United States District Court, D. Nebraska
MEMORANDUM AND ORDER
Richard G. Kopf Senior United States District Judge.
are two matters pending before me that are intertwined and
mind-numbingly complex, yet require rapid resolution so that
sentencing may proceed. I am reminded of William
Shakespeare's advice. In his play, Hamlet, in
the second act, Polonius (speaking for the Bard of Avon)
asserts, “Since brevity is the soul of wit/And
tediousness the limbs and outward flourishes, I will be brief
. . . .”
This Fight About?
set forth in 14 counts and over 30 pages in the
indictment, this case boiled down to the alleged illegal sale
of “potpourri” (sometimes called
“K-2”) and drug paraphernalia by a local
“head shop” that generated a lot of money. After
a long, and very well fought jury trial, a wise and
discriminating jury found the defendants guilty of some
counts but not guilty on other counts. In particular, the
jury found that all of the defendants except AEP were guilty
of Count 8, conspiracy to distribute drug paraphernalia, and
Count 11, conspiracy to commit mail fraud by, among other
things, acquiring for resale misbranded drugs (the
“potpourri”). The jury found that all defendants
were guilty of Count 12, conspiracy to structure currency
transactions that followed the acquisition of the drug
paraphernalia and potpourri.
government sought forfeiture of specific property. It set
forth the statutory authorization for forfeiture at pages 29
and 30, paragraphs 1-3, in the indictment. I will not repeat
or discuss those statutes because the defendants have not
asserted that the government lacks a statutory basis for
parties demanded (or at least agreed) that the jury also
determine whether the sought-after specific property should
be forfeited. The jury agreed that packets of potpourri and
related drug paraphernalia together with one bank account
should be forfeited. The jury was unable to reach a unanimous
agreement on some other specific items and found other
specific items should not be forfeited. The items the jury
did not forfeit or about which they could not reach agreement
are the most valuable items of specific property.
government also sought a money judgment as part of the
forfeiture allegations for Count 8 and Count 11 and and Count
But that matter, quite properly and as I will discuss later,
was not submitted to the jury.
government now asks me to enter a money judgment at the time
of sentencing against the defendants. At the same time, the
defendants seek a return of the property that the jury did
not forfeit. The parties were heard, and evidence was
received on April 24, 2017.
term “money judgment” is “a short-hand way
of describing the defendant's continuing obligation to
forfeit the money derived from or used to commit his
criminal offense whether he has retained the actual
dollars in his possession or not.” Stefan D.
Cassella, Asset Forfeiture Law in the United States -
Second Edition, at 579 (2013) (italics added) (hereafter
“Cassella”).Indeed, “[t]he use of
money judgments in criminal forfeiture cases is now
well-established in the case law.” Id. at 580.
specifically, Federal Rule of Criminal Procedure
32.2 explicitly contemplates that the government may
seek a money judgment. For example, see Rule 32.2(a), Rule
32.2(b)(1)(A), and Rule 32.2(b)(2)(A). If the government
seeks a personal money judgment, “the court
must determine the amount of money that the defendant will be
ordered to pay.” Rule 32.2(b)(1)(A) (italics added).
The right to a jury determination is limited to “the
forfeitability of specific property.” Rule
32.2(b)(5)(A) (italics added).
greater weight of the evidence, I preliminarily decide that
the government is entitled to a money judgment against all
four defendants jointly and severally. I find by the greater
weight of the evidence this judgment should be in the sum of
$1, 142, 942.32. (See Hearing Exs. 68, 68A, 69, 69A
(Apr. 24, 2017).) This represents the wholesale costs of
acquiring the drug paraphernalia and potpourri, the sale of
which generated the structuring conviction.
intentionally concentrated on activities that go to the core
of the illegal activity and that facilitated
everything that followed. Particularly to avoid double
counting, I did not, at least directly, rely heavily on a
approach is consistent with the law:
Money judgments . . . are not limited to property
forfeited under a “proceeds” theory, if a sum of
money was used to facilitate an offense, it may be forfeited
in the form of a money judgment. See United States v.
Puche, 350 F.3d 1137, 1153-54 (11th Cir.
2003) (affirming money judgment equal to the combined value
of the commission paid to the money launderer and the
untainted money used to facilitate the offense); United
States v. Numisgroup International Corp., 169 F.Supp.2d
133, 136 (E.D.N.Y. 2001) (money judgment entered under §
982(a)(8) may be based on the value of the gross proceeds
derived from the offense and the value of the property used
to facilitate or promote it); United States v.
Harrison, 2001 WL 803695, at *1-2 (N.D. Ill. 2001)
(Government entitled to money judgment for the amount of
money defendant used to facilitate his drug offense - i.e.,
the amount he used to purchase drugs.)
Cassella, at 588 & n.63 (italics added).
turn to the arguments of the parties. The government seeks
$2, 248, 728.56.
if I granted the government's request, I fear that I
would be double counting should I include those sums.
Besides, by concentrating on the wholesale costs of the
acquisition of the drug paraphernalia and the misbranded
drugs, I have gotten to the core of the illegal activity. In
this regard, I must not go overboard and thereby violate the
Constitution. See United States v. Bajakajian, 524
U.S. 321, 334 (1998) (“We now hold that a punitive
forfeiture violates the Excessive Fines Clause if it is
grossly disproportional to the gravity of a defendant's
offense.”) By concentrating on wholesale costs, the
money judgment is proportional to the gravity of
defendants' offenses since that is the amount of money