Categories & Search

Circuit Reverses Over-Expansive Forfeiture Order

On July 7, 2017, the Second Circuit (Jacobs, Leval, Raggi) issued a short summary order in United States v. Stegemann.  Most of the order is dedicated to affirming the defendant’s conviction at trial on several drug and firearm-related offenses, but at the end the Court reverses the order of forfeiture imposed as part of the defendant’s sentence, in part with the government’s consent. 

The district court ordered the forfeiture of $456,000 in cash found on the defendant’s property and in his sister’s safe.  It also ordered the forfeiture of $20,494 from the defendant’s bank accounts as substitute assets to satisfy a money judgment obtained by the government in the amount of $93,545, an amount equivalent to the value of the narcotics found during a search of the defendant’s property.  First, with the government’s agreement, the Second Circuit reversed the forfeiture of the $456,000 in cash because it was not connected to the offenses of conviction.  Second, the Court vacated the money judgment and remanded the matter for further consideration the forfeiture of the $20,494.  The Court expressed uncertainty about why the government was allowed to obtain a money judgment based on the quantity of the drugs when he was convicted of possession of drugs with intent to distribute and he received no drug proceeds.  The Court sent the case back to the district court to ask for “a clearer understanding” of what the $20,494 was “meant to substitute for.”

This short summary order is a useful reminder that not everything that is found by the government during the execution of a search warrant is forfeitable.  Sometimes the property is unrelated to the crime, sometimes it belongs to a completely innocent third person, and in both cases it should not be forfeited.  It is incumbent on defense attorneys and the courts to scrutinize forfeiture orders and to ask whether the particular order on appeal stayed within the statutory lines drawn by Congress or—as here—crosses those lines.