Opinion ID: 6500514
Heading Depth: 3
Heading Rank: 2

Heading: Honeycutt and Its Progeny

Text: Under the law at the time of the District Court proceedings, the imposition of joint and several liability was appropriate, and, sensibly, the Defendants did not object to that 94 Recall that the District Court calculated nearly $14.2 million in loss to the victims of the Defendants’ scheme in determining their guidelines ranges. That amount is also reflected in the Court’s order that the Defendants pay the victims almost $14.2 million in restitution. See United States v. Leahy, 438 F.3d 328, 338 (3d Cir. 2006) (en banc) (“Restitution is … a restorative remedy that compensates victims for economic losses suffered as a result of a defendant’s criminal conduct.”). The $12 million in forfeiture ordered by the Court does not conflict with the loss calculation because forfeiture is measured by the defendant’s ill-gotten gains, not the loss to the victims. See United States v. Lacerda, 958 F.3d 196, 218 (3d Cir. 2020) (“[T]he purpose of forfeiture statutes is to separate the criminal from his ill-gotten gains.” (citing Honeycutt v. United States, 137 S. Ct. 1626, 1631 (2017))). Sentencing ranges generally only take into consideration the latter. See U.S.S.G. § 2B1.1 cmt. n.3(B) (“The court shall use the gain that resulted from the offense as an alternative measure of loss only if there is a loss but it reasonably cannot be determined.”) 139 aspect of the forfeiture order. While their appeals were pending, however, the Supreme Court issued its decision in Honeycutt. The case involved a hardware store manager who was convicted of conspiring to sell an iodine product from the store’s stock, all the while knowing it would be used to manufacture methamphetamine. Honeycutt, 137 S. Ct. at 1630. The government conceded that the manager “had no controlling interest in the store and did not stand to benefit personally” from the sale. Id. at 1630-31 (internal quotation marks omitted). Still, the government sought forfeiture judgments against both the owner and the manager in an amount equal to the store’s total proceeds from the sale of the iodine product. Id. at 1631. The forfeiture provision at issue, 21 U.S.C. § 853, permitted liability for “any proceeds the person obtained, directly or indirectly, as the result of” illegal drug distribution. Id. at 1632 (quoting 21 U.S.C. § 853(a)(1)). The Supreme Court read that statute as limiting forfeiture “to property the defendant himself actually acquired as the result of the crime” – in other words, “tainted property acquired or used by the defendant[.]” Id. at 1632-33, 1635. It reasoned that the word “obtain” in § 853(a) “defines forfeitable property solely in terms of personal possession or use.” Id. at 1632. Thus, the Supreme Court concluded, because the manager “had no ownership interest in [the] store and did not personally benefit from the [iodine product] sales[,] … § 853 does not require any forfeiture.” Id. at 1635. Following Honeycutt, we observed in United States v. Gjeli, 867 F.3d 418, 427 (3d Cir. 2017), that 18 U.S.C. §§ 981(a)(1) and 1963, two of the provisions relied on here, “are substantially the same as the one under consideration in Honeycutt.” Thus, the lessons of Honeycutt apply “with equal force” to Pelullo’s and John Maxwell’s forfeiture orders, or at 140 least with respect to those statutes.95 Id. at 427-28. Because their arguments are raised for the first time on appeal, however, they must meet the test for plain error. See supra note 49.