United States District Court, D. South Carolina, Columbia Division
DAVID C. NORTON, District Judge.
This matter is before the court on a motion for preliminary order of forfeiture filed by the United States of America (the "government") in the instant criminal action. In light of the evidentiary record and for the reasons set forth below, the court grants the government's motion for preliminary order of forfeiture.
On October 17, 2013, the government filed a fifty-two count superseding indictment against Eric Robinson ("Robinson") and Jonathan N. Pinson ("Pinson"), charging them with a variety of crimes including conspiracy to engage in racketeering in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(d), Hobbs Act violations, wire fraud, and others. The indictment contained a notice to Pinson that the government "will seek the forfeiture of property as part of any sentence in accordance with the applicable statute" and in compliance with Federal Rule of Criminal Procedure 32.2(a).
On July 3, 2014, a jury found Pinson guilty of: racketeering, in violation of 18 U.S.C. § 1962; theft concerning programs receiving federal funds, in violation of 18 U.S.C. § 666; conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1343; mail fraud, in violation of 18 U.S.C. § 1342; wire fraud, in violation of 18 U.S.C. § 1343; money laundering, in violation of 18 U.S.C. §§ 1956 and 1957; and false statements to federal agencies, in violation of 18 U.S.C. § 1001.
On November 21, 2014, the government filed a motion for preliminary order of forfeiture pursuant to 21 U.S.C. § 853. Pinson filed a response in opposition on December 19, 2014. The government filed a reply on January 9, 2015. Upon Pinson's request and in compliance with Federal Rule of Criminal Procedure 32.2(b)(1)(B), the court conducted an evidentiary hearing on March 11, 2015. The court requested that each party submit a letter outlining their forfeiture arguments and tying the amounts to trial exhibits, trial testimony, and the evidence. Both parties submitted letters to the court on March 23, 2015. The motion is now ripe for the court's review.
Federal Rule of Criminal Procedure 32.2(b)(1)(A) states that "as soon as practical after a verdict or finding of guilty... the court must determine what property is subject to forfeiture under the applicable statute." "A court must not enter a judgment of forfeiture in a criminal proceeding unless the indictment or information contains notice to the defendant that the government will seek forfeiture of property as part of any sentence in accordance with the applicable statute." Fed. R. Crim. P. 32.2(a). The court must base its determination on evidence already in the record, and if the forfeiture is contested, the court must conduct a hearing after the verdict on either party's request. Fed. R. Crim. P. 32.2(b)(1)(B). If the court finds that the property is subject to forfeiture, the court must promptly enter a preliminary order of forfeiture setting forth the amount of any money judgment. Fed. R. Crim. P. 32.2(b)(2)(A). "Unless doing so is impractical, the court must enter the preliminary order sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final." Id. at R. 32.2(b)(2)(B).
"A district court may order the forfeiture of (1) proceeds obtained as a result of the crime for which a defendant was convicted or (2) property used or intended to be used to commit or to facilitate the commission of the crime for which a defendant was convicted." United States v. Herder, 594 F.3d 352, 363-64 (4th Cir. 2010) (citing 21 U.S.C. § 853(a)). The government has the burden of proof and must establish that the property is subject to forfeiture by a preponderance of the evidence. Id. at 364. Section 21 U.S.C. § 853 "is not limited to property that the defendant acquired individually but includes all property that the defendant derived indirectly from those who acted in concert with him in furthering the criminal enterprise." United States v. McHan, 101 F.3d 1027, 1043 (4th Cir. 1996). "[W]here the proceeds of the offense are no longer traceable or available, a personal monetary judgment is appropriate." United States v. Jameel, 2014 WL 5317860, at *1 (E.D. Va. Oct. 16, 2014).
Under Rule 32.2(b)(1), the court is required to determine whether the government has "established the requisite nexus between the property and the offense." The Fourth Circuit utilizes the "substantial connection" standard under which "the government must establish that there was a substantial connection between the property to be forfeited and the offense." Herder, 594 F.3d at 364. The government must establish the requisite nexus by a preponderance of the evidence because forfeiture constitutes an aspect of the sentence imposed rather than a substantive element of an offense. United States v. Neal, 2003 WL 24307070, at *2 (E.D. Va. Sept. 29, 2003) (citing Libretti v. United States, 516 U.S. 29, 39 (1995); United States v. Tanner, 61 F.3d 231, 235 (4th Cir. 1995)). The government "may rely on circumstantial evidence to meet this burden of proof." United States v. Patel, 949 F.Supp.2d 642, 648 (W.D. Va. 2013) (citing Herder, 594 F.3d at 364). At sentencing, the court must make the order of forfeiture "part of the sentence and... include  [it] in the judgment." Fed. R. Crim. P. 32.2(b)(3).
The government seeks forfeiture pursuant to the following three statutory provisions: (1) 18 U.S.C. § 1963(a)(1) for violation of 18 U.S.C. § 1962 (RICO); (2) 18 U.S.C. § 981(a) for violations of 18 U.S.C. § 666 (theft or bribery of federal program funds), 18 U.S.C. § 1951 (Hobbs Act), 18 U.S.C. §§ 1343 and 1341 (mail and wire fraud); and (3) 18 U.S.C. § 982(a)(1) for violations of 18 U.S.C. §§ 1956 and 1957 (money laundering).
Title 18 U.S.C. § 1963 is the forfeiture statute that applies to RICO violations. The statute states that "[w]hoever violates any provision of section 1963 of this chapter... shall forfeit to the United States... any interest the person has acquired or maintained in violation of section 1962, any interest in, security of, claim against, or property or contractual right, as well as any proceeds which the person obtained, directly or indirectly, from racketeering activity." 18 U.S.C. § 1963(a). "As the Fourth Circuit has observed, the RICO statute contains what is by far the most far reaching forfeiture provision, sweeping far more broadly than the substantive RICO offense itself.'" United States v. Rosga, 864 F.Supp.2d 439, 442-43 (E.D. Va. 2012) (quoting United States v. Cherry, 330 F.3d 658, 669 n.18 (4th Cir. 2003)).
Title 18 U.S.C. § 981(a) is an umbrella forfeiture statute that generally applies to civil forfeitures. However, 28 U.S.C. § 2461(c) provides:
If a person is charged in a criminal case with a violation of an Act of Congress for which the civil or criminal forfeiture of property is authorized, the Government may include notice of the forfeiture in the indictment or information pursuant to the Federal Rules of Criminal Procedure. If the defendant is convicted of the offense giving rise to the forfeiture, 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 and section 3554 ...