Opinion ID: 616304
Heading Depth: 1
Heading Rank: 4

Heading: Form of Criminal Forfeiture

Text: Federal Rule of Criminal Procedure 32.2 makes clear that, at least where the proceeds of the criminal activity are money, the government may seek a money judgment as a form of criminal forfeiture:  If the government seeks forfeiture of specific property, [certain results follow]. If the government seeks a personal money judgment, the court must determine the amount of money that the defendant will be ordered to pay. Rule 32.2(b)(1)(A) (emphases added); see 28 U.S.C. § 2461(c) (providing that 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). That is, the government may seek the forfeiture of specific property, or the government may seek a money judgment. We previously have held that a money judgment is a proper form of criminal forfeiture: Federal Rule of Criminal Procedure 32.2 supports this position [that money judgments are available as a form of criminal forfeiture] and differentiates between instances in which the government seeks forfeiture of specific property or a personal money judgment. Fed.R.Crim.P. 32.2(b)(1). The Advisory Committee Notes clarify that [s]ubdivision (b)(1) recognizes that there are different kinds of forfeiture judgments in criminal cases. One type is a personal judgment for a sum of money; another is a judgment forfeiting a specific asset. Fed.R.Crim.P. 32.2(b) advisory committee's notes. Casey, 444 F.3d at 1076 (second alteration in original). Other courts unanimously have agreed. See McGinty, 610 F.3d at 1246 (collecting cases and stating: Although the criminal forfeiture statute does not explicitly refer to money judgments, our sister circuits have uniformly recognized that money judgments representing the unlawful proceeds are appropriate.). When the government seeks a money judgment, Rule 32.2(b) does not permit the court to do anything other than determine the amount of money that the defendant will be ordered to pay, which is specified by statute. Rule 32.2(e) allows the government also to seek substitute property. See 21 U.S.C. § 853(p) (permitting the substitution of property in some circumstances). That provision carries its own set of procedural and substantive requirements before the court may order the forfeiture of substitute property. But, here, the government did not seek substitute property under Rule 32.2(e). The government sought only a money judgment as a form of criminal forfeiture under Rule 32.2(b). Because the government sought a money judgment in the first instance, there was no need to seek substitute property. See United States v. Candelaria-Silva, 166 F.3d 19, 42 (1st Cir.1999) (A criminal forfeiture order may take several forms. First, the government is entitled to an in personam judgment against the defendant for the amount of money the defendant obtained as proceeds of the offense. Second, to the extent the government can trace any of the proceeds to specific assets, it may seek the forfeiture of those assets directly. . . . Third, if as a result of some act or omission of the defendant, the government cannot trace the proceeds to specific assets, it may seek the forfeiture of [substitute property].). Accordingly, the procedural and substantive requirements of Rule 32.2(e) did not apply.
The statute mandates that a defendant forfeit a very specific amountthe proceeds of his criminal activity. Casey, 444 F.3d at 1076. The statutory provisions applicable here permit forfeiture of all property obtained, directly or indirectly, from the commission of the crime. See 18 U.S.C. § 981(a)(2)(A) (defining proceeds as property of any kind obtained directly or indirectly, as the result of the commission of the offense giving rise to forfeiture, and any property traceable thereto, and is not limited to the net gain or profit realized from the offense); id. § 982(a)(2) (requiring forfeiture of any property constituting, or derived from, proceeds the person obtained directly or indirectly, as the result of [the crime]). We have explained that the amount of proceeds does not mean just the amount of money that the defendant has when he or she is apprehended. Congress sought to punish equally the thief who carefully saves his stolen loot and the thief who spends the loot on wine, women, and song. See Casey, 444 F.3d at 1073-74 (quoting the oft-quoted passage [by] the Seventh Circuit . . . that `a racketeer who dissipates the profits or proceeds of his racketeering activity on wine, women, and song has profited from . . . crime' and therefore must disgorge those funds regardless of whether those funds were still in his possession (ellipsis in original)) (quoting United States v. Ginsburg, 773 F.2d 798, 802 (7th Cir.1985)). Imposing a money judgment despite [a criminal's] lack of assets at sentencing negates any benefit he may have received from the money, ensuring that, in the end, he does not profit from his criminal activity. Id. at 1074. This holds true even if the criminal spent some of the proceeds as part of the criminal enterprise. See id. at 1076 n. 4 (holding that the defendant must forfeit the full $7,000 that he received from the drug transaction even though he paid his drug boss $6,800 and profited only $200). Requiring imposition of a money judgment on a defendant who currently possesses no assets furthers the remedial purposes of the forfeiture statute by ensuring that all eligible criminal defendants receive the mandatory forfeiture sanction Congress intended and disgorge their ill-gotten gains, even those already spent. Id. at 1074.
We therefore reject Newman's arguments that he is entitled to a reduction in criminal forfeiture. Because he was caught soon after the second robbery, Newman never spent any of the stolen money. But, under any definition of proceeds, and particularly the broad definition applicable here, the proceeds of his bank robbery clearly equal the amount that he stole. To the extent that the district court found that the proceeds from Newman's crimes were anything other than $5,102, the district court clearly erred. Because the parties do not dispute that Newman stole $5,102, the district court erred in failing to enter an order of criminal forfeiture in that amount. We vacate the district court's judgment and remand with instructions to reenter judgment with an order of criminal forfeiture in the amount of $5,102. [7]
We similarly reject Tedesco's arguments that he is entitled to a reduction in criminal forfeiture. It does not matter that he personally profited very little or that the banks eventually recovered part of the loan principals. See Boulware, 384 F.3d at 813 (rejecting the argument that the defendant was entitled to an offset for the amounts that he repaid the bank from a loan obtained by making false statements). For purposes of criminal forfeiture, the proceeds of a fraudulently obtained loan equal the amount of the loan. Id. Moreover, because Tedesco entered into a conspiracy, the proceeds of his crime equal the total amount of the loans obtained by the conspiracy as a whole. [8] United States v. Olguin, 643 F.3d 384, 398-400 (5th Cir.2011), petitions for cert. denied, 80 U.S.L.W. 3218, ___ U.S. ___, ___ S.Ct. ___, ___ L.Ed.2d ___, 2011 WL 3921408 (U.S. Oct. 11, 2011) (No. 11-6184), and 80 U.S.L.W. 3218, ___ U.S. ___, ___ S.Ct. ___, ___ L.Ed.2d ___, 2011 WL 4051403 (U.S. Oct. 11, 2011) (No. 11-6294); United States v. Warshak, 631 F.3d 266, 332 (6th Cir.2010); United States v. McHan, 101 F.3d 1027, 1043 (4th Cir. 1996). To the extent that the district court held that the proceeds from Tedesco's crime were anything else, the district court applied the wrong legal test. The parties dispute the significance of the plea agreement, in which Tedesco agreed to forfeit the full $1 million sought by the government. Because the parties themselves agreed, the government understandably did not put into evidence extensive documentation supporting its assertion that the proceeds from Tedesco's crime equaled or exceeded $1 million. Tedesco argues that the government failed to meet its evidentiary burden of establishing that the proceeds were at least $1 million. The government counters that the plea agreement was sufficient and necessarily conclusive evidence. Both parties overreach. The district court may rely on factual statements in the plea agreement. See Fed.R.Crim.P. 32.2(b)(1)(B) (The court's determination may be based on evidence already in the record, including any written plea agreement. . . .). In most cases, an admission by the defendant suffices to prove the factual basis for criminal forfeiture. See Libretti, 516 U.S. at 43, 116 S.Ct. 356 ([W]e need not determine the precise scope of a district court's independent obligation, if any, to inquire into the propriety of a stipulated asset forfeiture embodied in a plea agreement.). Because the parties stipulated to an amount of forfeiture and agreed to its payment, the government did not have an independent obligation to offer detailed proof of that stipulated fact. But the existence of a stipulated amount of forfeiture does not necessarily suffice. The Supreme Court has expressly recognized the potential for abuse in situations like these: We do not mean to suggest that a district court must simply accept a defendant's agreement to forfeit property, particularly when that agreement is not accompanied by a stipulation of facts supporting forfeiture, or when the trial judge for other reasons finds the agreement problematic. Id. The district court has an independent duty to determine the amount of money that the defendant will be ordered to pay. Fed. R.Crim.P. 32.2(b)(1)(A). The court's determination may be based on evidence already in the record, including any written plea agreement, and on any additional evidence or information submitted by the parties and accepted by the court as relevant and reliable. Rule 32.2(b)(1)(B). If the court has good reason to believe that the proposed forfeiture order exceeds the amount authorized by statute (here, proceeds), then the court, in its discretion, may inquire into the factual basis for the proceeds. Here, the district court expressed a wide variety of policy and legal reasons for reducing the criminal forfeiture amount to $100. But it is clear that, as a factual matter, the proceeds were more than $100. On the other hand, it is not clear from the record that the proceeds of the conspiracy were at least $1 million. The district court never made the required factual findings, and there may be insufficient evidence in the record on this point. In a similar case, the Tenth Circuit considered a district court's failure to enter an order of criminal forfeiture for policy and legal reasons. After rejecting those arguments, the Tenth Circuit remanded to the district court to make the necessary findings: The government requests that we direct the district court to enter a forfeiture money judgment in the amount of $325,459.55. Although we agree that the government is entitled to a money judgment, we do not address the proper amount of the requisite forfeiture order. The district court made no findings regarding the amount of the proceeds of McGinty's misapplication of bank funds or what property was derived from those proceeds. The district court is in the best position to make these factual determinations by conducting any necessary factfinding and considering the effect of the plea agreement, as well as the effect of any [other proceeds]. McGinty, 610 F.3d at 1249. We adopt a similar approach here. We vacate the district court's entry of an order of criminal forfeiture of $100, and we remand. On remand, the district court first should consider whether there is a reason to believe that the statements in the plea agreement are not sufficient evidence of proceeds. If the district court has no reason to question the accuracy of the stipulated amount, then the court should enter an order of criminal forfeiture in the agreed amount of $1 million. If the district court has a reason to question the accuracy of the stipulated amount, then the court should take evidence on the amount of the proceeds of Tedesco's crime. We leave the specifics of any such further proceedings to the sound discretion of the district court. The district court then shall enter an order of criminal forfeiture in the amount of the proceeds of Tedesco's crime. [9]