GRABER, Circuit Judge:
Defendants David Ray Newman and Jon Tedesco committed crimes that subject them to criminal forfeiture: Newman robbed two banks, and Tedesco conspired to defraud banks. Defendants each pleaded guilty and agreed to forfeit a specific amount of money. The district court nevertheless eliminated criminal forfeiture or reduced it to a trivial amount. The government timely appeals. Because the district court's reasoning in the two cases is substantially similar, we issue this joint opinion.
Newman robbed a bank and stole $1,152. The government indicted him on one count of violating 18 U.S.C. § 2113(a). The indictment included a forfeiture allegation, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), for a criminal money judgment up to $1,152.
While on pretrial release, Newman robbed another bank and, this time, stole $3,950. The government again indicted him. The indictment included a forfeiture allegation, pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), for a criminal money judgment up to $3,950.
The parties entered into a plea agreement in which Newman "knowingly and voluntarily agree[d] to . . . the criminal forfeiture of an in personam criminal forfeiture money judgment of $3,950 . . . and an in personam criminal forfeiture money judgment of $1,152" for a total of $5,102. After the plea hearing, Newman filed a "brief regarding forfeiture of assets which are not proceeds of [the] offense."
At sentencing, the district court decided not to order criminal forfeiture. The government filed a motion for reconsideration, which the district court denied. The district court entered judgment against Newman in both cases but did not order forfeiture of any amount. The government sought, and the district court ordered, restitution of an amount less than $5,102 because some of the money had been returned to one of the banks after Newman was caught.
Tedesco entered into a conspiracy "to obtain money and property by using straw buyers to apply for mortgage loans from federally insured financial institutions to purchase properties." The government charged him with one count of conspiracy to violate 18 U.S.C. § 1344. The criminal information included a forfeiture allegation, pursuant to 18 U.S.C. § 982(a)(2)(A), for a criminal money judgment up to $1 million.
The parties entered into a plea agreement in which Tedesco "knowingly and voluntarily agree[d] to . . . the criminal forfeiture of a money judgment of $1,000,000." Tedesco pleaded guilty, and the district court entered a preliminary
At sentencing, the district court stated that, contrary to the preliminary order, it would not impose any amount of forfeiture. Ultimately, however, the district court entered a judgment that included a final order of forfeiture of $100. The government sought, and the district court ordered, restitution of an amount less than $1 million because the loss to the financial institution from the specified property transaction was less than $1 million. The government timely appeals.
Two distinct statutory provisions for criminal forfeiture apply here. As discussed below, both statutes provide that, when the government meets the applicable requirements, the district court must impose criminal forfeiture in the amount of the "proceeds" of the crime.
In Newman's case, the government included a criminal forfeiture allegation pursuant to 18 U.S.C. § 981 and 28 U.S.C. § 2461(c). Section 981, as its title states, typically governs "civil forfeiture[s]," not criminal forfeitures. See generally United States v. Liquidators of European Fed. Credit Bank, 630 F.3d 1139, 1149 (9th Cir.2011) (describing the differences between civil forfeiture and criminal forfeiture). But 28 U.S.C. § 2461(c) permits the government to seek criminal forfeiture whenever civil forfeiture is available and the defendant is found guilty of the offense:
The Eleventh Circuit has explained: "Congress enacted 28 U.S.C. § 2461(c), effective August 23, 2000, to make criminal forfeiture available in every case that the criminal forfeiture statute does not reach but for which civil forfeiture is legally authorized." United States v. Padron, 527 F.3d 1156, 1161-62 (11th Cir.2008); accord United States v. Day, 524 F.3d 1361, 1375-77 (D.C.Cir.2008); United States v. Jennings, 487 F.3d 564, 584-85 (8th Cir.2007); United States v. Edelkind, 467 F.3d 791, 798-800 (1st Cir.2006); United States v. Vampire Nation, 451 F.3d 189, 198-201 (3d Cir.2006).
Relevant to Newman, 18 U.S.C. § 981(a)(1) states:
In turn, 18 U.S.C. § 1956(c)(7) provides that "the term `specified unlawful activity' means— . . . (D) an offense under [many
In Tedesco's case, the government included a criminal forfeiture allegation pursuant to 18 U.S.C. § 982, which is titled "criminal forfeiture."
Because Tedesco pleaded guilty to conspiracy to violate 18 U.S.C. § 1344, he is subject to criminal forfeiture pursuant to § 982(a)(2).
Sifting the statutory provisions, both statutes require that the district court "shall order" forfeiture. 18 U.S.C. § 982(a)(2); 28 U.S.C. § 2461(c). The mandatory nature of that phrase is clear: When the government has met the requirements for criminal forfeiture, the district court must impose criminal forfeiture, subject only to statutory and constitutional limits. See United States v. Casey, 444 F.3d 1071, 1076 (9th Cir.2006) ("The statute mandates that a defendant forfeit a very specific amount—the proceeds of his criminal activity."); id. at 1074 (referring to criminal forfeiture as "the mandatory forfeiture sanction Congress intended"); see also United States v. Monsanto, 491 U.S. 600, 607, 109 S.Ct. 2657, 105 L.Ed.2d 512 (1989) (holding that, by using the phrase "shall order" in a different forfeiture statute, "Congress could not have chosen stronger words to express its intent that forfeiture be mandatory in cases where the statute applied").
Criminal forfeiture is separate from the discretionary sentencing considerations under 18 U.S.C. § 3551. Unlike a fine, which the district court retains discretion to reduce or eliminate, the district court has no discretion to reduce or eliminate mandatory criminal forfeiture. See 18 U.S.C. § 3554 ("The court . . . shall order, in addition to the sentence that is imposed pursuant to the provisions of section 3551, that the defendant forfeit property to the United States. . . ." (emphasis added)); 28 U.S.C. § 2461(c) (providing that, for all criminal forfeitures, "the court shall order the forfeiture of the property. . . pursuant to the Federal Rules of Criminal Procedure and section 3554 of title 18"). Forfeiture is not a "disguised fine" such that the rules applicable to fines apply equally to forfeiture. See Casey, 444 F.3d at 1076 ("We disagree that allowing money judgments in forfeiture cases erases the distinctions between fines and forfeitures.").
To be sure, the Supreme Court has recognized that there are constitutional limits to forfeiture. For example, prosecutorial misconduct amounting to a due process violation limits the government's power to seek criminal forfeiture. Libretti v. United States, 516 U.S. 29, 42-43, 116 S.Ct. 356, 133 L.Ed.2d 271 (1995) (citing Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 634, 109 S.Ct. 2646, 105 L.Ed.2d 528 (1989)). And criminal
Criminal forfeiture is also separate from restitution, which serves an entirely different purpose. "Congress conceived of forfeiture as punishment for the commission of various [crimes]." Libretti, 516 U.S. at 39, 116 S.Ct. 356 (emphasis added). "The purpose of restitution . . ., however, is not to punish the defendant, but to make the victim whole again by restoring to him or her the value of the losses suffered as a result of the defendant's crime." United States v. Hunter, 618 F.3d 1062, 1064 (9th Cir.2010) (emphasis added) (internal quotation marks and brackets omitted). Accordingly, we have held that "defendants may be required to pay restitution and forfeit the same amounts." United States v. Boulware, 384 F.3d 794, 813 (9th Cir. 2004). Applying that rule in Boulware, we held that the defendant was not entitled to a credit for the amount that he had repaid toward the fraudulently obtained loan. Id. In the absence of a statute authorizing a reduction in forfeiture, the district court may not reduce forfeiture because of an order of restitution to a victim or because the victim already has been made whole.
Although Defendants must pay both restitution and criminal forfeiture, that result is not an impermissible "double recovery." We agree with the Tenth Circuit's recent explanation:
United States v. McGinty, 610 F.3d 1242, 1247-48 (10th Cir.2010) (paragraph break,
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:
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
"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
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.
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.
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.").
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:
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
We vacate and remand with instructions. In Newman's case, the district court shall enter a criminal forfeiture money judgment of $5,102. In Tedesco's case, the district court shall either enter a criminal forfeiture money judgment of $1 million or, if there is a reason to doubt the accuracy of that agreed amount, follow the procedure described above and enter a criminal forfeiture money judgment in the amount of the "proceeds" of Tedesco's crime, not to exceed $1 million.