United States v. Furando
| Decision Date | 08 July 2022 |
| Docket Number | 20-1526 |
| Parties | United States of America, Plaintiff-Appellee, v. Joseph Furando, Defendant, Appeal of: Christine M. Furando, et al., Claimants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
ARGUED JUNE 3, 2022
Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 13-cr-00189 - Sarah Evans Barker, Judge.
Before SYKES, Chief Judge, and FLAUM and BRENNAN, Circuit Judges.
This case arrives on appeal with an unconventional procedural history for ancillary proceedings connected to a criminal case. After guilty pleas in the underlying fraud case, the district court entered initial orders of forfeiture, third-party claimants petitioned for adjudication of their property interests, and the district court eventually denied that petition nearly three years later-on the same day it granted the government's motion for interlocutory sale of real property at issue. On appeal, the third-party claimants challenge the district court's disposition of both the petition and the government's motion. For the following reasons, we vacate the district court's denial of claimants' § 853(n) petition remand that issue for further proceedings, and affirm the district court's grant of the government's motion for interlocutory sale of real property.
This case stems from a 66-count, multi-defendant criminal indictment charging offenses under 18 U.S.C. §§ 2, 287, 371, 1001, 1343, 1519, 1957, and 42 U.S.C. § 7413. The indictment notified the criminal defendants that the government would seek criminal forfeiture under 18 U.S.C. § 982(a)(1), (a)(2)(A), (b) and 28 U.S.C. § 2461(c) as part of any sentence imposed and (in addition to or in the alternative) would seek civil forfeiture under 18 U.S.C. § 981(a)(1)(A), (a)(1)(C), (a)(1)(D), and 28 U.S.C. § 2461(c). As can be inferred from the indictment, the criminal proceedings were complex. Relevant to this appeal now before us, Joseph Furando and two of his companies, Caravan Trading, LLC and Cima Green, LLC, pleaded guilty to multiple counts in the indictment. Joseph Furando's plea included agreed-upon forfeiture of personal property, assets, and vehicles. He agreed to abandon his rights, title, and interest in personal property, vehicles, motorcycles, funds, and other identified assets. He also agreed to abandon his right, title, and interest to real property at 23 Burning Hollow Road located in Saddle River, New Jersey and to proceeds from sale of commercial real estate at 37 South Kinderkamack Road located in Montvale, New Jersey. Joseph Furando acknowledged in his plea agreement "that all of the property and funds to be forfeited constituted proceeds of the offense to which he [pleaded] guilty and was used or intended to be used in the criminal offense."
Details of his post-indictment conduct aside, Joseph Furando appealed his conviction, arguing that he was entitled to a two-level reduction in his offense level for acceptance of responsibility pursuant to the Sentencing Guidelines. The Seventh Circuit characterized the appeal as "frivolous" and entered an opinion affirming his sentence. See United States v. Furando, 655 Fed.Appx. 507 (7th Cir. 2016). On May 30, 2017, the district court entered preliminary orders of forfeiture against these three criminal defendants. The preliminary forfeiture orders directed the government to give notice to potential third-party interest holders pursuant to 21 U.S.C. § 853(n), which the government did.
On June 30, 2017, Christine Furando (Joseph Furando's wife), Green Grease, LLC, Jungle Habitat Properties, LLC, and Summit Performance Solutions, LLC (hereinafter the "claimants") filed a claim under 21 U.S.C. § 853 to make their claim as innocent owners of property. The motion stated:
The motion outlined Christine Furando's alleged ownership of disputed real property. The motion stated that all rights, title, and interest in the real property located at 23 Burning Hollow Road, Saddle River, New Jersey were transferred to grantees Joseph Furando and Christine M. Furando on June 14, 2011. The motion attached a certified copy of the State of the property deed. The motion also claimed an interest in a 2011 Harley-Davidson, 2011 Ferrari California, 2011 BMW, funds up to $10,000 in the TD Bank Account, funds up to $175,000 in the PNC Bank account (via Green Grease, LLC), funds up to $303,490.06 in the JP Morgan Chase Bank account (via Summit Performance Solutions, LLC which was not an indicted company subject to the district court's forfeiture order), $2,300 in funds seized from Christine Furando's family residence, $839,340.50 in proceeds resulting from a sale of real property located as Kinderkamack Road (via Jungle Habitat Properties, LLC), as well as gifts and artwork.
On October 1, 2018, the district court granted the government's motion for partial final order of forfeiture of property as to Joseph Furando. The residence at Burning Hollow Road, although included in the preliminary order of forfeiture, was not included in this partial final order of forfeiture.
On February 25, 2020, the government filed a motion for interlocutory sale of the real property located at 23 Burning Hollow Drive in Saddle River, New Jersey. In its motion, the United States did not request a Final Order of Forfeiture and did not request any district court ruling on the merits of claimants' § 853(n) petition. The motion sought an order from the district court allowing the United States Marshal's Service to conduct an interlocutory sale of the real property, with the proceeds to be held in escrow pending the entry of a final order of forfeiture.
It was not until nearly three years later, on March 17, 2020, that the district court denied the claimants' petition to adjudicate validity of their interest. In the same order, the district court granted the government's motion for interlocutory sale of the "[t]he real property located at 23 Burning Hollow Road, Saddle River, New Jersey." In granting the government's motion, the district court ruled, "Upon careful review of the requests advanced by the government in each of these referenced motions along with the response and reply briefs, the Court hereby finds that the facts and law are with the Government in each instance, which facts the Court hereby adopts and incorporates by reference." The district court then denied the claimants' § 853(n) petition without further explanation.
On March 31, 2020, the claimants appealed these two entries. On June 12, 2020, this appeal was scheduled for mandatory Rule 33 Mediation.
On July 28, 2021, the government filed a motion to remand, requesting the Court of Appeals vacate the district court's entry denying the claimants' petition to adjudicate the validity of their interest in property and remand this matter to the district court for further proceedings. The government argued that at no point did the government move to dismiss the claimants' petition, move for summary judgment as to the claimants' petition, or otherwise request a ruling on the validity of the claimants' petition-leaving the government without "the opportunity to brief or present a factual record related to the Claimants-Appellants' Petition prior to the district court sua sponte denying it." The government argued that "[b]ecause there is no legal or factual record before this Court related to the Claimants-Appellants' Petition, the United States has determined that it would be in the best interest of judicial economy and efficiency for this Court to vacate the district court's ruling denying the Claimants-Appellants' Petition and remand the matter to [the] district court for further proceedings"-including conducting discovery and presenting relevant arguments and facts before ruling on the petition's merits.
On August 3, 2021, the Court of Appeals set the response briefing deadlines and noted the parties "should provide an update on the status of the interlocutory sale of the property and address whether the challenged order is a final, appealable decision under 28 U.S.C. § 1291."
Through an order, this Court denied the motion to remand. The order stated that,
Claimants challenge the district court's disposal of their 21 U.S.C. § 853(n) petition and grant of the government's motion for interlocutory home sale. We address each issue in turn.
Claimants' first issue on appeal is whether the district court erred in sua sponte denying[1] their joint § 853(n) petition without a hearing or opportunity to amend. We hold this disposition was not appropriate, as any jurisdictional deficiency may have been curable through amendment. Given this conclusion, we remand...
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