United States District Court, D. Oregon
WILLIAMS UNITED STATES ATTORNEY DISTRICT OF OREGON JULIA
JARRETT ASSISTANT UNITED STATES ATTORNEY ATTORNEYS FOR
WHITNEY P. BOISE, BOISE MATTHEWS LLP ATTORNEY FOR DEFENDANT
OPINION & ORDER
A. HERNÁNDEZ, UNITED STATES DISTRICT JUDGE
was convicted of theft concerning programs receiving federal
funds under 18 U.S.C. § 666; engaging in monetary
transactions in criminally derived property under 18 U.S.C.
§ 1957; filing a false tax return under 26 U.S.C. §
7206; and failing to file an individual tax return under 26
U.S.C. § 7203. Now, the Government moves for a
preliminary order of forfeiture. The Court grants in part and
denies in part the Government's motion. The Court will
enter a personal money judgment against Defendant in the
amount of $1, 025, 235.33 and order the specific asset
forfeiture of $364.01 and $451, 006.95 as derived from
proceeds traceable to her conviction under 18 U.S.C. §
666. It declines, however, to order substitute asset
forfeiture at this time.
an eight-day trial, a jury found Defendant guilty of five
counts of theft concerning programs receiving federal funds;
two counts of engaging in monetary transactions in criminally
derived property; six counts of filing a false tax return;
and one count of failing to file an individual tax return.
Verdict Form, ECF 123. The Superseding Indictment included
forfeiture allegations for Counts 1 to 5 under 18 U.S.C.
§ 981(a)(1)(C) and 28 U.S.C. § 2461(c); and Counts
7 and 8 under 18 U.S.C. § 982(a)(1). Sup. Indict., ECF
5. The Government also indicated that it would pursue
substitute asset forfeiture under 21 U.S.C. § 853(p) as
incorporated by 18 U.S.C. § 2323(b)(2)(A). Id.
The Government submitted a Second Bill of Particulars
specifying that it was seeking forfeiture of $364.01 from a
bank account operated and controlled by Defendant and $451,
006.95 from Fidelity National Title Co., previously belonging
to MLK Property Group LLC, a business entity owned and
operated by Defendant. Second Bill of Particulars, ECF 77.
Defendant waived her right to a jury determination as to
forfeiture. Min. Proceedings, ECF 120; Waiver Jury Determ.,
its Motion for Entry of a Preliminary Order of Forfeiture,
the Government seeks: (1) a money judgment of $1, 071,
425.95; (2) forfeiture of three specific assets, $364.01 and
$451, 006.95 as proceeds traceable to her conviction of
Counts 1 to 5 and $20, 000 as property traceable to a $20,
000 check involved in Count 7; and (3), in the alternative,
forfeiture of the specific assets as substitute property to
fulfill any outstanding money judgment. Defendant opposes the
personal money judgment, arguing that such judgments are no
longer viable under the Supreme Court's decision in
Honeycutt v. United States, 137 S.Ct. 1626 (2017).
Defendant also opposes the Government's request for a
money judgment and specific asset forfeiture by arguing that
the Government did not properly deduct from the sought-after
judgment bona fide expenses made in the usual course of
business under 18 U.S.C. § 666(c).
applicable, forfeiture is mandatory and imposed as punishment
for a crime. See United States v. Monsanto, 491 U.S.
600, 606-07 (1989) (holding that, by using the phrase
“shall order” in a criminal forfeiture statute,
“Congress could not have chosen stronger words to
express its intent that forfeiture be mandatory in cases
where the statute applied”); United States v.
Davis, 706 F.3d 1081, 1083 (9th Cir. 2013) (recognizing
that “[f]orfeiture is imposed as punishment for a
crime”). “When the government has met the
requirements for criminal forfeiture, the district court must
impose criminal forfeiture, subject only to statutory and
constitutional limits.” United States v.
Newman, 659 F.3d 1235, 1240 (9th Cir. 2011) (citing
United States v. Casey, 444 F.3d 1071, 1076 (9th
Cir. 2006)). The government carries the burden of
establishing facts warranting forfeiture by a preponderance
of the evidence. United States v. Christensen, 828
F.3d 763, 822 (9th Cir. 2015). The government may seek
criminal forfeiture in the form of: (1) an in
personam money judgment against the defendant; (2)
forfeiture of specific assets; and (3) forfeiture of
substitute assets. Newman, 659 F.3d at 1242-43
(citing Fed. R. Crim. P. 32.2). Courts have unanimously
agreed that in personam money judgments representing
unlawful proceeds are proper even where forfeiture statutes
do not refer to money judgments. Id. at 1242 (citing
United States v. McGinty, 610 F.3d 1242, 1246 (10th
Cir. 2010) (collecting cases)).
entering a preliminary order of forfeiture, “[i]f the
government seeks forfeiture of specific property, the court
must determine whether the government has established the
requisite nexus between the property and the offense. If the
government seeks a personal money judgment, the court must
determine the amount of money that the defendant will be
ordered to pay.” Fed. R. Crim. P. 32.2(b)(1)(A). Though
there does not appear to be a Ninth Circuit test for
determining whether there is the requisite nexus, “five
other Circuits have adopted a but-for test: The Government
must show that the defendant would not have obtained the
property but for her illegal activity.” U.S. v.
Martin, No. 1:13-CR-0065-BLW, 2014 WL 221956, at * 4 (D.
Idaho Jan. 21, 2014) (citing cases from the D.C. Circuit, the
First Circuit, the Second Circuit, the Third Circuit, and the
Seventh Circuit). “The court's determination may be
based on evidence already in the record . . . and on any
additional evidence or information submitted by the parties
and accepted by the court as relevant and reliable.”
Fed. R. Crim. P. 32.2(b)(1)(B).
Defendant's conviction, the Government seeks: (1) a money
judgment of $1, 071, 425.95; (2) the forfeiture of specific
assets, including $364.01 and $451, 006.95 as proceeds
traceable to theft concerning programs receiving federal
funds; and (3) in the alternative, forfeiture of the
aforementioned specific assets as substitute property to
fulfill any outstanding money judgment. Gov't Mot.
Prelim. Order Forf. (“Gov't Mot.”) 2, ECF
132. Defendant opposes the Government's request, arguing
both that a personal money judgment is unlawful under the
Supreme Court's decision in Honeycutt v. United
States and that the judgment and specific asset
forfeiture are not supported by the evidence adduced at
trial. Def. Opp'n Gov't Mot. (“Def.
Opp'n”), ECF 145.
Court disagrees. First, the Court declines to depart from its
previous decision in United States v. Ford, 296
F.Supp.3d 1251 (D. Or. 2017), and finds that, after
considering Defendant's bona fide health expenses paid in
the usual course of business, a personal money judgment in
the amount of $1, 025, 235.33 is proper in this case. Second,
the Court finds that the funds from the sale of the MLK
property are properly subject to specific asset forfeiture as
the property was more likely than not purchased exclusively
with proceeds of Defendant's crime. Finally, the Court
declines to order the forfeiture of the funds from the sale
of the MLK property as substitute property. Accordingly, the
Court grants in part and denies in part the Government's
motion for entry of a preliminary order of forfeiture.
Government first seeks a personal money judgment of $1, 071,
425.95 as proceeds of Defendant's theft from GUTD under
18 U.S.C. § 666. “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.”
Newman, 659 F.3d. at 1241 (citing Fed. R. Crim. P.
32.2(b)(1)(A)) (“If the government seeks a personal
money judgment, the court must determine the amount of money
that the defendant will be ordered to pay.”).
“The calculation of [the] forfeiture amount does not
demand mathematical exactitude[, ] and the district courts
are ‘permitted to use general points of reference as a
starting point . . . and may make reasonable extrapolations
from the evidence established by a preponderance of the
evidence at the sentencing proceeding.'”
Ford, 296 F.Supp.3d at 1260 (quoting United
States v. Treacy, 639 F.3d 32, 48 (2d Cir. 2011)).
statute at issue here permits forfeiture of “[a]ny
property, real or personal, which constitutes or is derived
from proceeds traceable to” an offense under 18 U.S.C.
§ 666. 18 U.S.C. § 981(a)(1)(C). Proceeds
are “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.” 18 U.S.C. §
981(a)(2)(A). Thus, “[t]he language of the forfeiture
statute broadly makes forfeitable any property, obtained by
the defendant directly or indirectly, as a result of the
commission of” Defendant's crime. See United
States v. Lo, 839 F.3d 777, 793 (9th Cir. 2016)
(discussing the same statutory sections in the context of
wire and mail fraud).
objects to the money judgment on two grounds. First,
Defendant argues that a personal money judgment cannot be
entered against her because of the Supreme Court's recent
decision in Honeycutt v. United States. Second,
Defendant argues that the requested $1, 071, 425.95 money
judgment is not supported by the evidence adduced at trial.
The Court addresses each argument in turn.
Honeycutt v. United States
to the Supreme Court's decision in Honeycutt v.
United States, Defendant first argues that no personal
money judgment should issue because there is no statutory
authority explicitly supporting or authorizing the money
judgment against her. Def. Opp'n at 5, 9. According to
Defendant, such a judgment is unlawful because it would be
enforceable solely against future assets or income, which are
“untainted and unrelated to the criminal charges at
issue in this case.” Id. at 4. As Defendant
acknowledges, this Court was previously presented with and
rejected this argument in Ford, 296 F.Supp.3d at
1251. The Court will not depart from that decision here.
to Honeycutt, it was well-established in this
jurisdiction that courts are required to impose money
judgments on criminal defendants under certain circumstances.
In Casey, for example, the Ninth Circuit explained
that courts are required to impose in personam money