United States v. George
886 F.3d 31
1st Cir.2018Background
- John George Jr., a former SRTA advisory-board affiliate, purchased Union Street Bus Company via his alter ego Trans-Ag and obtained a lucrative SRTA contract (renewed in 2006) that included substantial management fees.
- George used political influence and a rigged bidding process (with Joseph Cosentino) to secure and preserve the contract, diverted SRTA-funded employee time and other resources to personal uses, and limited contract oversight.
- He was convicted of conspiracy (18 U.S.C. § 371) and embezzlement from an organization receiving federal funds (18 U.S.C. § 666).
- At sentencing (July 29, 2015) the court reserved forfeiture, then later entered a forfeiture money judgment of $1,382,214 (management fees under the 2006 renewal). That forfeiture was vacated on appeal for lack of jurisdiction and remanded for reconsideration.
- On remand, the district court again ordered forfeiture of $1,382,214; George appealed, arguing procedural errors (denial of allocution and absence when order re-entered) and that the management fees are not forfeitable “proceeds.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendant was entitled to a new opportunity to allocute on remand | Court previously afforded allocution at original sentencing; no new allocution necessary | George: Rule 32 required a new allocution because forfeiture is part of sentence | Held: No new allocution required; defendant had opportunity at initial sentencing and did not materially change circumstances |
| Whether defendant had right to be physically present when forfeiture order re-entered | Government/pursuing court: defendant waived presence by counsel’s prior assent and failure to object | George: Rule 43 requires presence at every material stage including entry of forfeiture | Held: Any Rule 43 right was waived; presence not required for this limited, paper-focused remand |
| Proper legal characterization of forfeitable "proceeds" under 18 U.S.C. § 981(a)(1)(C) | Government: embezzlement and conspiracy are unlawful activities under §981(a)(2)(A); proceeds may include gross/indirect gains of conspiracy | George: Embezzlement should be treated as providing lawful services illegally under §981(a)(2)(B), limiting forfeiture to net proceeds | Held: Embezzlement is an inherently unlawful activity under §981(a)(2)(A); forfeiture may reach gross or indirect proceeds of the conspiracy |
| Whether management fees were traceable to or constituted proceeds of the conspiracy | Government: management fees were part of the ill-gotten gains produced by the conspiracy to obtain and exploit the contract | George: management fees were not proceeds of the charged conspiracy | Held: District court did not clearly err; management fees were at least indirectly proceeds of the conspiracy and forfeitable by preponderance standard |
Key Cases Cited
- United States v. George, 841 F.3d 55 (1st Cir. 2016) (prior opinion affirming conviction and vacating earlier forfeiture for lack of jurisdiction)
- United States v. Bryant, 643 F.3d 28 (1st Cir. 2011) (remand proceedings rights depend on scope of remand)
- United States v. DiPina, 230 F.3d 477 (1st Cir. 2000) (no second allocution required when reimposed sentence is identical)
- Gagnon v. United States, 470 U.S. 522 (1985) (defendant must timely assert Rule 43 rights; failure can waive presence)
- United States v. Bodouva, 853 F.3d 76 (2d Cir. 2017) (embezzlement is inherently unlawful and falls under §981(a)(2)(A))
- United States v. Capoccia, 503 F.3d 103 (2d Cir. 2007) (forfeiture of conspiracy proceeds may encompass the enterprise’s broader ill-gotten gains)
- Honeycutt v. United States, 137 S. Ct. 1626 (2017) (coconspirators cannot be held jointly and severally liable for proceeds one another obtained)
- Kaley v. United States, 134 S. Ct. 1090 (2014) (forfeiture’s purposes: punishment, deterrence, and diminishing economic power of criminal enterprises)