Rico - Forfeiture

United States v. Saccoccia, 354 F.3d 9 (1st Cir. 2003)

The government could not seize attorney’s fees that had been paid and spent by the attorneys as substitute assets in this RICO case. The district court concluded that the attorneys did not know the money represented proceeds of money laundering until after the client was convicted. The government argued that the attorneys’ knowing violation of a pre-trial restraint of the defendant’s assets justified entering a judgment against the lawyers. With regard to substitute assets, the First Circuit wrote that the forfeiture statute does not provide an avenue through which the government may reach a third party’s untainted assets as a substitute for tainted assets which the third party had already transferred prior to the date of forfeiture. Back in the District Court, the lower court held the lawyers in contempt (civilly) until they returned the money. 91-115-T (10/25/04). The First Circuit reversed the contempt judgment, however, at 433 F.3d 19 (1st Cir. 2005).

United States v. Gotti, 155 F.3d 144 (2d Cir. 1998)

The RICO statute, 18 U.S.C. §1963(d)(1), does not authorize the pretrial, post-indictment seizure of substitute assets.

United States v. Carson, 52 F.3d 1173 (2d Cir. 1995)

The provision in 18 U.S.C. §1964 (civil RICO) which permits the court to disgorge an enterprise’s assets may not be used to remedy a past act of racketeering. Rather, the provision may only be invoked to prevent future illegal activity.

United States v. Pelullo, 14 F.3d 881 (3rd Cir. 1994)

The standard of proof in a RICO criminal forfeiture proceeding is proof beyond a reasonable doubt. The court distinguished the standard which most courts have applied in the CCE forfeiture context, based on the different Congressional intent in enacting the statutes.

United States v. Ofchinick, 877 F.2d 251 (3rd Cir. 1989)

The evidence did not support the jury’s verdict that the defendant should forfeit $6,000,000 which represented his stock in the corporate defendant.

United States v. Horak, 833 F.2d 1235 (7th Cir. 1987)

The defendant was convicted of RICO, and the issue was what would be forfeited. The defendant, the head of a garbage collection company, was convicted of bribery offenses. The government sought to forfeit his salary, profit sharing and other benefits from his company. The Seventh Circuit rejected the government contention that a defendant acquires or maintains an interest in violation of the racketeering law simply by virtue of the fact that his racketeering activities “enhance” his performance within an enterprise. Instead, a “but for” test is required. The Seventh Circuit also held that it would not review the trial court’s refusal to order forfeiture of the defendant’s stockholding in a parent corporation. The Court held that such an order is not appealable under 18 U.S.C. §3731.

United States v. Riley, 78 F.3d 367 (8th Cir. 1996)

Pursuant to 18 U.S.C. §1963(a), the government may seek forfeiture of a defendant’s interest in an enterprise, or the proceeds of racketeering activity. In this case, the government sought to seize pretrial an insurance company that was described as the enterprise. This was not permissible. The enterprise is not forfeitable, only the defendant’s interest in the enterprise and the proceeds of racketeering activity. Moreover, the statute does not permit seizure of substitute assets.

United States v. Reed, 924 F.2d 1014 (11th Cir. 1991)

Property which was transferred prior to the enactment of the substitute asset provision of RICO (18 U.S.C. §1963(m)) may still be subject to the substitute asset provision. That is, the government may seize substitute assets if the forfeitable property was transferred before the enactment of the substitute asset provision. This does not violate the ex post facto clause.

United States v. Kramer, 912 F.2d 1257 (11th Cir. 1990)

Claimants are entitled to an immediate hearing on their claim to property which has been ordered forfeited by a jury in a criminal trial. Pursuant to 18 U.S.C. §1963(l), the trial judge cannot delay the hearing for an indefinite period of time.