Q: What do you call a
forfeiture order that seizes proceeds from dismissed or acquitted counts?
States v. Henry Lo, 2016 WL 5799706 (9th Cir. Oct. 5, 2016), decision
Decision by Judge Ikuta, joined by Judge Clifton and DJ Lamberth.
appeal by NorCal CJA stalwart Martha Boersch, of Boersch Shapiro LLP.
Facts: Lo was charged with wire and mail fraud. Id. at *1. He pleaded guilty to some of the counts in the indictment, in
a standard NorCal plea agreement: a detailed fact pattern in paragraph 2, a
concession of fraud proceeds of over $2 million, and an appellate waiver. Id. at *2-*3. The plea agreement
specified a restitution amount of no less than $1.7 million. Id. at *3.
Before sentencing, the
government moved for a forfeiture order of over $2.3 million. Id. After sentencing, the Court ordered
a forfeiture money judgment of over $2.3 million, and also ordered Lo pay $2.3
million in restitution. Id. Lo
Issue(s): “Before addressing Lo’s claims, we must first
address the government’s argument that Lo waived his right to appeal any aspect
of the sentence by agreeing to an appeal waiver in his plea agreement.” Id. at *4.
Lo validly waived his right to appeal, and none of the exceptions to such
waivers are applicable, we dismiss this appeal.” Id. at *1.
Of Note: Lo is now a seminal case in the Ninth on restitution and forfeiture. The
decision first lays out the contractual interpretations of plea agreements,
discusses exceptions to those interpretations, and describes the interplay
between restitution and forfeiture. In so doing Lo sets forth several new rules.
It has long been a requirement
that a defendant receive notice before being hit with restitution. That notice requirement doesn’t apply, Judge Ikuta
explains, to forfeiture orders – a beast
authorized by an entirely different statute. Id. *8. “Therefore, an appeal waiver can validly waive the right to
appeal a forfeiture order issued as part of the sentence regardless of whether
the plea agreement provides the defendant with a reasonably accurate estimate
of the amount of forfeiture or whether the defendant was given adequate notice
before a district court determined that amount.” Id. at *9.
The take-away? Your client’s dough is being grabbed:
either through a restitution order, or a forfeiture order. If the money is
seized through restitution, there are specific notice requirements that – if not
followed – can undermine the validity of an appellate waiver.
If the funds are seized
through forfeiture? Not so much.
How to Use:
forfeiture statute the government can get a forfeiture order to seize proceeds
of the crimes for which the defendant was convicted. If the defendant is
convicted of counts 1, 2, and 3, can the court order forfeiture of proceeds
from crimes alleged in dismissed (or acquitted)
counts 4, 5, and 6?
In another new rule, Judge Ikuta holds, “yes.”
Seventh Circuit, the Ninth concludes that the “proceeds of the crime of
conviction” for forfeiture “consist of the funds involved in that fraudulent
scheme, including additional executions of the scheme that were not
specifically charged or on which the defendant was acquitted.” Id. at
*12 (emphasis added).
This is analogous to that cursed guideline “relevant conduct:” a concept
that can scoop up and punish charges for which your client was actually acquitted. Same
idea, now expanded to forfeiture.
Before assuring your client a deal or trial could
provide some finality, have a hard talk about the forfeiture ramifications of
those dismissed (or even acquitted) counts.
Reading: What’s with the surging interest
in forfeiture and restitution? Turns out that grabbing the funds is an active
prosecution priority of DOJ. For an
accessible summary of DOJ’s blurb on restitution and forfeiture, see DOJ post here.
For a gleeful DOJ Powerpoint that gloats that a lack of a criminal conviction needn’t
stand in the way of forfeiture, see pdf
available here. (“No criminal restitution order? No problem!”)
Labels: Appellate Waiver, Forfeiture, Ikuta, Plea Agreements, Restitution, Rule 11