969 F.3d 1156
11th Cir.2020Background:
- From 2000–2009 Nidal Waked ran a scheme of "mirror-image" transfers among his companies (Vida Panama, Star Textile, Global World) using phony invoices and draws on Vida Panama’s ICBC line of credit; each draw was repaid so the Bank suffered no financial loss but was induced by misrepresentations.
- Waked pled guilty to conspiracy to commit money laundering (18 U.S.C. § 1956(h)) based on misrepresentations to ICBC (and related § 1957 conduct); sentence: 27 months.
- The government sought criminal forfeiture under 18 U.S.C. § 982(a)(1) (initially $20,852,000; alternatively $10,426,000); the district court denied forfeiture because the laundered funds were returned and imposed an alternative, much smaller figure ($520,000) as constitutional ceiling.
- Government appealed, arguing (1) forfeiture under § 982(a)(1) is mandatory and applies to the laundered corpus even if returned to the victim, and (2) the requested forfeiture is not an excessive fine under the Eighth Amendment.
- The Eleventh Circuit reversed the district court’s denial of forfeiture, held money judgments are permissible and the laundered funds are "property involved in" the offense, rejected the district court’s reliance on equitable considerations, and remanded for the district court to determine the forfeiture amount and perform the Eighth Amendment analysis.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 982(a)(1) requires forfeiture when victim suffered no net loss | Forfeiture is mandatory — "shall order" means no discretion | District court may decline where funds were returned and statutory purpose not served | Mandatory; district court erred to rely on equitable considerations; forfeiture required |
| Whether a forfeiture money judgment and the laundered corpus qualify as "property involved in" the offense | Money judgments are permitted; defendant has an in personam interest in the laundered corpus | Money judgments unauthorized; corpus not forfeitable because returned to the Bank or belonged to Vida Panama | Money judgments authorized by Eleventh Circuit precedent; laundered funds are "involved in" the offense; Honeycutt’s taint limitation not controlling here |
| Whether substitute forfeiture under 21 U.S.C. § 853(p) is available and if the Bank can be a "third party" transferee | § 853(p) supports substitute forfeiture when corpus not available; a victim can be a third party transferee | Bank is original owner and therefore not a third party; § 853(p) requirements not satisfied | Majority: § 853(p) framework supports availability of substitute forfeiture and a victim can be a "third party"; (concurring judge: addressing § 853(p) was premature) |
| Whether the requested forfeiture violates the Eighth Amendment (excessive fines) | Forfeiture up to statutory maximum (twice criminally-derived property under §1957) is presumptively constitutional; must weigh three-factor Sperrazza test | Forfeiture would be grossly disproportional given little harm to the Bank; $520,000 is appropriate ceiling | District court erred by focusing solely on the Bank’s net loss; remand for district court factfinding and full Sperrazza analysis; cannot affirm $520,000 ceiling |
Key Cases Cited
- United States v. Monsanto, 491 U.S. 600 (mandatory "shall order" language supports compulsory forfeiture)
- United States v. Seher, 562 F.3d 1344 (11th Cir. 2009) (money laundering forfeiture scope; corpus and related interests forfeitable)
- United States v. Puche, 350 F.3d 1137 (11th Cir. 2003) (approving forfeiture money judgments)
- United States v. Elbeblawy, 899 F.3d 925 (11th Cir. 2018) (in personam money judgments for proceeds upheld)
- Honeycutt v. United States, 137 S. Ct. 1626 (2017) (limits on joint-and-several liability for conspirators under §853(a); does not abolish in personam money judgments)
- United States v. Bajakajian, 524 U.S. 321 (1998) (Eighth Amendment "gross disproportionality" test for forfeiture as fine)
- United States v. Boulware, 384 F.3d 794 (9th Cir. 2004) (repayment to victim does not necessarily offset forfeiture)
- United States v. Sperrazza, 804 F.3d 1113 (11th Cir. 2015) (three-factor framework for Excessive Fines Clause analysis)
- United States v. Joseph, 743 F.3d 1350 (11th Cir. 2014) (distinguishing restitution offsets from forfeiture; no offset of restitution by forfeiture)