Money Money Money Money–Money!! the Financial Aspects of a Federal Criminal Sentence

All lawyers need to keep up with their reading, and criminal defense attorneys are no different.  I’ve been plowing through recent federal criminal cases, and came across three (not from the Atlanta area) that deal with the financial aspects of a federal criminal sentence.  Each sort of reminds me of the Ojay’s song, “For the Love of Money”  with that great refrain, “Money Money Money Money, MONEY!”

OK, class, let’s remember the basics.  A federal criminal sentencing hearing involves more than just the amount of time a person might have to go to prison.  A federal judge can also impose three distinct types of financial orders that require payment.  First there is a “fine”, which usually can be up to $250,000 per count, this money is considered “punishment” and the payment goes directly to Uncle Sam.  Next, there is “restitution”.  This is supposed to pay back victims any loss they suffered from the crime, and while the Defendant pays this money to the Clerk of the Court, the money goes back to the victim eventually.  Then, we have the often misunderstood “forfeiture.”  Under the current version of this old doctrine, property used in or obtained as a result of a crime belongs to the government from the moment the crime took place.  If that property has been used up (or in the case of real money, has been spent) then the government can try to get an equal amount out of the Defendant using the “substitute assets” rule.  The forfeiture payments also go right to the U.S.  And, here’s the kicker: if a Defendant is able to pay, he or she can be forced to pay all three amounts for the same crime, meaning triple whammy for any person of means who is convicted of a federal offense.

Now to our recent decisions discussing some of these financial aspects of federal criminal sentencing.     In United States v. Green 16-3044-2018-07-31, the Defendant’s Mom got VA benefits, and when her mother passed away, Ms. Green kept spending the monthly check without telling the VA. This went on for many years, and it took many years more before the government got around to charging her with a crime in New York.  Ms. Green was required to pay restitution, but the question was how far back did her restitution obligation go, especially since many of the monthly payments were outside the 5-year statute of limitations?  The prosecutors argued that embezzlement of this sort is a “continuing crime”, meaning that they wanted her to pay restitution back to the point when the Defendant’s mother died. Nope, said the Second Circuit, only those within the limitations period qualify as restitution.

Next we have US v. Bradley 17-5725-2018-08-01[1],  involving the separate concept of forfeiture.  The conspiracy in Michigan and Tennessee netted around $1 million, and the Judge made Mr. Bradley jointly and severally liable for the whole amount, meaning anything his co-defendants did not pay he would be on the hook for.  A big forfeiture case handed down last year by the Supreme Court invalidated this, noted the Sixth Circuit: “The two requirements of the statute, the Court observed, ‘limit forfeiture under § 853 to tainted property’ and ‘define[] forfeitable property solely in terms of personal possession or use.’… But joint and several liability puts defendants on the hook regardless of their share of the fault or the proceeds, meaning it would require forfeiture of untainted property’ as well as amounts the defendant did not ‘obtain[].'”  Last year’s Supreme Court decision  “…puts an end to such collective liability.”

Finally, we have a case out of the Eighth Circuit, US v. Mann 17-2060-2018-07-27[1]  .  Technically, this is not a “criminal forfeiture” case, because the forfeiture of 93 weapons discussed came about years after Dr. Mann was convicted in Arkansas for placing a grenade in a tire leaning up against the vehicle of another doctor.  However, the case is interesting for one major reason.  At trial, Dr. Mann was charged with yet found not guilty of possessing a certain shotgun.  Then, the government brought a civil forfeiture against the shotgun, arguing that it belonged to the government.  Amazingly, winning the criminal charge did not prevent the government from prevailing in its civil forfeiture action regarding the shotgun. Go figure, or a client once said to me: “it’s the US versus me, we are in a US Court and the Judge is paid from the US treasury, yeah, this should be fair!”

Back to my reading…