Tuesday, April 1st, 2014

Forfeiture Is Limited to That Authorized by the Statute Listed in the Charged Count

United States v. Annabi, Nos. 12-4988-cr(L), 12-4990-cr(Con) (2d Cir. Mar. 25, 2014), available here

This published decision holds that where the government fails to invoke an applicable forfeiture provision in the indictment, and fails to correct that error prior to entry of a final judgment, forfeiture must be limited to that authorized by the statute cited as the basis for forfeiture, and of which the defendant had notice.

The facts: A jury convicted Annabi of, among other counts, three counts of mortgage fraud (Counts Seven, Eight, and Nine). The government sought, and the district court ordered, forfeiture of the gross proceeds of the fraudulently obtained loans described in these three counts.

The Indictment sought, on all three counts, forfeiture to the United States, citing the civil forfeiture provision (18 U.S.C. 981(a)(1)(C)), and 28 U.S.C. 2461(c). On  Counts Eight and Nine only, the Indictment also sought forfeiture under the criminal forfeiture provision (18 U.S.C. 982(a)(2)(A)). But Count Seven cited the civil forfeiture provision only. The civil and criminal forfeiture provisions, moreover, are different in at least one crucial respect: the criminal provision requires forfeiture of the entire amount of a fraudulent loan (even if it was already repaid), whereas the civil provision requires a deduction from forfeiture of any portion of the fraudulent loan that was repaid at no loss to the victim.

The decision: The Circuit held that, because the government failed to mention the criminal forfeiture provision in Count Seven, and did not correct this oversight prior to or during sentencing, the district court erred by ordering the defendant to forfeit the gross fraudulent proceeds for Count Seven. Since Count Seven cited only the civil forfeiture provision, the district court should have reduced the forfeiture on Count Seven by the amount of the fraudulent loan that was repaid with no loss to victim.

Posted by
Categories: Uncategorized
Comments are closed.