Remand from the Supreme Court of the United States. ( S.Ct.
Ray Pope, WILLIAMS MULLEN, Richmond, Virginia, for Appellant.
Christopher John Catizone, OFFICE OF THE UNITED STATES
ATTORNEY, Alexandria, Virginia, for Appellee.
GREGORY, Chief Judge, KEENAN, and FLOYD, Circuit Judges.
GREGORY, CHIEF JUDGE
Chittenden was convicted of bank fraud and conspiracy to
commit bank and mail fraud for her role in a fraudulent
mortgage scheme. Although Chittenden received only $231, 000
in proceeds from these crimes, the district court ordered her
to forfeit over $1 million to cover proceeds that her
co-conspirators had received and dissipated. In United
States v. Chittenden, 848 F.3d 188 (4th Cir. 2017), we
affirmed Chittenden's conviction and sentence. The
Supreme Court later decided Honeycutt v. United
States, 137 S.Ct. 1626 (2017), vacated our original
decision in this case, and remanded for us to reconsider our
holding in light of Honeycutt. Chittenden v. United
States, 138 S.Ct. 447, 447-48 (2017) (mem.). For the
reasons below, we now vacate the district court's
forfeiture orders and remand for further proceedings. All
other aspects of the district court's judgment are
2013, a federal grand jury indicted Lorene Chittenden for
originating and submitting fraudulent mortgage loan
applications. At the government's request, the
district court restrained nearly all of Chittenden's
assets pending the outcome of the charges. After a seven-day
trial, a jury convicted Chittenden of one count of conspiracy
to commit bank and mail fraud, under 18 U.S.C. § 1349,
and ten counts of bank fraud, under 18 U.S.C. § 1344.
The evidence showed that Chittenden, a loan officer at George
Mason Mortgage, earned hundreds of thousands of dollars in
loan commissions by falsely inflating the incomes of
unknowing, first-time homebuyers. Higher stated incomes
resulted in larger loans, and because each commission was a
percentage of the loan, larger loans generally meant higher
loan commissions. Chittenden worked in concert with numerous
realtors who received hefty real estate commissions by
selling houses to her clients. Similar to the loan
commissions, each real estate commission was a percentage of
the house's sale price such that higher sale prices
resulted in greater profits for the realtors.
the district court entered a forfeiture order under 18 U.S.C.
§ 982(a)(2), pursuant to the procedures in 21 U.S.C.
§ 853. The order consisted of a $1, 513, 378.82
money judgment "representing the foreseeable proceeds of
the offenses of which the defendant has been found
guilty." J.A. 1967. The court noted that Chittenden
personally had received only $231, 000 in fraudulent loan
commissions and that none of Chittenden's restrained
assets were proceeds traceable to the fraud-indeed, the
government had stipulated as much. But, relying on our
decision in United States v. McHan, 101 F.3d 1027
(4th Cir. 1996), the court concluded that Chittenden was
jointly and severally liable for the reasonably foreseeable
proceeds of the conspiracy.
because the government had not recovered any proceeds from
Chittenden's co-conspirators, it moved for forfeiture of
Chittenden's untainted, restrained assets to satisfy the
entire $1, 513, 378.82 money judgment. Under 21 U.S.C. §
853(p), a court "shall order the forfeiture of any
[untainted] property of the defendant" when, "as a
result of any act or omission of the defendant," the
proceeds of the underlying crime have been placed beyond the
court's reach. The district court found that
Chittenden's co-conspirators had dissipated, comingled,
or transferred their respective proceeds such that the
government was unable to locate or seize them. Relying on
McHan again, the court determined that § 853(p)
required forfeiture of Chittenden's untainted assets as a
substitute for her co-conspirators' proceeds that the
government could not recover. However, the court found that
the government had failed to prove that $250, 000 of
co-conspirator proceeds and all $231, 000 of Chittenden's
proceeds were in fact out of reach. Accordingly, the court
entered a second order reducing the amount of untainted
assets the government could take from $1, 513, 378.82 to $1,
appealed to this Court, challenging the initial seizure of
her assets, the validity of her conviction, and the
forfeiture orders. See Chittenden, 848 F.3d at 192.
Specifically, she argued that the government's pretrial
seizure of her assets violated her Sixth Amendment right to
counsel, that the government failed to present sufficient
evidence to support her convictions, that the district court
erred in admitting certain hearsay evidence, that the
government constructively amended the indictment, that the
district court lacked jurisdiction to enter the forfeiture
order, and that the district court improperly ordered
forfeiture of her untainted assets based on her
co-conspirators' acts of dissipating the conspiracy
proceeds. Id. at 194-204. We rejected each of these
arguments and affirmed the district court's judgment.
Id. Chittenden petitioned the Supreme Court for
our decision, the Supreme Court decided Honeycutt v.
United States, 137 S.Ct. 1626 (2017). The Court held
that 21 U.S.C. § 853(a)(1)-which mandates forfeiture of
proceeds from certain drug crimes-limits such forfeiture
"to property the defendant himself actually acquired as
the result of the crime." Id. at 1635.
"[T]he statute does not countenance joint and several
liability" for property the defendant's
co-conspirators alone obtained. Id. at 1632-33. The
Court also stated that when tainted property falls outside
the government's reach, § 853(p) does "not
authorize the Government to confiscate substitute property
from other defendants or co-conspirators; it authorize[s] the
Government to confiscate assets only from the defendant who
initially acquired the property and who bears responsibility
for its dissipation." Id. at 1634.
light of this decision, the Supreme Court granted
Chittenden's writ of certiorari, vacated our original
judgment, and remanded the case to us for further
consideration. Chittenden v. United States, 138
S.Ct. 447, 447-48 (2017) (mem.). We requested supplemental
briefing on what impact, if any, Honeycutt ...