 indicates that the Commission viewed forfeiture as a wholly separate sanction, which, if imposed, was intended to be in addition to, not in lieu of, imprisonment. See Weinberger, 91 F.3d at 644; Hendrickson, 22 F.3d at 175; Crook, 9 F.3d at 1426; Shirk, 981 F.2d at 1397. This view is supported by the Commission's decision to include forfeiture as a relevant factor when setting fines, see U.S.S.G. § 5E1.4(d)(5), while leaving it out as a factor which may support a reduction in sentence. See Crook, 9 F.3d at 1426. The Commission's decision indicates that civil forfeiture is relevant only to the possible monetary sanctions which may flow from a criminal conviction, but it has no bearing on a convicted defendant's term of incarceration. Moreover, it would make little sense for forfeiture to serve as a basis for departure from the guidelines. Forfeited assets or 15 property are frequently the proceeds of criminal activities. See, e.g., 21 U.S.C. § 853(a)(1) (mandating forfeiture of property which constitutes proceeds of certain criminal activities). The more successful a criminal is, the more likely he or she is to accumulate significant assets or property from the criminal activity. Allowing a departure from the sentencing guidelines based on forfeiture would, in essence, reward criminals for their proficiency or success in committing crimes. Surely, the Commission never intended such a result. Whether a forfeiture is contested or uncontested makes no difference to our holding. In either case, forfeiture lacks the quality of voluntariness which some courts have held may arguably make restitution a potential basis for departure. See, e.g., United States v. Hairston, 96 F.3d 102, 107-08 (4th Cir. 1996), cert. denied, ___ U.S. ___, 117 S. Ct. 956 (1997) (holding that payment of restitution can, in exceptional circumstances, be basis for departure from sentencing guidelines); Hendrickson, 22 F.3d at 176 (comparing forfeiture to voluntary payment of restitution and concluding that, unlike the payment of restitution, under no circumstances can forfeiture be the basis of a departure from the sentencing guidelines).4 For the reasons set forth above, we hold that civil forfeiture can never be the basis for a downward departure from the sentencing 4 This case does not raise the question of whether voluntary payment of restitution can constitute “extraordinary acceptance of responsibility,” supporting a departure from the sentencing guidelines, see Hairston, 96 F.3d at 107-08, and we intimate no view on the subject. 16 guidelines; it is a prohibited factor. Therefore, the district court abused its discretion by relying on Hoffer's “voluntary disgorgement” as a basis to depart from the guidelines. See Koon, ___ U.S. at ___, 116 S. Ct. at 2047 (“A district court by definition abuses its discretion when it makes an error of law.”).