872 F.3d 78
2d Cir.2017Background
- David H. Brooks, founder/CEO of DHB Industries, was tried and convicted by a jury (non-tax counts) and later pled guilty to tax offenses; he was sentenced to prison, fine, forfeiture, special assessment, and restitution.
- Pretrial, the court imposed a two-tier $400 million bond with $48 million cash security and strict asset‑disclosure/overseas‑asset conditions; violation could trigger forfeiture of the cash security.
- The Government proffered extensive investigative evidence that Brooks (and family members) concealed assets abroad ("Czerny Kot" scheme); the district court revoked bail and forfeited approximately $22.5 million in cash security to the Government.
- Brooks appealed his jury convictions (but not his tax guilty pleas) and the forfeiture; his family moved to set aside the forfeiture under Fed. R. Crim. P. 46(f); the district court denied that motion.
- While appeals were pending, Brooks died in custody. His estate moved to abate convictions, restitution, fines, forfeitures, and special assessment; family renewed motion for return of forfeited bond security.
- The Second Circuit: (1) abated the jury‑trial convictions and related forfeiture/fine/special assessment and restitution tied to those vacated convictions; (2) declined to abate tax convictions (entered by guilty plea) or the bail bond forfeiture; affirmed denial of Rule 46 motion to return security; remanded to dismiss specified counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a defendant's convictions abate upon death during direct appeal | Brooks: death abates convictions pending on direct appeal (abatement ab initio) | Government: some convictions (e.g., final plea convictions) should survive | Held: Abatement applies only to convictions still on direct appeal; Brooks's jury convictions abate, guilty‑plea tax convictions (not appealed) do not. |
| Whether restitution tied to abated convictions survives defendant's death | Brooks: restitution tied to abated convictions must abate | Government: restitution may persist because funds were available or because restitution is compensatory | Held: Restitution imposed pursuant to MVRA tied to vacated convictions abates; restitution for tax plea counts (final) survives. |
| Whether guilty‑plea convictions and their sanctions abate after death on unrelated appeals | Brooks: estate sought abatement generally | Government: plea convictions final and waived appeal, so not subject to abatement | Held: Plea convictions and their restitution/fines do not abate because they were final and unappealed. |
| Whether forfeiture of bail bond cash security abates with defendant's death or must be returned under Rule 46(f) | Family/estate: forfeiture should abate with the prosecution or be set aside because of abatement/nullity of indictment | Government: bond forfeiture is civil/contractual collateral remedy not abated by death; Rule 46 factors support denial | Held: Forfeiture does not abate with death; district court did not abuse discretion denying Rule 46 motion to return security. |
Key Cases Cited
- United States v. Libous, 858 F.3d 64 (2d Cir. 2017) (explaining abatement ab initio when a defendant dies during direct appeal)
- United States v. Wright, 160 F.3d 905 (2d Cir. 1998) (abatement doctrine and its limits)
- Nelson v. Colorado, 137 S. Ct. 1249 (U.S. 2017) (vacated convictions require refund of fees, costs, and restitution taken by reason of the conviction)
- United States v. Volpendesto, 755 F.3d 448 (7th Cir. 2014) (discussing whether restitution abates with abatement of conviction)
- United States v. Zangari, 677 F.3d 86 (2d Cir. 2012) (restitution is statutory and not an inherent sentencing power)
- United States v. Gambino, 17 F.3d 572 (2d Cir. 1994) (factors to consider in Rule 46 remission of forfeited bail security)
- Kokesh v. S.E.C., 137 S. Ct. 1635 (U.S. 2017) (disgorgement characterized as a penalty for statute‑of‑limitations purposes)