United States v. Guerra Ex Rel. Rodriguez , 216 F. App'x 906 ( 2007 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 06-11078 FEB 7, 2007
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 05-20144-CR-PCH
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ISABEL GUERRA on behalf of her
minor daughter, Vanessa Rodriguez,
JUAN PAULA,
ISABEL SANTOS,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(February 7, 2007)
Before TJOFLAT, HULL and FAY, Circuit Judges.
PER CURIAM:
This is an appeal by Isabel Guerra, on behalf of her minor daughter, Vanessa
Rodriguez; Juan Paula, Guerra’s husband; and Isabel Santos, Guerra’s mother,
from an ancillary forfeiture proceeding in which the district court denied the
appellants’ third-party claims as to various properties subject to criminal forfeiture
as the result of Guerra’s criminal convictions.1 On appeal, the appellants challenge
the court’s order on the grounds that they are innocent owners and bona fide
purchasers for value of the claimed properties.2 For the reasons set forth more
fully below, we affirm.
The properties included in the preliminary order of forfeiture included
Guerra’s right, title and interest in:
(1) A piece of real property located at 192 La Paloma Road, Key Largo,
Florida (“La Paloma property”)
(2) A 2004 GMC Yukon (“Yukon”)
(3) A 2001 Chevrolet 3500 (“Chevrolet”)
1
Guerra’s direct appeal is currently pending before the Court. We previously dismissed
this appeal, in part, for lack of jurisdiction to the extent that Guerra sought to appeal on her own
behalf.
2
For the first time on appeal, the appellants also challenge the forfeiture of their interests
on the grounds that the forfeiture is constitutionally excessive. Because this argument is raised
for the first time on appeal, we do not consider it. Narey v. Dean, 32 F.3d 1521, 1526-27 (11th
Cir. 1994). Before the district court, only the forfeiture of Guerra’s property was challenged as
constitutionally excessive. Guerra, however, is no longer a party to this appeal. To the extent
that the appellants seek to raise an excessive fines claim on Guerra’s behalf, they lack third-party
standing because there is no hindrance to Guerra’s own assertion of this claim in a direct appeal.
See Harris v. Evans, 20 F.3d 1118, 1122 (11th Cir. 1994) (en banc).
2
(4) A 2003 34' Donzi Vessel (“Donzi Vessel”)
(5) A 2002 Suzuki motorcycle (“Suzuki”)
(6) All funds on deposit and interest accrued for Bank of America account
number 3673304237 (“Bank of America account 1”)
(7) All funds on deposit and interest accrued for Bank of America account
number 91000045965339 (“Bank of America account 2”)
(8) All funds on deposit and interest accrued for Interamerican Bank
account number 450009683 (“Interamerican Bank account”)
(9) All funds on deposit and interest accrued for First Union National
Bank account number 9983798061 (“First Union account”)
(10) All funds on deposit and interest accrued for Washington Mutual bank
account number 39300004505691 (“Washington Mutual account”)
all of which the jury found constituted or were derived from proceeds traceable to
the commission of health care fraud.
We review the district court’s findings of fact for clear error, and the court’s
conclusions of law de novo. See United States v. Watkins, 320 F.3d 1279, 1281
(11th Cir. 2003). Guerra was convicted, inter alia, of health care fraud and
conspiracy to commit health care fraud, under 18 U.S.C. §§ 371, 1347. “The court,
in imposing sentence on a person convicted of a Federal health care offense, shall
order the person to forfeit property, real or personal, that constitutes or is derived,
directly or indirectly, from gross proceeds traceable to the commission of the
offense.” 18 U.S.C. § 982(a)(7). Forfeiture proceedings under this provision are
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governed by 21 U.S.C. § 853. 18 U.S.C. § 982(b)(1).
Section 853(n)(6) provides only two ways in which third-party claimants can
establish their interest in forfeited property. United States v. Soreide, 461 F.3d
1351, 1354 (11th Cir. 2006). Under this section,
[i]f, after the hearing [on the third-party claimant’s petition], the court
determines that the petitioner has established by a preponderance of
the evidence that–
(A) the petitioner has a legal right, title, or interest in the property, and
such right, title, or interest renders the order of forfeiture invalid in
whole or in part because the right, title, or interest was vested in the
petitioner rather than the defendant or was superior to any right, title,
or interest of the defendant at the time of the commission of the acts
which gave rise to the forfeiture of the property under this section; or
(B) the petitioner is a bona fide purchaser for value of the right, title,
or interest in the property and was at the time of purchase reasonably
without cause to believe that the property was subject to forfeiture
under this section;
the court shall amend the order of forfeiture in accordance with its
determination.
Id. § 853(n)(6)(A), (B). Although proceedings under § 835(n) arise in the context
of a criminal forfeiture, ancillary forfeiture proceedings are civil proceedings for
the purposes of appellate review. See United States v. Gilbert, 244 F.3d 888, 907
(11th Cir. 2001).3
3
Although Gilbert considers 18 U.S.C. § 1963(l), the RICO forfeiture provision, this
provision is substantially identical to § 853(n) and our analysis of one provision is equally
applicable to the other. See Gilbert, 244 F.3d at 906 n.47, 907.
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As an initial matter, we dispose of claims that are not properly before us.
We do not consider appellants’ challenge to the forfeiture order based on their
arguments that the evidence was insufficient to support Guerra’s convictions, as it
is raised for the first time in their reply brief. Bauknight v. Monroe County, Fla.,
446 F.3d 1327, 1330 n.2 (11th Cir. 2006). We do not consider appellants’ claims
to funds that were in various bank accounts before the beginning of the charged
conspiracy. The only claimant seeking the return of these funds in the district
court was Guerra, who is not a party to this appeal. To the extent that the
appellants now assert a claim against this property (with the exception of Santos’s
asserted interest as an innocent owner or bona fide purchaser in the First Union
account discussed below), we do not consider this claim because it is raised for the
first time on appeal, Narey, 32 F.3d at 1526-27, and it was not properly asserted
under § 835(n) in a timely filed petition before the district court, see 21 U.S.C.
§ 853(n)(2); Soreide, 461 F.3d at 1355 (“We will not vacate the summary
judgment nor provide relief from the final order of forfeiture based upon a claim
that was not asserted as required by the statute.”). Santos also makes a claim to
$200,000 from the sale of two pieces of real property she owned, which was used
to pay off the mortgage on the La Paloma property as well as the excess amount of
money from the sale. The district court denied this claim, inter alia, because it was
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untimely and unverified. As Santos does not challenge this finding on appeal, she
has abandoned the issue. See Rowe v. Schreiber, 139 F.3d 1381, 1382 n.1 (11th
Cir. 1998). Moreover, as Santos raised this claim on December 22, 2005, over
three months after the notice of forfeiture was published in the form of a post-trial
unverified motion for partial adjudication of the La Paloma residence, we will not
grant relief on appeal. See Soreide, 461 F.3d at 1355.
We now turn to the appellants’ arguments that they are innocent owners and
bona fide purchasers of the claimed assets. Unlike the civil forfeiture scheme, 21
U.S.C. § 853 does not contain a provision protecting innocent owners. Soreide, 461
F.3d at 1354; United States v. Jimerson, 5 F.3d 1453, 1455 & n.4 (11th Cir. 1993).
As a result, we have rejected a claim under § 853(n) based on an assertion of
innocent ownership. Jimerson, 5 F.3d at 1455 & n.4. Accordingly, the appellants
cannot prevail on the theory that they are innocent owners.
They fare no better under the bona fide purchaser provision. The bona fide
purchaser provision is only applicable to purchases of the defendant’s interest in
the asset and does not protect purchases from a third-party seller. Soreide, 461
F.3d at 1356. “[T]he term bona fide purchaser . . . is generally understood to mean
[o]ne who has purchased property for value without notice of any defects in the
title of the seller.” Watkins, 320 F.3d at 1283 (citation, emphasis, and quotation
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marks omitted) (omission and second alteration in original). Unsecured or general
creditors are not bona fide purchasers within the meaning of § 853(n)(6)(B). Id.
As to the La Paloma residence, the district court did not clearly err in
determining that Paula did not give consideration for the transfer of Guerra’s
interest in the La Paloma property on September 2, 2003. Although Paula made
improvements to the property, he testified that his work on the La Paloma property
was his contribution to the marriage and he did not expect to be paid. Although the
parties stipulated that Guerra’s interest was quit claimed for one dollar, Guerra
testified that Paula did not pay her any money in return for the conveyance. As to
Paula’s argument that “love and affection” was consideration that supported the
transfer, there is no evidence in the record on appeal that this was incorporated as
part of the consideration for the transfer. In addition, the district court did not
clearly err in finding that Paula was not reasonably without cause to believe that
the property was subject to forfeiture. Guerra transferred her interest in the
property on September 2, 2003, months after both a temporary restraining order
enjoining Guerra from alienating or disposing of any assets obtained as a result of
the health care fraud or acquired by her after January 2000, and a preliminary
injunction consistent with the temporary restraining order went into effect in a civil
suit brought by the government, by which time Paula had attended seven hearings
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on the preliminary injunction, and had appeared before the grand jury to produce
patient files from one of Guerra’s companies.
As to the Chevrolet, Paula’s status, if any, as a bona fide purchaser on the
original date of purchase based on the trade-in of the 1997 BMW is irrelevant to
whether he was a bona fide purchaser under § 853(n)(6)(B). See Soreide, 461 F.3d
at 1356. Based on Guerra’s testimony that Paula paid her nothing in consideration
for transferring the title of the Chevrolet, the district court did not clearly err in
finding that no consideration was given to Guerra in exchange for her transfer of
the title.
As to the Suzuki motorcycle, it is unclear whether the district court credited
Guerra’s testimony, as sufficient to establish by a preponderance of the evidence,
that Paula gave her $8,000 in cash to pay for the motorcycle. If the court did not, it
did not clearly err in doing so, as Guerra could not remember when Paula gave her
the money, Paula did not corroborate this testimony, and a copy of the alleged
deposit slip was not introduced. Even if the court credited Guerra’s testimony, it
did not clearly err in finding that no consideration was given to Guerra in exchange
for her transfer of the title. First, Guerra testified that Paula gave her nothing in
exchange for the transfer of the title. Second, there was no evidence that the
payment of the $8,000 was intended as consideration for legal title.
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As to the Donzi vessel, Guerra testified that Paula did not give her any cash
or consideration in exchange for the Donzi vessel and that it was a gift from her to
Paula. Accordingly, the district court did not clearly err in finding that Paula did
not give consideration for the transfer of Guerra’s interest.
As to the bank accounts, there is no evidence that any of the appellants gave
any consideration for any interest Guerra may have had in the accounts or in the
funds deposited in the accounts. Accordingly, the district court did not clearly err
in finding they cannot prevail under § 853(n)(6)(B).
In light of the foregoing, we hold that an innocent owner defense is not
available to the appellants and that the district court did not clearly err in finding
that they were not bona fide purchasers for value within the meaning of
§ 853(n)(6)(B). Accordingly, the district court’s denial of appellants’ third-party
claims is
AFFIRMED.
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