JOAN A. LENARD, District Judge.
On July 12, 2011, a Grand Jury returned an Indictment charging Defendant, Alvaro Lopez Tardon, and others, with conspiring to launder money. (See D.E. 3.) The Indictment's forfeiture allegations included a money judgment, bank accounts, and real and personal property. (See id. at 4-11.) On July 13, 2011, the Court issued a Post-Indictment Restraining Order, restraining twenty-six bank accounts belonging to Defendant and/or his co-conspirators. (See D.E. 10.)
On May 29, 2012, a Grand Jury returned a Second Superseding Indictment ("SSI") charging Defendant with one count of conspiring to launder money in violation of 18 U.S.C. § 1956(h) (Count 1) and thirteen counts of substantive money laundering in violation of 18 U.S.C. § 1957 (Counts 2 through 14). (See D.E. 203.) The SSI also contained forfeiture allegations seeking a money judgment of $26,443,771.00, twelve luxury automobiles, sixteen pieces of real property, twenty-six bank accounts, and several other items. (Id. at 5-11.)
On June 11, 2014, a jury convicted Defendant of all charges. (See Jury Verdict, D.E. 484.) The jury was retained for forfeiture proceedings which occurred on June 12, 2014. (See D.E. 488.) The jury returned a Special Verdict finding that some, but not all, of the property listed in the SSI's forfeiture allegations was involved in or traceable to the offenses of conviction, and therefore subject to criminal forfeiture ("forfeitable property"). The forfeitable property includes:
(Special Verdict, D.E. 487 at 1-3, 9-10, 12-19.)
The property that the jury did not find was subject to forfeiture ("non-traceable property") includes:
(See Special Verdict, D.E. 487.)
After the jury was released, the Court questioned the Parties about the custody of the non-traceable property:
So I'm concerned about the preservation, how those items are going to be preserved pending my decision on the money judgment and sentencing.
I believe the real properties are all under a notice of lis pendens. So they cannot be disposed of. And all of the other assets are under custody of the United States.
(Transcript (6/12/14), D.E. 536 at 139-141.) Thus, the non-traceable property is currently being held by the Government pursuant to an agreed-upon protective order, pending the Court's ruling herein. Defendant seeks the return of the non-traceable property to satisfy outstanding legal fees and fees for appellate counsel of choice. (Motion for Return of Property at 1.) The Government seeks forfeiture of the non-traceable property as substitute assets to satisfy a prospective forfeiture money judgment. (Forfeiture Motion at 10-11.)
On July 1, 2014, the Court entered a Preliminary Order of Forfeiture, ordering the forfeitable property to be turned over to the United States pursuant to 18 U.S.C. § 982(a)(1). (D.E. 496 ¶ 7.) On July 11, 2014, Defendant filed a Motion to Vacate and to Reconsider Preliminary Forfeiture (D.E. 499), which the Court denied by Order entered August 19, 2014 (D.E. 558).
On July 30, 2014, Defendant filed the instant Motion for Return of Property seeking an Order returning the non-traceable property to him to satisfy legal expenses. (D.E. 517.) On August 11, 2014, the Parties filed a Joint Motion in which they agreed that "the status quo regarding the `non-traceable' assets that are the subject of the motion for return of property [DE 517] shall remain in effect until the court rules on the motion." (D.E. 543 ¶ 4.)
On August 15, 2014, the Government filed the instant Motion for Forfeiture Money Judgment and for Order of Forfeiture of Substitute Assets. (D.E. 550). Therein, the Government seeks a forfeiture money judgment pursuant to Federal Rule of Criminal Procedure 32.2(b)(1)(B) in the amount of $14,358,639.64, and the forfeiture of the non-traceable property as substitute assets pursuant to 21 U.S.C. § 853(p) in partial satisfaction of the prospective forfeiture money judgment. (D.E. 550.)
The Court is presented with two competing motions—one from the Government, one from the Defendant—both seeking entitlement to the non-traceable property. For the Government to be entitled to the non-traceable property as substitute assets in partial satisfaction of the forfeiture money judgment, the Court must determine whether the Government is entitled to a forfeiture money judgment.
The Government argues that it is entitled to a forfeiture money judgment in the amount of $14,358,639.64 pursuant to Federal Rule of Criminal Procedure 32.2(b)(1)(B), as well as forfeiture of the non-traceable property as substitutes assets in partial satisfaction of the prospective forfeiture money judgment. (Motion at 1.) Defendant argues that the Government's Forfeiture Motion is untimely and fails on its merits.
Defendant argues that the Forfeiture Motion is untimely (1) under Federal Rule of Criminal Procedure 32.2, (2) for failing to comply with the Court's Order of June 6, 2014,
First, Defendant argues that "the motion is untimely under Fed.R.Crim.P. 32.2, which requires that the government proceed directly after the verdict—and well before sentencing—to pursue any forfeiture order authorized by statute." (Id. at 2.) In Reply, the Government contends that it complied with Rule 32.2 by filing the Motion prior to the sentencing hearing.
Rule 32.2(b)(1)(A) provides, in relevant part, that "[a]s soon as practical after a verdict or finding of guilty, ... on any count in an indictment or information regarding which criminal forfeiture is sought, the court must determine what property is subject to forfeiture under the applicable statute.... 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)(4) provides that "[t]he court must include the forfeiture when orally announcing the sentence or must otherwise ensure that the defendant knows of the forfeiture at sentencing." Thus, the rule's "[a]s soon as practical" language refers to when the Court's forfeiture determination must occur, not when the Government's motion regarding forfeiture must be filed. It appears, then, that a motion for forfeiture is timely so long as it enables the Court to make a forfeiture determination "[a]s soon as practical after a verdict or finding of guilty[.]" Fed. R.Crim.P. 32.2(b)(1)(A).
The Court finds that the soonest practical time to determine the amount of a forfeiture money judgment was the sentencing hearing. The amount of money the Government seeks is the amount of money Defendant laundered as stated in Paragraph 15 of the Presentence Investigation Report (PSR): $14,358,639.64. (See PSR ¶ 15 ("
Because the soonest practical time for the Court to determine the amount of a forfeiture money judgment in this case was the sentencing hearing, the Court finds that the instant Motion—filed four days before the sentencing hearing was scheduled to begin and six days before it actually commenced on August 21, 2014 (see D.E. 548)—is timely under Rule 32.2.
Second, Defendant argues that the Government failed to comply with the Court's June 6, 2014 Order directing the Government to respond to Defendant's Forfeiture Memorandum (see D.E. 472), filed June 4, 2014. (Response at 3.) After sending the jury to the jury room for deliberations on June 6, 2014, the Court stated:
(Transcript (6/6/14), D.E. 538 at 63-64.) Neither side objected to the Court's directive on grounds of timeliness or otherwise. The Government contends that it did comply with the Court's June 6 directive by first addressing the issue in its Bench Memorandum Regarding Criminal Forfeiture (D.E. 454), filed May 21, 2014, and again in the instant Motion, filed August 15, 2014.
The Court finds that the Government satisfied the Court's Order to respond to Defendant's memorandum by filing the instant Motion for Forfeiture Money Judgment. And, in any event, the Government
Third, Defendant argues that the instant Motion is untimely because the Government failed to file it by the July 21, 2014 presentence objection deadline. That is, the PSR does not recommend a forfeiture money judgment, the Government did not timely object to the PSR, and it therefore waived the relief sought by the instant Motion. (Response at 4.) The Government argues that "the absence in the PSR of any reference to the fact that United States is seeking a forfeiture money judgment does not preclude the Court from imposing this sanction against the Defendant. Criminal forfeiture is a mandatory part of the Defendant's sentence." (Reply at 7.) It further argues that
(Id. at 8.) The "good cause" the Government cites is the fact that forfeiture is a mandatory part of the sentence and should be included in the PSR, and that "Defendant was made aware well in advance of the commencement of the sentencing hearing that the Government was seeking a forfeiture money judgment as part of his sentence." (Id.)
Federal Rule of Criminal Procedure 32.2 addresses Criminal Forfeiture. Rule 32.2(a) provides:
Thus, the Rule does not require the Government to formally "move" for a forfeiture money judgment, but rather to provide notice in the Indictment of its intent to seek a money judgment. See id. In this case, the Government provided such notice in the Second Superseding Indictment, by requesting: "Approximately $26,443,771 in United States currency, which is a sum equal in value to the property involved in the violations alleged in this Second Superseding Indictment, which the United States will seek as a personal forfeiture money judgment...." (SSI ¶ 3(a).)
Rule 32.2(b)(1), which deals with the forfeiture phase of the trial, is likewise silent as to any requirement for the government to formally move for a money judgment. Rather, as previously discussed, that rule merely requires the Court "to determine the amount of money that the defendant will be ordered to pay" if the Government seeks a money judgment. Of course, the Court knew the Government sought a money judgment by virtue of including it in the SSI (D.E. 203 at 5) and their Bench Memorandum Regarding Criminal Forfeiture (D.E. 454 at 5), and arguing for one in open Court (see Transcript (6/3/14) D.E. 532 at 165-66).
Finally, the Sentencing Guidelines state that "fflorfeiture is to be imposed upon a
To the extent that such an objection is required under the rules or by law, the Court accepts the objection raised in the Government's Reply brief. (See Reply at 8.) Rule 32(i)(1)(D) provides: "At sentencing, the court: may, for good cause, allow a party to make a new objection at any time before sentence is imposed." Allowing the objection will not result in prejudice to the Defendant who was on notice of the Government's intent to seek a forfeiture money judgment. (See SSI ¶ 3(a); see also United States' Bench Memorandum Regarding Criminal Forfeiture, D.E. 454 at 5-6; Transcript (6/6/14) D.E. 538 at 63-64.)
In sum, the Court finds that the instant Motion is timely under Rule 32.2, the Court's previous Orders, and the relevant deadlines. The Court therefore orders that the PSR be modified to reflect the money forfeiture issue, and adopts the PSR as modified. The Court now turns to the merits of the Government's Motion.
The Government seeks a forfeiture money judgment pursuant to Federal Rule of Criminal Procedure 32.2(b)(1)(B) in the amount of $14,358,639.64, and the forfeiture of certain assets as substitute property pursuant to 21 U.S.C. § 853(p) in partial satisfaction of the prospective forfeiture money judgment. (Id. at 1.)
As an initial matter, the Court previously found, when it adopted the factual findings contained in the revised PSR during the sentencing hearing on August 27, 2014, that the Government has proven by a preponderance of the evidence that Defendant laundered $14,358,639.64. See United States v. Cabeza, 258 F.3d 1256, 1257-58 (11th Cir.2001) ("Because Apprendi does not apply to forfeiture proceedings, our earlier decisions on the burden of proof in such proceedings remain good law: the burden of proof on a forfeiture count is a preponderance of the evidence.") (citing United States v. Dieter, 198 F.3d 1284, 1289 (11th Cir.1999)). Specifically, as summarized by the Government's Motion:
(Motion at 9.) The Government supplemented the trial record with Special Agent Gaitan's sentencing hearing testimony on August 21, 2014 and with Exhibit 1—a spreadsheet detailing the date, amount, sender, and receiver of wire transfers sent directly to third parties in the United States which total $2,910,073.05. Thus, the Court adopts its previous finding that the Government has proven by a preponderance of the evidence that Defendant laundered $14,358,639.64. The Court now turns to whether the Government is entitled to a forfeiture money judgment in that amount.
First, the Government argues that it is entitled to a forfeiture money judgment in the amount of $14,358,639.64, "as this is a sum of money equal in value to the property, real or personal, involved in the money laundering offenses of which defendant was found guilty, and/or equal in value to the property traceable to such property." (Motion at 7.) Defendant argues that "[t]he statute under which the government is proceeding, [18 U.S.C.] § 982(a)(1), does not provide for a generalized money judgment, and does not address `proceeds' in the sense that other forfeiture provisions are concerned. Instead, § 982(a)(1) is much more narrow and goes to either particular property or property traceable from that particular property." (Response at 5.) "Only specific property as to which the 18 U.S.C. § 982(a)(1) statutory nexus is established is eligible for forfeiture, leaving the government's claim for a right to money judgment lacking in statutory and case support." (Id. at 6.)
Title 18 U.S.C. § 982(a)(1) provides: "The court, in imposing sentence on a person convicted of an offense in violation of section 1956, 1957, or 1960 of this title, shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property." The Government relies on United States v. Seher, 562 F.3d 1344, 1372 (11th Cir.2009), for this Court's authority to impose a forfeiture money judgment under section 982(a)(1). (Motion at 6-7.)
In Seher, three appellants—an individual (Seher) and two business entities—were found guilty of, inter alia, money laundering and conspiracy to launder money. 562 F.3d at 1350. The trial court entered a forfeiture money judgment of $1,610,400 against Seher pursuant to 18 U.S.C. § 982(a)(1), finding "that the evidence adduced at trial demonstrated that Defendant Seher conspired to launder $1,610,400 in drug proceeds during the course of the conspiracy." United States v. Seher, 574 F.Supp.2d 1368, 1370 (N.D.Ga.2007). It further ordered that Seher's real property could "be forfeited as a substitute asset in partial satisfaction of the money judgment against hi m," in the event he could not pay the $1,610,400 judgment in full. See id. at 1370-71. On appeal, Seher argued that the trial court "erred in finding that his real property could be a substitute asset under 21 U.S.C. § 853(p) for the $1,610,400 laundered in connection with the drug conspiracy...." Seher, 562 F.3d at 1372. He argued (1) that the funds actually belonged to a jewelry store he worked at and that he should be deemed an intermediary, and (2) that the government failed to prove that he caused the property be unavailable. Id.
The Eleventh Circuit rejected both arguments. In doing so, it noted that because Seher "was convicted of conspiracy
Defendant next argues that the Government is not entitled to a forfeiture money judgment in addition to forfeiture of Defendant's personal property.
The Government's Reply, however, asserts that "once the Government obtains a
Finally, Defendant argues that the value of the property already forfeited pursuant to the preliminary forfeiture order exceeds the total amount of funds wired from Spain, which he argues is only $9,600,000. (Response at 13.) First, the Court has already found that the Government has sustained its burden of proving by a preponderance of the evidence that Defendant laundered $14,358,639.64. Second, the values Defendant cites are estimates from websites. (See id. at 15.) He does not cite any authority for the proposition that the value of forfeited property is determined by website estimates rather than sale price. The Court finds that the value of the forfeited assets must be determined from their sale after a final order of forfeiture is entered. Defendant's argument is therefore rejected as premature.
In sum the Court finds that a forfeiture money judgment is available under 18 U.S.C. § 982(a)(1). See Seher, 562 F.3d at 1373; Puche, 350 F.3d at 1153. The Court further finds that the Government is not seeking to "double dip" by securing a money judgment in addition to the proceeds from the sale of the forfeited assets, but rather that it seeks a $14,358,639.64 money judgment against which it will credit the amounts generated from the sale of forfeited assets. The Court now turns to whether the Government is entitled to substitute assets to satisfy any deficiency in the judgment.
The Government argues that "once a forfeiture money judgment is entered, the United States may move at any time, pursuant to Rule 32.2(e)(1)(B) of the Federal Rules of Criminal Procedure, to forfeit specific property belonging to the defendant having a value up to the amount of the money judgment as substitute assets." (Motion at 10.) As previously discussed, the Government is seeking forfeiture of the non-traceable property, which includes:
(i) Seven (7) miscellaneous items of jewelry:
(Motion at 10-11.) Defendant argues that (1) there is sufficient value in the assets subject to the preliminary forfeiture order to satisfy the judgment, and (2) even if there was not sufficient value in those assets, the substitute assets the Government seeks to be forfeited "are owned by other entities or persons" and "[t]he substitute asset theory applies only to property owned by the defendant." (Response at 16.) Immediately thereafter, however, Defendant concedes that he owns at least some of the personal property sought by the Government as substitute assets. (Id.)
Federal Rule of Criminal Procedure 32.2(e)(1)(B) authorizes the Court, on the Government's motion, to enter an order of forfeiture or amend an existing order of forfeiture to include substitute property that qualifies for forfeiture under an applicable statute. Here, the applicable statute is 21 U.S.C. § 853(p), which is incorporated by reference into section 982(b), and provides:
Thus, to be entitled to forfeiture of substitute property, the Government must demonstrate that the property subject to forfeiture is unavailable due to an act or omission by Defendant. See id.; see also United States v. Candelaria-Silva, 166 F.3d 19, 42 (1st Cir.1999).
The Government's Motion alleges that Special Agent Gaitan investigated and concluded that "assets once owned or controlled by the defendant cannot be located upon the exercise of due diligence; have been transferred or sold to, or deposited
However, because Defendant is seeking return of the assets that the Government seeks as substitute property, the Court must address Defendant's competing Motion for Return of Property and to Release Lis Pendens.
Defendant's Motion for Return of Property and to Release Lis Pendens requests the Court "to enter an order compelling the government to return/release assets that were deemed by the jury's verdict to be not traceable to the charged offenses." (D.E. 517 at 1.) It further requests the Court "to release the lis pendens that currently cloud the title to four real properties also deemed by the jury's verdict to be not traceable to the charged offenses." (Id.) "At a minimum defendant seeks to use those assets—in accordance with his Sixth Amendment rights—to pay pending legal bills for trial counsel and fees for appellate counsel of choice." (Id.) He attaches an invoice indicating that he owes counsel $104,308.73. (Id. at 9.) The Government argues that if the Court grants the relief sought in its Motion for Money Judgment and for Order of Forfeiture of Substitute Assets then the issues raised by Plaintiffs motion become moot. (D.E. 552 at 5.) It also argues that "the Court is required to enter an order forfeiting this substitute property pursuant to § 853(p) notwithstanding the Defendant's claim of right under the Sixth Amendment to the same assets for purposes of satisfying the balance apparently due for legal services ...." (D.E. 572 at 3.)
The Court has considered both Parties' arguments and finds that Defendant should be able to recover enough of the non-traceable property to satisfy the out-standing legal fees he identifies in the Motion and accompanying invoices. See United States v. Luis, 966 F.Supp.2d 1321, 1335 (S.D.Fla.2013). In Luis, the defendant sought the return of property enjoined pursuant to 18 U.S.C. § 1345, which "allows courts to grant injunctive relief to prevent certain types of fraud and to prevent
It appears that the Court in Luis declined to exercise its discretion to release assets to satisfy attorney's fees because she did not need the money to "secure" counsel, who had already represented her throughout the section 1345 proceedings. See id.
Here, Defendant is requesting a release of assets to satisfy legal fees incurred during trial and to retain appellate counsel of record. (D.E. 517 at 3.) He signed an agreement with defense counsel's law firm, and he owes that law firm $104,308.73 for services rendered. The Court finds that Defendant should be permitted to recover enough non-traceable assets to satisfy the $104,308.73 amount identified in his Motion.
In sum, the Court concludes that the Government is entitled to an Order of Forfeiture of Substitute Assets with respect to the non-traceable property to satisfy any deficiency in the money judgment. However, the Court finds that Defendant should be permitted to satisfy his out-standing $104,308.73 legal bill with proceeds of the non-traceable property. See Luis, 966 F.Supp.2d at 1335. Therefore, the Government shall release and return to Defendant the 2010 Rolls-Royce Ghost (VIN: SCA664S50AUX48905) so that he can satisfy the outstanding legal fees identified by the invoice included in his Motion. (See D.E. 517 at 9.) In the event the 2010 Rolls-Royce Ghost sells for less than $104,308.73, Defendant shall notify the Court of the deficiency. In the event the 2010 Rolls-Royce Ghost sells for more than $104,308.73, Defendant shall remit the net profit to the Government in partial satisfaction of the forfeiture money judgment Ordered herein.
Accordingly, it is
