Court Opinion

ID: 9007
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:41:43+00
Date Added: 2024-06-11T08:49:54.956700
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IN THE UNITED STATES COURT OF APPEALS

                        FOR THE FIFTH CIRCUIT

                          ___________________

                            Nos. 94-11155 &
                                 95-10213
                          ___________________

UNITED STATES OF AMERICA,
                                             Plaintiff-Appellee,

     versus

SHAWNEE LOUISE SCHINNELL,
                                          Defendant-Appellant.
           _______________________________________________

      Appeals from the United States District Court for the
                    Northern District of Texas
         ________________________________________________

                             April 9, 1996

Before GARWOOD, EMILIO M. GARZA and DENNIS, Circuit Judges.

GARWOOD, Circuit Judge:

     Pursuant to a plea agreement, defendant-appellant Shawnee

Louise Schinnell (Schinnell) pleaded guilty to one count of wire

fraud in violation of 18 U.S.C. § 1343, while preserving her right

to appeal the district court’s denial of her motion to dismiss on

double jeopardy grounds.     We affirm the denial of the motion to

dismiss.    We vacate Schinnell’s sentence on other grounds and

remanded for resentencing.

                     Facts and Proceedings Below

     Beginning prior to April 1988 and continuing through at least

October 1993, Schinnell was employed in the accounting department

of Trammell-Crow, a real estate firm located in Dallas, Texas.
Between January 1990 and February 1993, Schinnell used her position

at Trammell-Crow to draw funds from Trammell-Crow bank accounts

through the use of forged signatures, fraudulent endorsements, and

wire transfers.     Schinnell then used these funds to purchase for

herself real and personal property, as well as to pay expenses

associated with S&H Racing, a company that she owned and operated.1

     In November 1993, Schinnell was interviewed by agents of the

Federal Bureau of Investigation (FBI), and conceded her involvement

in the offenses.     Before any indictment was sought, Schinnell and

her attorney subsequently entered into negotiations regarding the

possibility of a plea agreement with members of the United States

Attorney’s office.    Among the terms of the proposed plea agreement

were that Schinnell would plead guilty to one count of bank fraud

and agree not to contest any forfeiture proceedings. However, this

proposed agreement was never entered into.

     Various items of personal property were subsequently seized by

the government, and administrative forfeiture proceedings pursuant

to 18 U.S.C. § 981(a)(1)(C) were instituted.     Schinnell received

notice of the forfeiture proceedings, yet she chose not to file a

claim in or otherwise contest the forfeiture based upon the advice

of her new attorney that her resources were best conserved for her

criminal defense.     The property was accordingly administratively

forfeited.

     A superseding indictment was returned in October 1994 charging

       The facts relating to the commission of the offense are
undisputed. They are recited in a factual resume in the plea
agreement.

                                   2
Schinnell with bank fraud in violation of 18 U.S.C. § 1344 (Count

1), wire fraud in violation of 18 U.S.C. § 1343 (Count 2), and

interstate transportation of money taken by fraud in violation of

18 U.S.C. § 1957 (Count 3).           Schinnell moved to dismiss the

indictment   on   double   jeopardy       grounds   based   upon   the   prior

administrative forfeiture.     Following a hearing, the court issued

a one-paragraph order denying the motion on December 19, 1994.2

The following day Schinnell entered a conditional plea of guilty to

the wire fraud charge reserving her right to appeal the denial of

her motion to dismiss.     The remaining counts were dismissed upon

motion of the government pursuant to a plea agreement.

     The district court sentenced Schinnell to a sixty-month term

of imprisonment, a three-year term of supervised release, and

ordered her to pay restitution totaling $1,707,656.48 in monthly

installments of at least four hundred dollars per month beginning

thirty days after her release from confinement.               Schinnell now

brings this appeal.

                              Discussion

I.   Double Jeopardy

     A.   Procedure

      The order below stated:

          “Before the court is the defendant’s motion to
     dismiss indictment on grounds of double jeopardy. Upon
     consideration of the evidence presented at the December
     16 hearing, the court finds that the civil forfeiture in
     this case does not constitute punishment under the Double
     Jeopardy Clause of the Constitution. See United States
     v. Tilley, 18 F.3d 295 (5th Cir.), cert. denied,    S.Ct.
      , 63 U.S.L.W. 3414 (U.S. Nov. 28, 1994)(No. 94-243).
     Consequently, the motion is DENIED.”

                                      3
     Schinnell advances two procedural arguments regarding the

district court’s disposition of her plea of double jeopardy which

she contends require remand: first, the district court erred in

allocating the burden of proof to the defendant on the double

jeopardy issue; and second, the district court failed to make

essential findings on the record as required by Fed. R. Crim. P.

12(e).   We address these claims seriatim.

     The parties are in agreement that the defendant bears the

initial burden of establishing a prima facie nonfrivolous claim of

double jeopardy, after which the burden shifts to the government to

demonstrate by a preponderance of the evidence why double jeopardy

principles do not bar prosecution.      United States v. Deshaw, 974

F.2d 667, 670 (5th Cir. 1992);       United States v. Levy, 803 F.2d

1390, 1393-94 (5th Cir. 1986); United States v. Stricklin, 591 F.2d

1112, 1117-18 (5th Cir.), cert. denied, 100 S.Ct. 449 (1979).

However, the parties disagree as to whether the district court

properly allocated this burden in the case at bar.

     Having reviewed the transcript of the hearing held below, we

are satisfied that the trial court properly understood the showing

required of the defendant.   During an exchange between the trial

court and counsel regarding the proper allocation of the burden on

the double jeopardy issue, the trial court remarked:

     “On most motions, the movant even in a criminal case has
     the burden of going forward with sufficient evidence to
     show the grounds for the motion. And it does not seem to
     me that Ms. Schinnell satisfies that burden by just
     showing that the government has seized some property of
     hers. At most, all that shows to me is that she may have
     a civil claim against the government...but it certainly
     doesn’t show she has been placed in jeopardy in the

                                 4
      criminal context unless she shows some relationship
      between the offense charged and the property seized.”
      (Emphasis added).

We believe that this statement reflects that the district court was

simply holding Schinnell to the burden of going forward with

sufficient evidence to establish a prima facie claim.3 Schinnell’s

double jeopardy claim rests upon a “multiple punishment” theory.

The relationship between the previous punishment and the punishment

the government currently seeks to impose is the essence of this

type of double jeopardy claim. Department of Revenue of Montana v.

Kurth Ranch, 114 S.Ct. 1937, 1941 n.1 (1994) (Double Jeopardy

Clause protects against multiple punishments for same offense).

      Nor do we find merit in Schinnell’s argument that reversal is

required because the trial court failed to make essential findings

of fact as required by Fed. R. Crim. P. 12(e).                        Rule 12(e)

provides, inter alia, “[w]here factual issues are involved in

determining a motion, the court shall state its essential findings

on the record.”     However, in United States v. Yeagin, 927 F.2d 798,

800   (5th   Cir.   1991),   we   held       that   where   the   district   court

indicated neither the factual findings nor the legal basis for the

denial of a motion, we were required to conduct an independent

      The trial court also stated:

      “I think that was what I was suggesting to [defense
      counsel] myself, that since the defendant’s motion is
      asserting double jeopardy she has to show how that
      forfeiture action in some manner constitutes placing her
      in jeopardy for a criminal offense.”

                                         5
review of the record to determine whether the district court’s

decision was supported by “any reasonable view of the evidence.”4

Having done so, we find, for the reason stated below, that no

remand is required.   The undisputed facts reflect that Schinnell’s

motion is not well taken.

     B.   Merits

     By now it is well-established that the Double Jeopardy Clause

of the Fifth Amendment affords protection against the imposition of

multiple punishments for the same offense.5           United States v.

Halper, 109 S.Ct. 1892, 1897 (1992); Kurth Ranch, 114 S.Ct. at 1941

n.1 (1994).    Indeed, the Supreme Court has observed that the

prohibition against multiple punishments is one with “deep roots in

our history   and   jurisprudence.”   Halper,   109    S.Ct.   at   1897.

Furthermore, the imposition of civil sanctions by the government,

where not rationally related to a remedial purpose, may constitute

     Schinnell questions our continued adherence to Yeagin because
the decision upon which we relied in reaching our holding, United
States v. Horton, 488 F.2d 374 (5th Cir.), cert. denied, 94 S.Ct.
2405 (1974), was decided prior to the adoption of Rule 12(e).
However, Yeagin is consistent with the approach to Rule 12(e)
adopted by several of our sister circuits. See United States v.
Bloomfield, 40 F.3d 910, 913-14 (8th Cir. 1994)(en banc), cert.
denied, 115 S.Ct. 1970 (1995); United States v. Griffin, 7 F.3d
1512, 1516 (10th Cir. 1993); United States v. Harley, 990 F.2d
1340, 1341 & n. 1 (D.C. Cir.), cert. denied, 114 S.Ct. 236 (1993);
but see, United States v. Moore, 936 F.2d 287, 288-89 (6th Cir.
1991)(strict compliance with Rule 12(e)); United States v. Prieto-
Villa, 910 F.2d 601, 607 (9th Cir. 1990).

      However, we take care to note that the protections of the
Double Jeopardy Clause are ordinarily implicated only by multiple
punishments for the same offense in successive proceedings in which
the defendant is in jeopardy. Multiple punishments for a given
offense imposed in a single proceeding violate the double jeopardy
clause only if they are not legislatively authorized. Halper, 109
S.Ct. at 1903 & n. 10.

                                  6
“punishment” for purposes of the double jeopardy analysis.              Id. at

1902.

      Because it is undisputed that the administrative forfeiture at

issue in the present case relates to the same offense for which

Schinnell was criminally prosecuted, the only question before us

today is whether the forfeiture constituted punishment which would

operate to bar the subsequent criminal sanctions sought by the

government.    On the undisputed facts before us, we conclude that

the   forfeiture    was   not   punishment,       and   therefore   affirm   the

district court’s denial of Schinnell’s motion to dismiss on grounds

of double jeopardy.

      Our analysis is guided primarily by our recent opinion in

United States v. Arreola-Ramos, 60 F.3d 188, 192 (5th Cir. 1995),

in which we held that “a summary forfeiture, by definition, can

never serve as a jeopardy component of a double jeopardy motion.”

See also,     United States v. Clark, 67 F.3d 1154, 1163 (5th Cir.

1995), petition for cert. filed, (U.S. Jan. 16, 1996)(No. 95-7511).

Our holding in Arreola-Ramos was based upon our determination that

an administrative summary forfeiture in which defendant had filed

no claim could neither constitute “punishment” nor former jeopardy

so as to trigger the protections of the Double Jeopardy Clause.

      In concluding that a summary forfeiture could not constitute

punishment, we observed that summary proceedings are only available

for forfeitures of property that is “unclaimed” or “unowned.”

Therefore,    we   stated   that   “albeit    a    legal   fiction,   the    very

issuance of a summary forfeiture establishes that no one owned the

                                      7
Funds,” and “[c]onsequently, their forfeiture punished no one.”

Id.    at   192.     Several     of   our    sister   circuits    have   reached

essentially the same conclusion.              United States v. Cretacci, 62

F.3d    307,   311    (9th     Cir.   1995)(administrative       forfeiture   is

forfeiture of “abandoned” property), petition for cert. filed,

(U.S. Feb. 13, 1996)(No. 95-7955); United States v. Baird, 63 F.3d

1213, 1218 (3rd Cir. 1995)(property administratively forfeited

“ownerless” as a matter of law), cert. denied, 64 U.S.L.W. 3549

(Feb. 20, 1996).       Schinnell concedes that although she was given

notice of the forfeiture proceedings, she elected not to enter an

appearance     to    contest     them.       Therefore,   the    administrative

forfeiture was one of unowned or abandoned property, and could not

have punished Schinnell.6

       Furthermore, having elected not to contest the forfeiture,

Schinnell was never a party to the administrative forfeiture

proceeding, and consequently there was no former jeopardy.                As the

Seventh Circuit explained in its influential opinion in United

States v. Torres, 28 F.3d 1463, 1465 (7th Cir.), cert. denied, 115

S.Ct. 669 (1994) upon which we relied in Arreola-Ramos:

       “You can’t have double jeopardy without a former
       jeopardy. Serfass v. United States, 420 U.S. 377, 389,
       95 S.Ct. 1055, 1063, 43 L.Ed. 265 (1975).   As a non-

    This result is not altered by the fact that the government was
aware that Schinnell owned or purported to own the property as
evidenced by plea negotiations in which the government sought
Schinnell’s agreement not to contest the forfeiture. As we noted
in Arreola-Ramos, supra, the notion that the property is “unowned”
is simply a legal fiction.    See also Cretacci (failure to make
claim is abandonment); United States v. Idowu, 74 F.3d 387, 395 (2d
Cir. 1995)(finding it irrelevant whether seizing agency knows
defendant owned property).

                                         8
     party, Torres was not at risk in the forfeiture
     proceeding, and ‘[w]ithout risk of a determination of
     guilt, jeopardy does not attach, and neither an appeal
     nor further prosecution constitutes double jeopardy.’
     Id. at 391-92, 95 S.Ct. at 1064.”

See also Baird, 63 F.3d at 1218-19; United States v. Idowu, 74 F.3d

387 at 394 (2d Cir. 1995).        The facts relating to the forfeiture

proceeding   in   the   present    case   are   indistinguishable,   and

accordingly Schinnell’s claim of double jeopardy must fail.

     We find additional support for our holding today in United

States v. Tilley, 18 F.3d 295 (5th Cir. 1994), which addressed

whether the administrative forfeiture of drug proceeds under 21

U.S.C. §§ 881(a)(6) and (a)(7) constituted punishment for double

jeopardy purposes.      In concluding that the forfeiture did not

constitute punishment, we relied partly on the rational relation

test set forth in Halper, holding that the drug proceeds forfeited

were necessarily proportional to the harms inflicted on society by

the sale of the narcotics.    However, we additionally observed:

     “Even absent the rational relation test of Halper, we
     would nevertheless be required to hold that the
     forfeiture of the proceeds from illegal drug sales does
     not constitute punishment because of the implicit and
     underlying premise of the rational relation test: The
     nature of the forfeiture proceeding may constitute
     punishment because it involves the extraction of lawfully
     derived property from the forfeiting party. . . When,
     however, the property taken by the government was not
     derived from lawful activities, the forfeiting party
     loses nothing to which the law ever entitled him.” Id.
     at 300.

We further noted, “the forfeiture of illegal proceeds, much like

the confiscation of stolen money from a bank robber, merely places

that party in the lawfully protected financial status quo that he

enjoyed prior to launching his illegal scheme.”           Id.   We find

                                     9
nothing which renders this reasoning inapplicable to the forfeiture

of property purchased with proceeds admittedly obtained through

wire fraud in violation of 18 U.S.C. § 1343.

     Schinnell’s contention that not all of the forfeited property

was traceable to proceeds of the fraud does not alter this result.

The forfeiture here was sought and effected solely under section

981(a)(1)(C) which applies only to “property, real or personal,

which constitutes or is derived from proceeds” of designated

offenses including violations of section 1343. Schinnell failed to

contest the forfeiture, and therefore the forfeited property has

been deemed traceable to the proceeds of her fraud.        This remains

the case despite the fact that at the double jeopardy hearing

before the district court Schinnell introduced evidence through

which she sought to establish that some of the forfeited property

was not traceable to her fraud. Once the administrative forfeiture

was completed, the district court lacked jurisdiction to review the

forfeiture   except   for   failure   to   comply   with    procedural

requirements or to comport with due process.        Arreola-Ramos, 60

F.3d at 191 & n.13-14 (claims may be brought as either civil action

collaterally attacking summary forfeiture or in criminal proceeding

as a Rule 41(e) motion to return seized property, but review

limited to compliance with statutory and due process requirements);

Linarez v. United States Dept. of Justice, 2 F.3d 208, 211-14 (7th

Cir. 1993); United States v. Giraldo, 45 F.3d 509, 511 (1st Cir.

1995).   Even were a judicial challenge to the forfeiture to be

available, the judicial relief would be to set aside the forfeiture

                                 10
(in whole or in part) because the forfeited items were not within

section 981(a)(1)(C), not to bar the criminal prosecution.                  The

property    was    forfeited    as   criminal     proceeds     under    section

981(a)(1)(C); if it was such proceeds, then the forfeiture is not

punishment; if it was not such proceeds, Schinnell had an adequate

remedy to contest and prevent or set aside the forfeiture of items

which were not proceeds, and, if successful, would likewise suffer

no punishment by the attempted forfeiture.               By foregoing that

remedy,    she    cannot   retroactively     transmute   the   facially   non-

punitive forfeiture into a punitive one by litigating the proceeds

issue in the criminal prosecution.           Therefore, for this additional

reason also, no remand for consideration of the extent to which the

forfeited property was in fact proceeds is available.7

      Accordingly,     the   district    court   did   not   err   by   denying

Schinnell’s motion to dismiss on grounds of double jeopardy.

II.   Sentencing

      A.   Four Level Enhancement

      We find no merit in Schinnell’s contention that the district

court erred in applying a four-level enhancement to her sentence

     The cases from this Circuit relied upon by Schinnell for the
proposition that a remand is required to determine the source of
the forfeited property, United States v. One Rolls Royce, VIN No.
SRL 39955, 905 F.2d 89 (5th Cir. 1990) and United States v.
Gonzalez, 1996 WL 77700 (5th Cir. 1996), are distinguishable in
that they were appeals from judicial forfeiture proceedings.
Therefore, the jurisdictional defect which barred the district
court’s consideration of that question was not present in those
cases.   Having failed to avail herself of the procedures for
requiring the government to institute judicial forfeiture
proceedings in the first instance, remand is not available to
reopen the inquiry into whether there was an adequate basis for
this proceeds forfeiture.

                                        11
pursuant   to   section   2F1.1(b)(6)(B)for   fraud   over    $1    million

“affecting   a financial    institution.”8    Paragraph      five   of   the

probation officer’s addendum to the presentence report (PSR), which

the district court adopted, indicated that application of the

enhancement under section 2F1.1(b)(6)(B) was appropriate based upon

the fact that a tolling agreement had been entered into between

Trammell-Crow and one of its banks preserving Trammell-Crow’s

ability to bring suit against the bank to recover its lost funds.

The PSR also indicated that the probation officer had been told by

Trammell-Crow that if a settlement agreement was not reached, a

civil suit would be filed against that bank and others in which

Trammell-Crow had accounts against which Trammell-Crow checks and

other items forged by Schinnell had been debited.       Therefore, the

PSR concluded that Schinnell’s actions had affected a financial

institution.

     Schinnell’s argument is essentially that the threat of suit

against a financial institution based upon a fraud perpetrated upon

one of its customers is simply not the type of effect on the

institution contemplated by the guidelines.      Unfortunately, there

is scant authority among the courts of appeal construing this

     “(6) If the offense --
          (A) substantially jeopardized the safety
               and   soundness  of   a   financial
               institution; or
          (B) affected a financial institution and
               the defendant derived more than
               $1,000,000 in gross receipts from
               the offense,
          increase by 4 levels.      If the resulting
          offense level is less than level 24, increase
          to level 24.” U.S.S.G. § 2F1.1(b)(6)(A),(B).

                                   12
provision, and what little there is does not prove to be of any

assistance in the present case.               However, given the evidence of

Schinnell’s      extensive      and    prolonged      fraud       involving      forged

signatures,      fraudulent     endorsements         and    wire      transfers,       all

presented, and intended to be presented, to the banks for the

advancement of funds thereon and concomitant debiting of their

customer’s      accounts,    direct     harm    to    the    banks      involved       was

certainly reasonably foreseeable.              The existence of the tolling

agreement further demonstrates that the banks are realistically

exposed    to   substantial     potential      liability         as   the     result   of

Schinnell’s fraud.       As Schinnell does not contest that the gross

receipts of her fraud exceeded $1 million, we find no error in the

application of the enhancement to her sentence.

     B.     Restitution

     Schinnell asserts that the district court’s restitution award

was erroneous      in   three    respects:       (1)       the   restitution      award

includes    compensation      for     consequential        damages      not    properly

recoverable under the Victim and Witness Protection Act (VWPA), 18

U.S.C. §§ 3663-64; (2) the district court failed to make adequate

findings regarding Schinnell’s ability to pay; and (3) the amount

of restitution ordered was an abuse of discretion as the district

court failed to consider Schinnell’s ability to pay.

     In reviewing an order of restitution, if the restitution was

imposed in violation of the VWPA, it is illegal, and the proper

standard of review is de novo; otherwise an order of restitution is

reviewable only for abuse of discretion, and will be reversed only

                                         13
if the defendant demonstrates that it is probable that the district

court failed to consider one of the mandatory factors and the

failure to consider that factor influenced the court.                     United

States v. Reese, 998 F.2d 1275, 1282 (5th Cir. 1993).

       We must agree with Schinnell that the district court erred in

including $344,760.93 in expenses incurred by Trammell Crow for, as

stated in the PSR, “accounting fees and cost to reconstruct the

bank statements for the time period that the defendant perpetuated

this    scheme,      temporary     employees    hired   by   the   company   to

reconstruct the monthly bank statements, and cost incurred by the

company [in borrowing funds] to replace the stolen funds.” Section

3663(b)(1) of the VWPA limits restitution to either the return of

the property, or if that is inadequate, to the value of the

property when stolen less the value of the property when returned.

United States v. Mitchell, 876 F.2d 1178, 1184 (5th Cir. 1989); see

also United States v. Barany, 884 F.2d 1255, 1260 (9th Cir. 1989),

cert. denied, 110 S.Ct. 755 (1990).            Therefore, the VWPA provides

no authority for restitution of consequential damages involved in

determining the amount of the loss or in recovering those funds.

See Mitchell, 876 F.2d at 1184(no restitution of “cost of restoring

property to its pre-theft condition, or cost of employing counsel

to recover from an insurance company”); United States v. Arvanitis,

902    F.2d   489,    497   (7th    Cir.     1990)   (attorneys’   fees   spent

investigating fraudulent claim); Government of the Virgin Islands

v. Davis, 43 F.3d 41, 44-46 (3d Cir. 1994) (attorneys’ fees

generated to recover or protect property), cert. denied, 115 S.Ct.

                                        14
2280 (1995); United States v. Diamond, 969 F.2d 961, 968 (10th Cir.

1992) (attorneys’ fees and expenses in liquidating company); United

States v. Mullins, 971 F.2d 1138, 1147 (4th Cir. 1992) (attorneys’

fees and investigators to recover property).           The district court

erred in including the $344,760.93 in Trammell-Crow costs and

expenses.

     Schinnell’s remaining arguments are closely related to one

another, as she maintains both that the district court failed to

make adequate findings on the record to support its restitution

order and that the award itself was an abuse of discretion.             When

the district court orders full restitution, it is only necessary to

assign specific reasons for doing so where the record itself is

inadequate to allow us to properly review the restitution award on

appeal.     United States v. Patterson, 837 F.2d 182, 187 (5th Cir.

1988); Mitchell, 876 F.2d at 1183 (quoting Patterson).              We find

that the record before us, which includes both the PSR and the

transcript of the sentencing hearing, is sufficient to allow us to

properly conduct our review.

     Schinnell bases her argument that the district court failed to

consider her ability to make restitution primarily on the court’s

statement    at   the   sentencing   hearing   that,   “I   recognize   as a

practical matter . . . that a million and a half dollars is a lot

of restitution to expect from Ms. Schinnell at least over any short

term from now . . . .”      In addition, Schinnell points to the PSR’s

finding that Schinnell had a negative net worth of nearly $1

million and a negative monthly cash flow of $201 per month as

                                     15
further evidence of her inability to make restitution to Trammell-

Crow.

     Section 3664 of the VWPA provides:

     “[t]he court, in determining whether to order restitution
     under section 3663 of this title and the amount of such
     restitution, shall consider the amount of the loss
     sustained by any victim as a result of the offense, the
     financial resources of the defendant, the financial needs
     and earning ability of the defendant and the defendant’s
     dependents, and such other factors as the court deems
     appropriate.”

Our review of the record persuades us that the district court

satisfied its statutory mandate.

     While the district court did recognize that it was unlikely

that Schinnell possessed the ability to pay such a large amount

over the   “short   term,”    it   expressly   made   concessions   to   the

defendant’s    financial     situation    in   tailoring   the   order   of

restitution:

     “I recognize as a practical matter the difficulty Ms.
     Schinnell may have in paying that amount in a lump sum,
     and so to better accommodate her financial circumstances,
     I will give her the option of paying that restitution in
     monthly installments provided that each installment is at
     least four hundred dollars and the installments be made
     at least monthly, the first installment to be due thirty
     days from the day that Ms. Schinnell is released from
     custody.”

In addition, the sentencing guidelines provided for a fine in the

range of ten thousand to one hundred thousand dollars which the

district court declined to impose “since I do not think Ms.

Schinnell has the capability of paying both a fine and restitution,

and I think it’s more than important that her resources be devoted

to restitution so I’m not going to order any fine.”         These remarks

suggest that far from ignoring one of the mandatory factors set

                                     16
forth in section 3664, the district court structured its order so

as to enhance Schinnell’s ability to comply with its terms.

      Nor does Schinnell’s current financial situation prevent the

assessment of restitution as a “defendant’s indigency at the time

restitution      is   ordered      is   not     a   bar   to   the    requirement        of

restitution.” United States v. Ryan, 874 F.2d 1052, 1054 (5th Cir.

1989).     The fact that Schinnell had operated her own business as

well as the duration and extent of the fraud perpetrated against

Trammell-Crow are indicative of her considerable financial acumen.

Furthermore, Schinnell’s current negative net worth is largely the

result of a civil judgment obtained against her by Trammell-Crow

for her fraud, and the district court explicitly stated that the

restitution order was not intended to permit double recovery for

those losses compensated by collection on the civil judgment.

Therefore, the district court did not abuse its discretion in

ordering Schinnell to pay substantial restitution.

      Accordingly, Schinnell’s conviction is AFFIRMED, her sentence

is VACATED and the cause is REMANDED for resentencing consistent

with this opinion.

DENNIS, Circuit Judge, specially concurring:

      I concur in the majority’s opinion in all respects except for its reliance upon United

States v. Arreola-Ramos, 60 F.3d 188 (5th Cir. 1995), for the          proposition that an

administrative “summary forfeiture, by definition, can never serve as a jeopardy component

of a double jeopardy motion [because in such proceedings] no one is punished.” Id. at 192

                                           17
(emphasis original). Arreola-Ramos is considered precedential in our circuit for the point

relied upon by the majority, but I believe that in this respect it conflicts with the Supreme

Court’s decisions in Montana Department of Revenue v. Kurth Ranch, ___U.S. ___, 114

S.Ct. 2801, 125 L.Ed.2d 488 (1944); Austin v. United States, ___U.S.___, 113 S.Ct. 2801,

125 L.Ed.2d 488 (1993); and United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104

L.Ed.2d 487 (1987), and should be reconsidered as to that issue by this court en banc.

       In Arreola-Ramos, the Government seized money during a search of the

defendant's home in connection with its investigation of suspected drug activity. While

Arreola-Ramos was incarcerated following his arrest on charges stemming from the same
activity, the Government, in accordance with federal forfeiture provisions, published notice

of its intention to forfeit the property. Arreola-Ramos did not enter an appearance or

contest the forfeiture, and the property was consequently forfeited summarily, with title

vesting in the Government. Subsequently, Arreola-Ramos filed a motion to dismiss the

criminal case pending against him, arguing that the prosecution for the same offense

giving rise to the forfeiture placed him in jeopardy a second time, in violation of the Fifth

Amendment's double jeopardy clause. Although acknowledging that the double jeopardy

clause protects against multiple punishments, as well as multiple prosecutions, id. at 191-

92, the court rejected the defendant's contention, holding that an administrative forfeiture,
"by definition, can never serve as a jeopardy component of a double jeopardy motion. In

summary forfeiture proceedings, there is no trial, there are no parties, and no one is

punished." Id. at 192 (emphasis original).9

     The Arreola-Ramos court also adverted to Serfass v. United States, 420 U.S. 377, 95 S. Ct.
1055, 43 L.Ed.2d 265 (1975), for the proposition that jeopardy cannot attach "until a defendant
is 'put to trial before the trier of facts, whether the trier be a judge or jury.'") Arreola-Ramos, 60
F.3d at 192 n. 22 (quoting Serfass, 420 U.S. at 388, 95 S. Ct. at 1063). Serfass, however, was
a case implicating the double jeopardy prohibition against multiple prosecutions and does not
stand for the proposition that all double jeopardy claims are predicated on multiple proceedings.
See United States v. Baird, 63 F.3d 1213, 1225 (3rd Cir. 1995)(Sarokin, J., dissenting); United
States v. Brophil, 899 F. Supp. 1257, 1261-62 (D.Vt. 1995), overruled sub silentio by United States
v. Idowu, 74 F.3d 387 (2nd Cir. 1996).

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       The panel opinion characterized the defendant's argument as "a transparent bit of

legal alchemy, [that] attempts to transmute the 'lead' of a civil forfeiture proceeding -- in

which [defendant] was not even a party -- into the 'gold of former jeopardy.'" Id. at 190.

Examination of the Arreola-Ramos gloss on civil forfeiture, however, reveals the opinion

itself to be spun with threads of judicial straw rather than even Rumpelstiltskin's gold. The

opinion is predicated on what the panel acknowledged was a "legal fiction": That property

that is unclaimed in an administrative forfeiture is "unowned" and consequently its

forfeiture cannot be "punishment." See id. at 192.

       Recent United States Supreme Court opinions, and this circuit's decisions
interpreting them, clearly establish that the forfeiture of a person's lawfully owned property,

because of that person's illegal activity, may constitute "punishment" for double jeopardy

purposes. See Austin v. United States,          U.S.    , 113 S. Ct. 2801, 125 L.Ed.2d 488

(1993)(forfeiture of property under 21 U.S.C. §§ 881(a)(4) and 881(a)(7) per se constitutes

punishment for purposes of Eighth Amendment excessive fines analysis); United States

v. Halper, 490 U.S. 435, 109 S. Ct. 1892, 104 L.Ed.2d 487 (1989)(civil penalty may be

punishment for purposes of double jeopardy analysis); United States v. Perez, 70 F.3d 345

(5th Cir. 1995)(Austin's reliance on Halper demonstrates that forfeitures under 21 U.S.C.

§§ 881(a)(4) and 881(a)(7) are punishment per se under either double jeopardy or
excessive fines analysis); see also Montana Department of Revenue v. Kurth Ranch,

U.S.    , 114 S. Ct. 2801, 125 L.Ed.2d 488 (1994)(holding that Montana's tax on the

possession of illegal drugs constituted punishment for purposes of the double jeopardy

clause). The proper question presented by an administrative forfeiture double jeopardy

claim, therefore, is not whether the defendant claimed ownership at the appropriate time,

but whether the defendant actually had a legal property interest in the forfeited items, and

consequently was punished as a result of the property's forfeiture. See United States v.

Baird, 63 F.3d 1213, 1224 (3rd Cir. 1995)(Sarokin, J., dissenting)("The issue should be

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whether defendant was the owner, not whether he filed a proper and timely claim of

ownership in the forfeiture proceeding.      He is punished if his property is forfeited,

irrespective of whether or not he participated."); see also Gainer v. United States, 904

F.Supp. 1234, 1237 (D.Kan. 1995)("The character of the act of forfeiture is without

question punishment whether or not a defendant appears as part of the proceeding. This

is especially true when there is no doubt about the owner of the property seized."); United

States v. Brophil, 899 F.Supp. 1257, 1262 (D.Vt. 1995)(a forfeiture proceeding "subject[s]

the property owner to the hazards of forfeiture, regardless of whether or not he appeared

as a party. Because the Supreme Court has held that such civil forfeiture proceedings do
constitute punishment . . . the protections of the Double Jeopardy Clause should apply to

one like Brophil whose property the Government has seized in that manner."), overruled

sub silentio by United States v. Idowu, 74 F.3d 387 (2nd Cir. 1996). There are valid

reasons a defendant may fail to inject him or herself into administrative forfeiture

proceedings, from lack of money to obtain assistance of counsel or post a bond to fear of

jeopardizing trial rights. See, e.g., Baird, 63 F.3d at 1224 (Sarokin, J., dissenting)("A

defendant may choose not to participate because the allegations are true, or for fear that

a claim of ownership could be utilized against him in the criminal proceeding."). A

defendant's decision to refrain from contesting forfeiture proceedings should not serve as
the basis for manufacturing the fiction that property belonging to the defendant is

ownerless.

       In concluding that a defendant who has failed to assert his ownership interest by

timely contesting an administrative forfeiture has never been in jeopardy, the Arreola-

Ramos panel followed the Seventh Circuit's lead in United States v. Torres, 28 F.3d 1463

(7th Cir. 1994), a decision that glibly concluded jeopardy did not attach where the

defendant never became a party to an administrative forfeiture proceeding due to his

failure to contest the forfeiture: "As a non-party, Torres was not at risk in the forfeiture

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proceeding, and '[w]ithout the risk of a determination of guilt, jeopardy does not attach, and

neither an appeal nor further prosecution constitutes double jeopardy.'" Torres, 28 F.3d

at 1465 (quoting Serfass v. United States, 420 U.S. 377, 891-92, 95 S. Ct. 1055, 1064, 43

L.Ed.2d 265 (1975)). I recognize that the other circuit courts of appeal to address this

issue have done the same, seizing the glittering opportunity presented by Torres to evade

a difficult constitutional issue. See, e.g., United States v. German, 76 F.3d 315 (10th Cir.

1996); United States v. Cretacci, 62 F.3d 307 (9th Cir. 1995); United States v. Idowu, 74

F.3d 387 (2nd Cir. 1995); United States v. Baird, 63 F.3d 1213 (3rd Cir. 1995). The

superficial appeal of an erroneous decision, however, does not transmute its hollow
essence into a rationale based on reality or common sense. The Torres line of cases flies

in the face of both reason and Supreme Court precedent, see Baird, 63 F.3d at 1225

(Sarokin, J., dissenting); Gainer, 904 F.Supp. at 1237, Brophil, 899 F.Supp. at 1261-66,

and this circuit's reliance on the Torres approach should receive closer scrutiny and more

careful consideration in light of those Supreme Court decisions.

       In this case, however, the district court properly found that the forfeiture of the

proceeds of Schinnell's fraudulent activities was not punishment requiring dismissal of her

criminal prosecution under the double jeopardy clause. Schinnell's property was forfeited

under a statute that applied only to property constituting or derived from proceeds. See
18 U.S.C. § 1343. As the majority discusses as additional grounds for rejecting Schinnell's

double jeopardy claim, the forfeiture of proceeds is not punishment, see United States v.

Tilley, 18 F.3d 295 (5th Cir. 1994), and, to the extent that property rightfully belong to

Schinnell was improperly forfeited under § 1343, her recourse was to seek to have the

forfeiture set aside. See slip op. at 9-11.

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