United States v. Torres
703 F.3d 194
2d Cir.2012Background
- Torres was convicted of theft of government property under 18 U.S.C. § 641 and made restitution to NYCHA for $11,724.
- The district court ordered Torres to forfeit $11,724 to the United States, arguing the funds were proceeds traceable to her offense.
- Subsidies Torres fraudulently obtained reduced her rent; HUD paid those subsidies to NYCHA, the landlord.
- Torres argued she did not obtain funds herself, only enjoyed the intangible benefit of subsidized housing, so § 981 forfeiture did not apply.
- The district court held the $11,724 was obtained indirectly as a result of the offense, traceable to the offense, and a net gain, warranting forfeiture.
- The court also imposed concurrent restitution and forfeiture, noting different statutes and payees and purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 981(a)(2)(A) reach indirectly obtained proceeds? | Torres: only intangible benefit, not proceeds. | Government: proceeds include indirect obtainment and traceable gains. | Yes; proceeds obtained indirectly are forfeitable. |
| Are restitution and forfeiture compatible when awarded to different payees? | Torres: may double-recover and over-penalize. | Government: different statutes, purposes, and payees allow concurrent relief. | Concurrent restitution and forfeiture proper. |
| Does Contorinis limit forfeiture where funds are paid to a third party? | Torres: third-party payment defeats dominion/control, so no forfeiture. | Torres: distinguish Contorinis; here, funds were obtained indirectly by Torres. | Contorinis distinguished; forfeiture authorized here. |
| Is the forfeiture statute interpreted broadly enough to cover net gains from fraud? | Torres: narrow reading would exclude net gain. | Government: text supports broad reach to deter fraud and disgorge gains. | Yes; statute supports forfeiture of net gain. |
| Was forfeiture properly tied to the specific property offset by the gain from the offense? | Torres: funds were not in her possession; not traceable to her gain. | Gain was in Torres's control (net savings) and traceable to the offense. | Forfeiture properly tied to the specific $11,724. |
Key Cases Cited
- United States v. Kalish, 626 F.3d 165 (2d Cir. 2011) (cash forfeiture and broad reach of § 981(a)(1)(C))
- United States v. Uddin, 551 F.3d 176 (2d Cir. 2009) (forfeiture of cash diverted from benefits programs)
- United States v. Contorinis, 692 F.3d 136 (2d Cir. 2012) (distinguishes third-party custody vs. dominion over proceeds)
- United States v. Genova, 333 F.3d 750 (7th Cir. 2003) (restitution vs. forfeiture; gain-based vs. loss-based distinction)
- United States v. Taylor, 582 F.3d 558 (5th Cir. 2009) (dual recovery and windfall considerations; disaster fraud context)
- United States v. Emerson, 128 F.3d 557 (7th Cir. 1997) (concurrent restitution and forfeiture upheld in some circuits)
- United States v. Pescatore, 637 F.3d 128 (2d Cir. 2011) (restoration and forfeiture serve different purposes)
- United States v. McGinty, 610 F.3d 1242 (10th Cir. 2010) (double recovery considerations; statutory alignment)