Opinion ID: 616304
Heading Depth: 1
Heading Rank: 3

Heading: Mandatory Criminal Forfeiture

Text: Two distinct statutory provisions for criminal forfeiture apply here. As discussed below, both statutes provide that, when the government meets the applicable requirements, the district court must impose criminal forfeiture in the amount of the proceeds of the crime. In Newman's case, the government included a criminal forfeiture allegation pursuant to 18 U.S.C. § 981 and 28 U.S.C. § 2461(c). Section 981, as its title states, typically governs civil forfeiture[s], not criminal forfeitures. See generally United States v. Liquidators of European Fed. Credit Bank, 630 F.3d 1139, 1149 (9th Cir.2011) (describing the differences between civil forfeiture and criminal forfeiture). But 28 U.S.C. § 2461(c) permits the government to seek criminal forfeiture whenever civil forfeiture is available and the defendant is found guilty of the offense: If a person is charged in a criminal case with a violation of an Act of Congress for which the civil or criminal forfeiture of property is authorized, the Government may include notice of the forfeiture in the indictment or information pursuant to the Federal Rules of Criminal Procedure. If the defendant is convicted of the offense giving rise to the forfeiture, the court shall order the forfeiture of the property as part of the sentence in the criminal case pursuant to the Federal Rules of Criminal Procedure and section 3554 of title 18, United States Code. The Eleventh Circuit has explained: Congress enacted 28 U.S.C. § 2461(c), effective August 23, 2000, to make criminal forfeiture available in every case that the criminal forfeiture statute does not reach but for which civil forfeiture is legally authorized. United States v. Padron, 527 F.3d 1156, 1161-62 (11th Cir.2008); accord United States v. Day, 524 F.3d 1361, 1375-77 (D.C.Cir.2008); United States v. Jennings, 487 F.3d 564, 584-85 (8th Cir.2007); United States v. Edelkind, 467 F.3d 791, 798-800 (1st Cir.2006); United States v. Vampire Nation, 451 F.3d 189, 198-201 (3d Cir.2006). Relevant to Newman, 18 U.S.C. § 981(a)(1) states: The following property is subject to forfeiture to the United States: . . . . (C) Any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of [specified sections] of this title or any offense constituting specified unlawful activity (as defined in section 1956(c)(7) of this title), or a conspiracy to commit such offense. In turn, 18 U.S.C. § 1956(c)(7) provides that the term `specified unlawful activity' means . . . (D) an offense under [many specified sections, including] section 2113 or 2114 (relating to bank and postal robbery and theft). Because Newman pleaded guilty to violating 18 U.S.C. § 2113, criminal forfeiture is available pursuant to § 981(a)(1)(C) and 28 U.S.C. § 2461(c). In Tedesco's case, the government included a criminal forfeiture allegation pursuant to 18 U.S.C. § 982, which is titled criminal forfeiture. [3] Section 982(a)(2) states, in relevant part: The court, in imposing sentence on a person convicted of a violation of, or a conspiracy to violate (A) section . . . 1344 of this title. . . . . . . . shall order that the person forfeit to the United States any property constituting, or derived from, proceeds the person obtained directly or indirectly, as the result of such violation. Because Tedesco pleaded guilty to conspiracy to violate 18 U.S.C. § 1344, he is subject to criminal forfeiture pursuant to § 982(a)(2). Sifting the statutory provisions, both statutes require that the district court shall order forfeiture. 18 U.S.C. § 982(a)(2); 28 U.S.C. § 2461(c). The mandatory nature of that phrase is clear: When the government has met the requirements for criminal forfeiture, the district court must impose criminal forfeiture, subject only to statutory and constitutional limits. See United States v. Casey, 444 F.3d 1071, 1076 (9th Cir.2006) (The statute mandates that a defendant forfeit a very specific amountthe proceeds of his criminal activity.); id. at 1074 (referring to criminal forfeiture as the mandatory forfeiture sanction Congress intended); see also United States v. Monsanto, 491 U.S. 600, 607, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989) (holding that, by using the phrase shall order in a different forfeiture statute, Congress could not have chosen stronger words to express its intent that forfeiture be mandatory in cases where the statute applied). Criminal forfeiture is separate from the discretionary sentencing considerations under 18 U.S.C. § 3551. Unlike a fine, which the district court retains discretion to reduce or eliminate, the district court has no discretion to reduce or eliminate mandatory criminal forfeiture. See 18 U.S.C. § 3554 (The court . . . shall order, in addition to the sentence that is imposed pursuant to the provisions of section 3551, that the defendant forfeit property to the United States. . . . (emphasis added)); 28 U.S.C. § 2461(c) (providing that, for all criminal forfeitures, the court shall order the forfeiture of the property. . . pursuant to the Federal Rules of Criminal Procedure and section 3554 of title 18). Forfeiture is not a disguised fine such that the rules applicable to fines apply equally to forfeiture. See Casey, 444 F.3d at 1076 (We disagree that allowing money judgments in forfeiture cases erases the distinctions between fines and forfeitures.). To be sure, the Supreme Court has recognized that there are constitutional limits to forfeiture. For example, prosecutorial misconduct amounting to a due process violation limits the government's power to seek criminal forfeiture. Libretti v. United States, 516 U.S. 29, 42-43, 116 S.Ct. 356, 133 L.Ed.2d 271 (1995) (citing Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 634, 109 S.Ct. 2646, 105 L.Ed.2d 528 (1989)). And criminal forfeiture orders are subject to the constitutional limit defined by the Excessive Fines Clause of the Eighth Amendment. United States v. Bajakajian, 524 U.S. 321, 118 S.Ct. 2028, 141 L.Ed.2d 314 (1998); United States v. 3814 NW Thurman St., 164 F.3d 1191, 1197 (9th Cir.1999). But those constitutional limits, not at issue here, [4] do not permit the district court to exercise discretion when issuing criminal forfeiture orders. To the extent that the district court sought to reduce or eliminate criminal forfeiture as part of its sentencing discretion, the district court erred. Criminal forfeiture is also separate from restitution, which serves an entirely different purpose. Congress conceived of forfeiture as punishment for the commission of various [crimes]. Libretti, 516 U.S. at 39, 116 S.Ct. 356 (emphasis added). The purpose of restitution . . ., however, is not to punish the defendant, but to make the victim whole again by restoring to him or her the value of the losses suffered as a result of the defendant's crime. United States v. Hunter, 618 F.3d 1062, 1064 (9th Cir.2010) (emphasis added) (internal quotation marks and brackets omitted). Accordingly, we have held that defendants may be required to pay restitution and forfeit the same amounts. United States v. Boulware, 384 F.3d 794, 813 (9th Cir. 2004). Applying that rule in Boulware, we held that the defendant was not entitled to a credit for the amount that he had repaid toward the fraudulently obtained loan. Id. In the absence of a statute authorizing a reduction in forfeiture, the district court may not reduce forfeiture because of an order of restitution to a victim or because the victim already has been made whole. [5] See id. at 813-14 (noting that 18 U.S.C. § 981(a)(2)(C) reduces the amount of forfeiture in certain other circumstances); Casey, 444 F.3d at 1076 n. 4 (noting that 18 U.S.C. § 982(b)(2) eliminates forfeiture in certain other circumstances). Although Defendants must pay both restitution and criminal forfeiture, that result is not an impermissible double recovery. We agree with the Tenth Circuit's recent explanation: The district court erred in concluding that it could equitably reduce the forfeiture amount owed by McGinty in light of the amount he was also required to pay to the bank in restitution. Criminal forfeiture and restitution are separate remedies with different purposes. . . . Because restitution and forfeiture are distinct remedies, ordering both in the same or similar amounts does not generally amount to a double recovery. . . . Paying restitution plus forfeiture at worst forces the offender to disgorge a total amount equal to twice the value of the proceeds of the crime. Given the many tangible and intangible costs of criminal activity, this is in no way disproportionate to the harm inflicted upon government and society by the offense. United States v. McGinty, 610 F.3d 1242, 1247-48 (10th Cir.2010) (paragraph break, citations, internal quotation marks, and brackets omitted); see also United States v. Leahy, 464 F.3d 773, 793 n. 8 (7th Cir.2006) (While we recognize to the untrained eye, this might appear to be a `double dip,' restitution and forfeiture serve different goals, and we have approved of [ordering both restitution and forfeiture] in the past.); accord United States v. Taylor, 582 F.3d 558, 565-66 (5th Cir.2009) (per curiam), [6] cert. denied, ___ U.S. ___, 130 S.Ct. 1116, 175 L.Ed.2d 926 (2010). To the extent that the district court reduced or eliminated criminal forfeiture because of restitution, the district court erred.