United States v. Russell Davis Bailey , 630 F. App'x 902 ( 2015 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 14-14871
Non-Argument Calendar
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D.C. Docket No. 2:13-cr-00179-KOB-JEO-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
RUSSELL DAVIS BAILEY,
Defendant-Appellant.
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Appeal from the United States District Court
for the Northern District of Alabama
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(October 27, 2015)
Before JORDAN, JULIE CARNES, and FAY, Circuit Judges.
PER CURIAM:
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Russell Davis Bailey appeals his final order of forfeiture. After Mr. Bailey
pled guilty to one count of bank theft in violation of 18 U.S.C. § 2113(b), the
district court ordered Mr. Bailey to forfeit $66,613.63 — an amount equal to what
Mr. Bailey embezzled from his employer, First Partners Bank — to the United
States pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c). Prior to
being indicted, Mr. Bailey had voluntarily paid $65,500 to First Partners Bank. As
part of his judgment, Mr. Bailey was also ordered to pay the remaining $1,113.63
to the Bank in restitution.
On appeal, Mr. Bailey argues ordering him to pay forfeiture, after he
voluntarily paid restitution, is against public policy. Mr. Bailey further argues the
substitute property forfeiture provision is inapplicable in this case because the
proceeds of his crime are now with the victim, First Partners Bank, and to “the
extent that the Government claims that it has some entitlement to that money, the
Government knows exactly where to find it.” Appellant’s Br. at 5.
We review de novo a district court’s legal conclusions regarding forfeiture.
See United States v. Puche, 350 F.3d 1137, 1153 (11th Cir. 2003). For the reasons
which follow, we affirm the district court’s forfeiture order.
According to the applicable civil forfeiture statute, 18 U.S.C. § 981(a)(1)(C),
“[a]ny property, real or personal, which constitutes or is derived from proceeds
traceable to a violation” of a qualifying offense is subject to forfeiture to the
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United States. 18 U.S.C. § 981(a)(1)(C) (alteration added). Among the qualifying
offenses for which the statute authorizes forfeiture is a violation of 18 U.S.C. §
2113, involving bank theft. See 18 U.S.C. §§ 981(a)(1)(C) & 1956(c)(7)(D).
As we have explained, 28 U.S.C. § 2461(c) “make[s] criminal forfeiture
available in every case that the criminal forfeiture statute does not reach but for
which civil forfeiture is legally authorized.” United States v. Padron, 527 F.3d
1156, 1161–62 (11th Cir. 2008) (alteration added; citation omitted). “If the
defendant is convicted of the offense giving rise to the forfeiture, the court shall
order the forfeiture of the property as part of the sentence in the criminal case . . .
.” 28 U.S.C. § 2461(c) (alteration added).
Under § 2461(c), the procedures for criminal forfeitures are governed by 21
U.S.C. § 853. In turn, § 853(p) allows the forfeiture of “substitute property” in
certain situations, including when the defendant’s actions have caused the property
subject to forfeiture to be “transferred or sold to, or deposited with, a third party,”
“substantially diminished in value,” or “commingled with other property which
cannot be divided without difficulty.” 21 U.S.C. § 853(p)(1). In such a case, “the
court shall order the forfeiture of any other property of the defendant, up to the
value” of the original property subject to forfeiture. Id. § 853(p)(2). Once funds
have been ordered forfeited, the Attorney General is authorized, in her discretion,
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to retain the forfeited property rather than transfer it as restoration to the victim of
the offense. See 18 U.S.C. § 981(e)(6).
Turning first to Mr. Bailey’s public policy argument against paying both
forfeiture and restitution, we have refused to offset the required forfeiture by
restitution already paid to victims, recognizing that forfeiture and restitution are
separate concepts serving different goals. See United States v. Hoffman-Vaile, 568
F.3d 1335, 1344 (11th Cir. 2009) (rejecting argument that appellant’s forfeiture
amount should be reduced because she had already paid restitution to the other
victims, noting, “[a]lthough ‘this might appear to be a ‘double dip,’ restitution and
forfeiture serve different goals.’”) (brackets added and omitted) (quoting United
States v. Leahy, 464 F.3d 773, 793 n.8 (7th Cir. 2006)); United States v. Joseph,
743 F.3d 1350, 1354 (11th Cir. 2014) (“We have held that a defendant is not
entitled to offset the amount of restitution owed to a victim by the value of
property forfeited to the government, or vice versa, because restitution and
forfeiture serve distinct purposes.”) (emphasis added; citations omitted). “While
restitution seeks to make victims whole by reimbursing them for their losses,
forfeiture is meant to punish the defendant by transferring his ill-gotten gains to the
United States Department of Justice . . . .” Joseph, 743 F.3d at 1354 (alteration
added; citations omitted). Consistent with this principle, we have held that pre-
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indictment, voluntary restitution does not affect the amount of any forfeiture. See
United States v. Browne, 505 F.3d 1229, 1280–81 (11th Cir. 2007).
Having concluded that our precedent mandates the order of forfeiture here,
and that the amount of forfeiture is not to be offset by Mr. Bailey’s voluntary
restitution, we turn to Mr. Bailey’s argument against the applicability of the
substitute property forfeiture provision. Mr. Bailey claims that the government
knows the disposition of the stolen property, and that he is not alleged to have
comingled the money, hidden the money, or used the money to buy real or
personal property that needs to be liquidated. This representation appears to be in
direct contrast to the government’s contention it is unable to trace the location of
the stolen funds because once Mr. Bailey transferred the funds out of the bank, into
his personal accounts, and to a credit card company to pay off his debts, the funds
were transferred to a third-party and commingled with other property. Indeed, Mr.
Bailey’s plea agreement reflects his admission to using approximately $60,000.00
of the embezzled funds toward paying his personal credit card accounts. The
government therefore maintains the substitute property forfeiture provisions, 21
U.S.C. § 853(p)(1)(B) and (E), are applicable.
The final order of forfeiture permits the government to move, pursuant to
Federal Rule of Criminal Procedure 32.2(e), to amend the order to apply to
substitute property to satisfy the forfeiture money judgment in whole or in part. As
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of yet, however, the government has not taken any action to enforce the forfeiture
judgment and the district court has not ruled on the question of whether the
property has been transferred to a third party, or become so commingled that it
may not be forfeited directly such that substitute property must be forfeited instead.
Thus, the issue is not ripe at this time.
In sum, the district court did not err in ordering forfeiture in the amount of
$66,613.63. Accordingly, we affirm the forfeiture order.
AFFIRMED.
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