United States v. Cohan, 988 F. Supp. 2d 323

Background

Defendant Barry Cohan pleaded guilty to health-care fraud and aggravated identity theft; plea agreement imposed a $600,000 forfeiture and contemplated restitution to be determined.
At sentencing, government counsel indicated an understanding that forfeited funds might go to the Port Authority, but made no definitive promise; plea agreement contained a merger clause superseding prior promises.
The government executed forfeiture and recovered $222,054.26 (plus an apartment); later garnishments identified roughly $627,499.74 in additional accounts (Stifel and FNIC).
Cohan paid only $675 toward a $607,186 restitution judgment and objected to further garnishment, claiming the government had promised to apply forfeited funds to restitution (estoppel theory).
The government denied any such promise, invoked the plea merger clause, and cited DOJ policy limiting transfers of forfeited funds to victims when the defendant can satisfy restitution independently.
The Court held an evidentiary hearing, found the assumed understanding premised on Cohan’s alleged impecuniosity, and concluded Cohan had sufficient assets to satisfy restitution separately from forfeiture.

Issues

Issue	Cohan's Argument	Government's Argument	Held
Whether the government is estopped from enforcing restitution because it promised forfeited funds would satisfy restitution	Government promised forfeited funds would be applied to restitution; Cohan relied on that understanding	No promise was made; plea merger clause bars extrinsic agreements; DOJ policy limits such transfers	Rejected — no binding promise; merger clause and evidence show any statements were contingent on Cohan being impecunious
Whether the plea agreement’s merger clause permits extrinsic evidence of an alleged promise	Merger clause should not bar consideration of government representations made during plea discussions	Merger clause bars extrinsic evidence and reflects entire bargain	Merger clause bars Cohan’s claimed extrinsic agreement; court enforces written plea terms
Whether forfeiture and restitution can be imposed concurrently and how they interact	Concurrent imposition acceptable but forfeited funds should satisfy victim restitution first	Forfeiture and restitution serve different purposes; forfeited assets become U.S. property; DOJ discretion governs transfers	Forfeiture and restitution may co-exist, but restitution must be satisfied separately when defendant has assets; forfeited assets already transferred to government need not be reallocated
Priority between restitution and forfeiture for assets not yet forfeited or seized	Victim restitution should have priority over government’s collection of forfeiture	Government has discretion; statutes don’t expressly prioritize forfeiture over restitution	Court orders priority for unseized garnished funds: those funds must be applied to restitution first before further execution of the forfeiture order

Key Cases Cited

United States v. Torres, 703 F.3d 194 (2d Cir. 2012) (forfeiture and restitution may both be imposed)
United States v. Contorinis, 692 F.3d 136 (2d Cir. 2012) (forfeiture disgorges ill-gotten gains)
United States v. Boccagna, 450 F.3d 107 (2d Cir. 2006) (restitution is compensatory to restore victims)
United States v. Kalish, 626 F.3d 165 (2d Cir. 2010) (payments of restitution may bear on remaining forfeiture)
United States v. Pescatore, 637 F.3d 128 (2d Cir. 2011) (DOJ has discretion on transferring forfeited assets to victims)
United States v. Emerson, 128 F.3d 557 (7th Cir. 1997) (rejected argument that restitution payments necessarily reduce forfeiture)
United States v. Witham, 648 F.3d 40 (1st Cir. 2011) (FDCPA applies to enforcement of restitution via garnishment)
United States v. Phillips, 303 F.3d 548 (5th Cir. 2002) (garnishment available to enforce restitution)
United States v. Cimino, 381 F.3d 124 (2d Cir. 2004) (plea agreements governed by contract principles; ambiguities construed against government)
Jarecki v. Shung Moo Louie, 95 N.Y.2d 665 (N.Y. 2001) (merger clause bars extrinsic evidence altering written agreement)