United States v. Kalish
2010 U.S. App. LEXIS 24151
| 2d Cir. | 2010Background
- Defendant Kalish convicted of mail and wire fraud for a scheme to take upfront fees for commercial loans via The Funding Solutions, Inc. (TFS).
- TFS collected millions in advance fees; fees were allegedly refundable only if a loan commitment was obtained, otherwise nonrefundable upon procurement of a loan proposal.
- District Court imposed a 7-year sentence, restitution of $1,199,239, and an initial forfeiture money judgment of $8.4 million.
- Court ultimately reduced forfeiture to $3,950,080 after subtracting commissions paid to TFS employees (excluding commissions on loans obtained).
- Final order forfeited Kalish’s interests in three identified items: Lehman Brothers account, a 2003 Mercedes, and a 2004 Land Rover.
- Proceedings addressed whether a money judgment could be entered, whether forfeiture amount could include all victim fees, and the relationship between forfeiture and restitution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a money judgment may be entered for forfeiture | Kalish argues no in personam money judgment authority | Government seeks in personam judgment under 28 U.S.C. § 2461(c) via § 853 | Yes, district court had authority to enter money judgment |
| Whether the forfeiture amount properly includes fees from all victims | Kalish claims only some customers' fees are tied to fraud | Government shows funds from all up-front fees traceable to fraud | Included fees from all victims; supported by evidence of false promises |
| Whether pre-August 23, 2000 fees violate Ex Post Facto | Pre-2000 conduct should not be punished under new statute | Continued conduct after enactment allows application | No Ex Post Facto violation; conduct continued after enactment |
| Whether forfeiture should be offset against restitution | Forgo offset; seek credit against restitution | Offsets are not required; separate remedies may coexist | No offset required; remedies may coexist; potential future offset not decided here |
| Whether the relationship between forfeiture and restitution affects final amount | Forfeiture should reduce restitution or vice versa | No automatic cross-credit; not determined here | Separate remedies affirmed; potential future credit not addressed here |
Key Cases Cited
- United States v. Fruchter, 411 F.3d 377 (2d Cir. 2005) (proceeds traceable to fraud; preponderance standard for forfeiture amount)
- United States v. Sabhnani, 599 F.3d 215 (2d Cir. 2010) (preponderance standard; traceability analysis)
- United States v. Awad, 598 F.3d 76 (2d Cir. 2010) (authority to enter in personam money judgment under § 853 via § 2461(c))
- United States v. Emerson, 128 F.3d 557 (7th Cir. 1997) (separate forfeiture and restitution not barred by constitution)
- United States v. Various Computers & Computer Equipment, 82 F.3d 582 (3d Cir. 1996) (restitution and forfeiture not multiple punishments under Double Jeopardy)
- United States v. Vampire Nation, 451 F.3d 189 (3d Cir. 2006) (supports in personam forfeiture under § 853 via § 2461(c))