U.S. v. Casey

Decision Date10 April 2006
Docket NumberNo. 04-30525.,No. 05-30016.,04-30525.,05-30016.
Citation444 F.3d 1071
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Michael David CASEY, Defendant-Appellant. United States of America, Plaintiff-Appellant, v. Michael David Casey, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Nancy Bergeson, Assistant Federal Public Defender, Portland, OR, argued the cause for the petitioner and was on the briefs.

Jennifer J. Martin, Assistant United States Attorney, Portland, OR, argued the cause for the respondent; Karin J. Immergut, United States Attorney, Portland, OR, was on the briefs.

Appeal from the United States District Court for the District of Oregon; Anna J. Brown, District Judge, Presiding. D.C. No. CR-03-00049-AJB.

Before BROWNING, D.W. NELSON, and O'SCANNLAIN, Circuit Judges.

O'SCANNLAIN, Circuit Judge.

We must decide whether the United States is entitled to a money judgment forfeiture order against a criminal defendant who was convicted of a drug crime but had no assets at the time of sentencing.


In late 2001, two men agreed to purchase 1,000 tablets of 3,4-methylenedioxy-methamphetamine (MDMA), a controlled substance commonly referred to as "ecstasy," from Michael Casey. 21 C.F.R. § 1308.11(d)(11) (2005). The buyers wired $7,000 directly into Casey's bank account, and he in turn sent the illicit drugs across state lines from California to Oregon in two separate shipments — the first on January 4, 2002, and the second on January 8, 2002.

Authorities arrested the buyers shortly after they received the second shipment, and they agreed to cooperate with federal prosecutors and to testify against Casey. Following an investigation, Casey was indicted on two counts of distribution of ecstasy, in violation of 21 U.S.C. § 841(a)(1) & (b)(1)(C), and a forfeiture count covering the $7,000 proceeds of the drug transaction.

At his April 7, 2004, hearing, Casey pleaded guilty to the distribution counts. Before he could be sentenced, however, the Supreme Court handed down its decision in Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004). Following Blakely, Casey argued that he could not be sentenced based on 1,000 tablets of ecstasy because he had not explicitly admitted drug quantity at his plea hearing. After the United States Probation Office filed its presentence report which agreed with Casey's interpretation, the government requested that the district court empanel a sentencing jury while preserving its contention that Casey's statements at his plea hearing qualified as admissions under Blakely.

The district court rejected the government's request for a sentencing jury but, at the sentencing hearing, found that Casey had accepted responsibility for a specific quantity of ecstasy during his plea colloquy and thereupon sentenced him to two 70-month terms as provided by the Sentencing Guidelines, to be served concurrently. The court declined to impose a forfeiture money judgment, explaining that it was not within her authority because Casey had no assets to forfeit.

Casey filed this timely appeal challenging his 70-month concurrent sentences. The government filed a timely cross appeal of the district court's refusal to impose a forfeiture money judgment.

At oral argument, the government conceded that Casey is entitled to a full remand for resentencing under United States v. Dare, 425 F.3d 634 (9th Cir. 2005).1


The only remaining issue is whether the district court erred by refusing to impose a money judgment for forfeiture of the proceeds of the ecstasy sale. A person convicted of a violation of the Controlled Substances Act, 21 U.S.C. § 801 et seq., punishable by more than one year imprisonment is subject to the forfeiture provisions of 21 U.S.C. § 853. Section 853 provides that the district court "shall order" forfeiture of "any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of such violation." § 853(a). If the actual proceeds are unavailable, "the court shall order the forfeiture of any other property of the defendant." § 853(p).

Casey claims that he was only a middleman in the transaction; he transferred the money he received to a third party who actually shipped the drugs. Even though he no longer has the drug proceeds, § 853(p) clearly requires that Casey forfeit substitute assets in their stead, but his only asset appears to be a stock account worth approximately $150. The government argues that the court should have imposed a money judgment that could be satisfied out of any future assets Casey acquires. Casey counters that the statute does not authorize money judgments but is limited only to forfeiture orders of existing assets. We review the district court's interpretation of federal forfeiture law de novo. United States v. Kim, 94 F.3d 1247, 1249 (9th Cir.1996).


"Property subject to criminal forfeiture under [§ 853] includes — (1) real property. . . and (2) tangible and intangible personal property, including rights, privileges, interests, claims and securities." § 853(b). The definition of property is not limited to the defendant's current assets, but neither does it explicitly authorize money judgments, which could be satisfied out of the defendant's future assets.

It is significant that "[t]he provisions of [§ 853] shall be liberally construed to effectuate its remedial purposes." § 853(o). "The text of the relevant statutory provisions makes clear that Congress conceived of forfeiture as punishment for the commission of various drug . . . crimes." Libretti v. United States, 516 U.S. 29, 39, 116 S.Ct. 356, 133 L.Ed.2d 271 (1995); see also United States v. Nava, 404 F.3d 1119, 1124 (9th Cir.2005) (characterizing forfeiture as "part of the penalty for the defendant's conviction"); United States v. Lester, 85 F.3d 1409, 1413 (9th Cir.1996) ("[a] criminal forfeiture is an in personam judgment against a person convicted of a crime." (citation and internal quotation marks omitted)). "We must respect this congressional purpose if the statutory language will support such a construction." United States v. Littlefield, 821 F.2d 1365, 1367 (9th Cir.1987).

It is also clear that Congress intended criminal forfeiture provisions to eliminate profit from certain criminal activities, including money laundering, racketeering and drug trafficking. See United States v. Ginsburg, 773 F.2d 798, 802 (7th Cir.1985) (en banc) (interpreting the Racketeer Influenced and Corrupt Organizations (RICO) statute's forfeiture provision, which is similar to § 853). In an oft-quoted passage, the Seventh Circuit, rejecting a defendant's argument that spent profits could not be forfeited, emphasized that a racketeer who dissipates the profits or proceeds of his racketeering activity on wine, women, and song has profited from . . . crime to the same extent as if he had put the money in his bank account. Every dollar that the racketeer derives from illicit activities and then spends on such items as food, entertainment, college tuition, and charity, is a dollar that should not have been available for him to spend for those purposes.

Id. The court held that the statute required forfeiture of the total proceeds, regardless of whether those funds were still in his possession.2 Id. at 803.

Although Ginsburg predates Congress's addition of § 853(p) specifically authorizing forfeiture of substitute assets, its reasoning is no less compelling. In the present case, Casey received funds that should never have been available for him to spend. Imposing a money judgment despite his lack of assets at sentencing negates any benefit he may have received from the money, ensuring that, in the end, he does not profit from his criminal activity.

Requiring imposition of a money judgment on a defendant who currently possesses no assets furthers the remedial purposes of the forfeiture statute by ensuring that all eligible criminal defendants receive the mandatory forfeiture sanction Congress intended and disgorge their illgotten gains, even those already spent. Casey's argument frustrates the broad remedial purpose of the statute.

The two sister-Circuit decisions which have considered the issue hold that a money judgment is warranted in a criminal forfeiture case even against a defendant who has no assets with which to satisfy it.

The First Circuit decided that "the government is entitled to an in personam judgment against the defendant for the amount of money the defendant obtained as proceeds of the offense." United States v. Candelaria-Silva, 166 F.3d 19, 42 (1st Cir.1999). In its view,

A money judgment permits the government to collect on the forfeiture order in the same way that a successful plaintiff collects a money judgment from a civil defendant. Thus, even if a defendant does not have sufficient funds to cover the forfeiture at the time of the conviction, the government may seize future assets to satisfy the order.

United States v. Hall, 434 F.3d 42, 59 (1st Cir.2006) (emphasis added). Hall upheld entry of the money judgment, basing its decision on the punitive nature of forfeiture. Id. The court reasoned that "permitting a money judgment, as part of a forfeiture order, prevents a drug dealer from ridding himself of his ill-gotten gains to avoid the forfeiture sanction." Id.

The Seventh Circuit has also addressed the propriety of an in personam money judgment where the defendant has insufficient assets to satisfy it. United States v. Baker, 227 F.3d 955, 970 (7th Cir.2000). The defendant in Baker had some assets that, once recovered by the government, would be "far short of the forfeiture award." Id. Although the defendant did not object to the money judgment, the court declared it "proper," explaining that "[i]n effect this places a judgment lien against [the defendant] for the balance of his prison term and beyond." Id.3


Casey disagrees, arguing that the First and...

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