United States v. Peterson
2011 U.S. Dist. LEXIS 126028
S.D.N.Y.2011Background
- Peterson pled guilty to wire fraud and insurance fraud on July 19, 2005; a sentencing stipulation followed, agreeing to forfeit two properties.
- The San Francisco Property and Grand Cayman Property were identified as forfeitable under 18 U.S.C. § 982(a)(2)(A) and 21 U.S.C. § 853, with a final forfeiture order issued March 13, 2007.
- Crew, Peterson’s long-term domestic partner, filed timely petitions asserting interests in both properties under 21 U.S.C. § 853(n).
- An October 2010 hearing determined Crew had a California community property interest in the San Francisco Property but not in the Grand Cayman Property.
- The court found that fraudulent transfers and a below-value transfer of the San Francisco Property to Crew rendered those transfers void as fraudulent/conveyances.
- The court concluded that Crew’s Marvin claim attached to the San Francisco Property, but not to the Grand Cayman Property, and adjusted the forfeiture accordingly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of transfers to Crew | Crew's title superior by valid transfers (or bona fide purchase). | Transfers were fraudulent/constructively fraudulent to defeat forfeiture. | Transfers void as fraudulent/conveyances; forfeiture stands subject to adjustments. |
| Timing of government interest in substitute property | Vesting may occur at conviction or later consent. | Timing is unclear; vesting should favor not pre-conviction dissipation. | Government interest in substitute assets vestes upon grand jury indictment. |
| Marvin claim applicability to San Francisco Property | Long-term partnership with Peterson creates a future contract for property. | No community property interest in the San Francisco Property under Marvin. | Crew has a valid Marvin claim in the San Francisco Property; community property interest recognized. |
| Marvin claim applicability to Grand Cayman Property | Implied contract could extend to Grand Cayman Property. | No intent to share Grand Cayman Property; no Marvin interest. | No Marvin interest in Grand Cayman Property. |
| Domestic partnership registration effect on forfeiture | Registration could create superior interest over government. | Registration after indictment does not vest a legal interest against forfeiture. | Registration premised on genuine affection; does not prevent forfeiture; vesting occurs at indictment. |
Key Cases Cited
- Libretti v. United States, 516 U.S. 29 (U.S. 1995) (forfeiture is a sentence issue, not an element of the crime)
- United States v. Schwimmer, 968 F.2d 1570 (2d Cir. 1992) (forfeiture principles and third-party interests)
- Pacheco v. Serendensky, 393 F.3d 348 (2d Cir. 2004) (partial forfeiture and substitute property concepts)
- United States v. Hooper, 229 F.3d 818 (9th Cir. 2000) (state law governs property interests; federal law governs forfeiture)
- Marvin v. Marvin, 18 Cal.3d 660 (Cal. 1976) (Marvin claims for unmarried couples; implied contract and consideration required)
- Gotti, 155 F.3d 144 (2d Cir. 1998) (pre-trial restraint and forfeiture timing considerations in RICO context)
- Parrett v. United States, 530 F.3d 422 (6th Cir. 2008) (vesting of government interests in offense vs. substitute property)