06 Dec 2016
Stefan Cassella of Asset Forfeiture Law, LLC comments on United States v. Burton, in which it was decided that currency held by a defendant who is arrested before he distributes drugs, and is convicted only of possession with intent to distribute, can nonetheless be forfeited on the basis that it is the proceeds of his previous drug trafficking or is facilitating property.
[United States v. Burton, 2016 WL 6956795 (S.D. Cal. Nov. 18, 2016)]
S.D. Cal. * A jury found Defendant guilty of possession with intent to distribute a controlled substance, and found that $35,700 in currency was subject to forfeiture as both the proceeds of the offense and property used to facilitate its commission.
Defendant objected to the forfeiture of the money, however, on the ground that because he was arrested before he was able to distribute the illegal drugs, the $35,700 could not be the proceeds of the offense on which he was convicted.
The court found that the evidence presented to the jury was sufficient to establish that the currency was the proceeds of Defendant’s previous drug trafficking activity and that it was used to facilitate the offense on which he was convicted, and therefore entered an order forfeiting the money as both proceeds and facilitating property pursuant to 21 U.S.C. §§ 853(a)(1) and (2), respectively.
Comment: This seemingly simple and straightforward case actually presents a controversial and non-trivial issue: if criminal forfeiture, which is part of the defendant’s sentence, is limited to the offense of conviction, and a defendant is convicted only of possession with intent to distribute drugs that were seized before he could sell them, under what theory could currency that was also found in the defendant’s possession be forfeited? The money cannot be the proceeds of the offense of conviction, the defendant would argue, because he was arrested before that offense yielded any proceeds.
The courts are split on this issue. The general rule is that there are no proceeds of a possession-with-intent-to-distribute offense if the defendant is arrested before he sells the drugs that he intended to sell, and thus there is nothing to be forfeited under a proceeds theory. See United States v. Lam, 2011 WL 1167208, *5-6 (E.D. Va. Mar. 28, 2011) (if the goods involved in the offense of conviction were seized before they could be sold, there were no proceeds to be forfeited, and therefore no basis for imposing a money judgment or forfeiting substitute assets); United States v. Robbins, 2011 WL 3862054, *3 (N.D. Iowa Aug.11, 2011) (there are no proceeds of manufacturing marijuana if the marijuana is seized before defendant has a chance to sell it); United States v. Thompson, 2002 WL 31667859, *2 (N.D.N.Y. Nov. 26, 2002) (there are no proceeds of a conspiracy that ends with the defendant’s arrest before the drugs are distributed). See generally United States v. Juluke, 426 F.3d 323, 328-29 (5th Cir. 2005) (the Government must prove that the property subject to forfeiture was the proceeds of the drug activity that formed the basis for the defendant’s conviction, not of the defendant’s drug trafficking generally); United States v. Garcia-Guizar, 160 F.3d 511, 524-25 (9th Cir. 1998) (where defendant is charged with selling $5,000 worth of drugs but $43,000 is seized from his locker, only the amount traceable to the offenses for which defendant is convicted can be forfeited in the criminal case).
On the other hand, some courts take a more expansive view of the “offense of conviction” and will authorize forfeiture of property derived from the same continuing course of conduct, including conduct on which the defendant has been acquitted. See United States v. Venturella, 585 F.3d 1013, 1018 (7th Cir. 2009) (forfeiture is not limited to property involved in the counts of conviction; distinguishing Garcia-Guizar); United States v. Genova, 333 F.3d 750, 762-63 (7th Cir. 2003) (because criminal forfeiture is part of sentencing, the forfeiture is not limited to the property involved in the offenses for which the defendant was convicted); United States v. Plaskett, 355 Fed. Appx. 639, 644 (3d Cir. 2009) (following Genova; the amount of a money judgment may include the amounts involved in counts on which the jury acquitted the defendant, if the court finds by a preponderance of the evidence that the conduct occurred). See also United States v. Lo, ___ F.3d ___, 2016 WL 5799706 (9th Cir. Oct. 5, 2016) (limiting Garcia-Guizar to cases where Government is seeking the forfeiture of a specific item, not seeking forfeiture of a money judgment reflecting a course of conduct);
In all events, the court in this case was probably on solid ground in finding that the $35,700 in seized currency was forfeitable as facilitating property even if it was not forfeitable as the proceeds of the offense on which the defendant was convicted. See United States v. Herder, 594 F.3d 352,364- 65 (4th Cir. 2010) (defendant convicted of possession with intent to distribute ordered to forfeit currency in his possession at the time of his arrest not because it was proceeds, but because it was used to facilitate the offense).
Stefan Cassella, Asset Forfeiture Law, LLC
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