Opinion ID: 620999
Heading Depth: 2
Heading Rank: 2

Heading: The $20 Million Forfeiture

Text: On appeal, Aguasvivas-Castillo makes two arguments that the imposition of a $20 million forfeiture violates the Excessive Fines Clause of the Eighth Amendment, only one of which, an argument as to the disproportionality of the forfeiture, was raised in the district court. Aguasvivas-Castillo argues, for the first time on appeal, that the $20 million forfeiture is unconstitutional under this court's decisions in United States v. Levesque, 546 F.3d 78 (1st Cir.2008), and United States v. Jose, 499 F.3d 105 (1st Cir.2007), because, he newly alleges, it will deprive [him] of his livelihood. We review only for plain error. Fed.R.Crim.P. 52(b) (A plain error that affects substantial rights may be considered even though it was not brought to the court's attention.); Olano, 507 U.S. at 731-32, 113 S.Ct. 1770; Jose, 499 F.3d at 108; see also United States v. Fogg, 666 F.3d 13, 15 (1st Cir.2011) (to be published in F.3d). To establish plain error, Aguasvivas-Castillo must demonstrate that (1) there was error; (2) the error was plain; and (3) the error affected the defendant's substantial rights. Olano, 507 U.S. at 732-35, 113 S.Ct. 1770. Where there is plain error, the court must next consider whether the error adversely impacted the fairness, integrity, or public reputation of judicial proceedings. Id. at 735-37, 113 S.Ct. 1770. In Levesque, we held that defendants may raise whether the forfeiture order is so excessive under the Eighth Amendment that it would, in extreme cases, effectively deprive the defendant of his or her future livelihood. 546 F.3d at 83. This question is separate from the three-part test for gross disproportionality and may require factual findings beyond those previously made by the district court. Id. at 85. It is the defendant's burden, not the government's, to raise the issue of future deprivation of livelihood. Fogg, 666 F.3d at 19. Aguasvivas-Castillo neither raised the issue in the trial court nor put facts into the record on the topic. [A] defendant's inability to satisfy a forfeiture at the time of conviction, in and of itself, is not at all sufficient to render a forfeiture unconstitutional, nor is it even the correct inquiry. Id. (quoting Levesque, 546 F.3d at 85). Even where a defendant does not have sufficient funds to cover the forfeiture at the time of the conviction, the government may seize future assets to satisfy the order. United States v. Hall, 434 F.3d 42, 59 (1st Cir.2006); see also United States v. Katz, No. 10-1138, 2010 WL 4627872, at  (1st Cir. Nov. 15, 2010) (finding no plain error in district court's forfeiture order where defendant argued for the first time on appeal, without citing authority, that excessiveness may be established with reference to the financial burden created by the forfeiture order). As the government notes, the Attorney General and Secretary of the Treasury may remit a forfeiture on the grounds of hardship to the defendant under 21 U.S.C. §§ 853(j), 881(d), and 19 U.S.C. § 1618, should a reason to do so exist. See United States v. Ortiz-Cintrón, 461 F.3d 78, 82 (1st Cir.2006). Our review of Aguasvivas-Castillo's second argument, which he raised in the district court, is de novo with due deference given to any factual findings made by the district court. Id. at 81. Aguasvivas-Castillo argues that the forfeiture amount is disproportional to the gravity of his offense. A criminal forfeiture is unconstitutional under the Excessive Fines Clause if it is grossly disproportional to the gravity of the defendant's offense. Levesque, 546 F.3d at 83 (quoting United States v. Bajakajian, 524 U.S. 321, 337, 118 S.Ct. 2028, 141 L.Ed.2d 314 (1998) (original quotation marks omitted)). To determine whether a forfeiture is grossly disproportional, courts should consider the following factors: (1) whether the defendant falls into the class of persons at whom the criminal statute was principally directed; (2) other penalties authorized by the legislature (or the Sentencing Commission); and (3) the harm caused by the defendant. United States v. Heldeman, 402 F.3d 220, 223 (1st Cir.2005) (citing Bajakajian, 524 U.S. at 337-40, 118 S.Ct. 2028). The first factor is not at issue: Aguasvivas-Castillo concedes that the criminal statute is principally directed at offenders like him. As to the second, it is true that his gain from the fraud was conservatively estimated at $4.4 million. However, Aguasvivas-Castillo was also convicted of money laundering, which explains the higher forfeiture amount. The penalty amount authorized under the money laundering statute, 18 U.S.C. § 1956(b)(1)(A), is the value of the property, funds, or monetary instruments involved in the transaction. (Emphasis added). In other words, the total funds involved in and traceable to the money laundering includes any commingled funds. See United States v. McGauley, 279 F.3d 62, 76-77 (1st Cir.2002) (citing United States v. Bornfield, 145 F.3d 1123, 1135 (10th Cir.1998)). As we said in McGauley, even legitimate funds that are commingled with illegitimate funds can be forfeited if the legitimate funds were somehow involved in the offense, such as by helping to conceal the illegal funds. Id. at 76 (quoting United States v. Baker, 227 F.3d 955, 970 n. 4 (7th Cir.2000)); see also Bornfield, 145 F.3d at 1135 ([F]orfeiture of legitimate and illegitimate funds commingled in an account is proper as long as the government demonstrates that the defendant pooled the funds to facilitate, i.e., disguise the nature and source of, his scheme.). Finally, there was no error in the court's weighing of the harm caused by Aguasvivas-Castillo's crime. Puerto Rico implemented the 25% limit on cash withdrawals on each food stamp recipient's EBT-card in order to ensure that the recipients spend the money on food. The 25% allowance for cash is meant to provide flexibility to individuals for whom finding good prices is especially important. The 75%/25% system is also meant to reduce opportunities for fraud, and was directly subverted by defendant and his co-conspirators. His actions had the real effect of diverting food stamp funds from feeding people and introduced waste into the program. The deterrent effect of the forfeiture on other certified retailers is also relevant. One study reported that in 2008, 2,725 retailers, approximately 10 percent of all retailers in Puerto Rico, were NAP-certified. Implementing SNAP in Puerto Rico 74. Aguasvivas-Castillo's actions also normalized the defrauding of the government and the tolerance of criminal behavior. The fraud occurred for many years and it involved numerous food stamp recipients and store employees. All of this was done out of greed by someone in a position of leadership who should have been a role model of proper and right behavior. Instead, he was a role model for corruption. The forfeiture order stands.