Bongiorno v. United States ( 2023 )

22-2900
Bongiorno v. United States
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION
TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS
GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S
LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH
THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY
CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 15th day of November, two thousand twenty-three.
PRESENT:
JOHN M. WALKER, JR.,
REENA RAGGI,
RICHARD J. SULLIVAN,
Circuit Judges.
_____________________________________
RUDY BONGIORNO,
Petitioner-Appellant,
v. No. 22-2900
UNITED STATES,
Respondent-Appellee. *
_____________________________________
* The Clerk of Court is respectfully directed to amend the official case caption as set forth above.
For Petitioner-Appellant: Donna H. Clancy, The Clancy Law
Firm, P.C., New York, NY.
For Respondent-Appellee: Louis A. Pellegrino, Hagan Scotten,
Assistant United States Attorneys,
for Damian Williams, United States
Attorney for the Southern District
of New York, New York, NY.
Appeal from orders of the United States District Court for the Southern
District of New York (P. Kevin Castel, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the October 11, 2022 and November 29, 2022
orders of the district court are AFFIRMED.
Petitioner Rudy Bongiorno appeals from orders denying (1) his petition for
relief pursuant to Federal Rule of Civil Procedure 60(b)(6) and Federal Rule of
Criminal Procedure 41(g), and (2) his motion to reconsider that decision. We
review a district court’s grant or denial of equitable relief under Rule 41(g) for
abuse of discretion, analyzing any legal conclusion underlying that decision de
novo. United States v. Zaleski, 686 F.3d 90, 92 (2d Cir. 2012). We review the denial
of a Rule 60(b) motion, as well as the denial of a motion for reconsideration, for
abuse of discretion. Mirlis v. Greer, 952 F.3d 36, 50 (2d Cir. 2020); Olson v. Major
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League Baseball, 29 F.4th 59, 72 (2d Cir. 2022). We assume the parties’ familiarity
with the facts, procedural history, and issues on appeal.
Bongiorno is the husband of Annette Bongiorno, a longtime employee of
Bernard L. Madoff Investment Securities, who was convicted of multiple offenses
in connection with her participation in Madoff’s scheme to defraud investors. As
relevant here, Bongiorno petitions for the return of funds and other property held
in an E*Trade account (the “E*Trade Account”) that was forfeited to the
government pursuant to a Final Order of Forfeiture entered, with Bongiorno’s
consent, in Annette’s criminal case. Bongiorno advances several arguments as to
why he is entitled to the return of the forfeited funds held in this account, none of
which has merit.
First, Bongiorno argues that he is entitled to the return of the forfeited funds
pursuant to Rule 41(g), which allows “[a] person aggrieved by an unlawful search
and seizure of property or by the deprivation of property [to] move for the
property’s return.” Fed. R. Crim. P. 41(g). Notably, Rule 41(g) provides an
“equitable remedy that is available only when there is no adequate remedy at law
and the equities favor the exercise of jurisdiction.” De Almeida v. United States,
459 F.3d 377, 382 (2d Cir. 2006); see also id. (explaining that jurisdiction under
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Rule 41 must be “exercised with great restraint and caution” (internal quotation
marks omitted)). But while we have not foreclosed the possibility that a third
party may use Rule 41(g) to challenge the government’s seizure of property before
an indictment is filed, see id. at 381–82, “the criminal forfeiture statute limits a third
party’s right to challenge a post-indictment forfeiture order to the two grounds
identified in 21 U.S.C. § 853(n)(6),” United States v. Watts, 786 F.3d 152, 156 (2d Cir.
2015) (emphasis added).
Here, Bongiorno has failed to cite any authority for the proposition that a
third party may invoke Rule 41(g) to collaterally attack a final order of forfeiture,
and we are aware of none. Indeed, the law is clear that the only way a third party
may challenge a post-indictment forfeiture order is through an ancillary
proceeding under section 853(n), which Bongiorno declined to pursue. See United
States v. Daugerdas, 892 F.3d 545, 553 (2d Cir. 2018) (“It is well settled that section
853(n) provides the exclusive means by which a third party may lay claim to
forfeited assets.” (internal quotation marks and alterations omitted)); De Almeida,
459 F.3d at 381 (“An ancillary proceeding [under 21 U.S.C. § 853(n)] is . . . the only
avenue for a post-indictment third-party claim to forfeited property.”).
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Bongiorno’s contention that “Rule 41(g) should still be available to him as
an equitable remedy” because he has shown that he had “no other remedy at law,”
Bongiorno Reply at 24, is equally unfounded. Bongiorno himself recognizes that
he had an opportunity to assert his interest in the forfeited property in connection
with his wife’s case and that he did, in fact, initially request a hearing regarding
the extent of the contemplated forfeiture. See id. at 18–20. Rather than commence
an ancillary proceeding pursuant to section 853(n), Bongiorno – with the assistance
of counsel – instead chose to negotiate with the government. As a result of those
negotiations, Bongiorno entered into a settlement that was memorialized as a
Preliminary Order of Forfeiture that Bongiorno signed on June 20, 2016. Having
decided to forgo a hearing pursuant to section 853(n), Bongiorno cannot now claim
that he is entitled to equitable relief.
Second, Bongiorno argues that the Final Order of Forfeiture in his wife’s
criminal case should be vacated as against him pursuant to Federal Rule of Civil
Procedure 60(b)(6). 1 For relief to be warranted under Rule 60(b)(6), the movant
must make his motion “within a reasonable time” and must demonstrate
1 For the first time on appeal, Bongiorno invokes Rule 60(b)(4) as a basis for relief. Because
Bongiorno did not raise his Rule 60(b)(4) argument before the district court, this argument is
forfeited. See New York ex rel. Schneiderman v. Actavis PLC, 787 F.3d 638, 662 (2d Cir. 2015).
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“extraordinary circumstances” justifying relief. Old Republic Ins. Co. v. Pac. Fin.
Servs. of Am., Inc., 301 F.3d 54, 59 (2d Cir. 2002) (internal quotation marks omitted).
It is plain that neither requirement is met here.
First, Bongiorno filed his motion nearly six years after the Final Order of
Forfeiture was entered, which we have held is, in most circumstances, not a
reasonable time. See Rodriguez v. Mitchell, 252 F.3d 191, 201 (2d Cir. 2001) (finding
that motion made “three and one-half years from the date judgment was entered”
was not reasonable under Rule 60(b)(6)); Truskoski v. ESPN, Inc., 60 F.3d 74, 76–77
(2d Cir. 1995) (finding that motion filed eighteen months after entry of judgment
was not filed in a “reasonable time” under Rule 60(b)(6)). No different conclusion
is warranted here. As the district court noted, the circumstances of which
Bongiorno now complains – including that the government purportedly failed to
conduct a proper tracing analysis with respect to the funds in the E*Trade Account
and that it overreached by negotiating with Bongiorno when he was under duress
– were clearly known to him at the time he signed the Preliminary Order of
Forfeiture.
Nor has Bongiorno identified extraordinary circumstances that would
justify relief. He certainly has not demonstrated a due process violation, since –
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as noted above – Bongiorno was notified of the government’s intention to seek
forfeiture of the E*Trade Account, announced that he planned to challenge the
forfeiture of that account and certain property in Cape Coral, Florida, retained
counsel to represent him in negotiations with the government concerning those
properties, and entered into a settlement in which he retained approximately five
million dollars in stock and ownership of the Cape Coral property in exchange for
a waiver of his right to contest the Preliminary Order of Forfeiture. His
contention that he was poorly served by his counsel is belied by the record and
falls short of the exceptional circumstances required for relief under Rule 60(b)(6).
See Harris v. United States, 367 F.3d 74, 81 (2d Cir. 2004) (“To be ‘extraordinary
circumstances’ for purposes of Rule 60(b)(6), a lawyer’s failures must be so
egregious and profound that they amount to the abandonment of the client’s case
altogether, either through physical disappearance, or constructive
disappearance.” (citations omitted)).
Third, Bongiorno argues that he is entitled to a hearing to resolve material
issues of fact as to whether the funds in the E*Trade Account were traceable to his
wife’s crimes. As an initial matter, the Rule 41(g) cases cited by Bongiorno are
irrelevant because, as explained above, Rule 41(g) does not apply here. Nor is a
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hearing required under Rule 60(b), which reserves such procedures for situations
involving “material issues of fact which could not have been properly resolved
without an evidentiary hearing.” 2 Flaks v. Koegel, 504 F.2d 702, 712 (2d Cir. 1974).
Indeed, neither the “new” documents submitted by Bongiorno nor the challenges
he makes to the method used to determine that the funds in the E*Trade Account
were tainted alter the conclusion that Bongiorno waived his right to challenge
traceability when he entered into the settlement agreement. See, e.g., Saada, 2021
WL 4824129, at *4.
Finally, Bongiorno raises a litany of arguments as to why the forfeiture of
the E*Trade Account was invalid, none of which is relevant to this appeal.
Bongiorno’s arguments that the government did not have probable cause to seize
the E*Trade Account and failed to show a substantial connection between the
E*Trade Account and Annette Bongiorno’s crimes are barred by the settlement
agreement that Bongiorno himself negotiated and signed. And, as the
government notes, the E*Trade Account was forfeited not because it was seized
2 In his reply brief, Bongiorno asserts – without authority – that we must review his request for
a hearing de novo. That is incorrect. See Gomez v. City of New York, 805 F.3d 419, 423–25 (2d Cir.
2015) (reviewing the district court’s refusal to grant a hearing for abuse of discretion); Saada v.
Golan, No. 21-876, 2021 WL 4824129, at *3 (2d Cir. Oct. 18, 2021) (same). But even under de novo
review, Bongiorno’s request for a hearing would fail.
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pursuant to a warrant but rather because it was identified in the Preliminary Order
of Forfeiture that was entered with Bongiorno’s consent. What is more,
Bongiorno’s argument that he is entitled to the “innocent owner defense” under
18 U.S.C. § 983(d) is not only barred by the settlement agreement, but is also
irrelevant since section 983(d) is inapplicable to criminal forfeiture. See United
States v. Contorinis, 692 F.3d 136, 146 (2d Cir. 2012) (explaining that because
criminal forfeiture “focuses on the disgorgement by a defendant of h[er] ill-gotten
gains,” it “cannot be imposed upon innocent owners” (internal quotation marks
omitted)).
Bongiorno’s argument that the Final Order of Forfeiture is
unconstitutionally excessive also fails. At the outset, we note that Bongiorno
waived this argument by consenting to entry of the forfeiture order. See SEC v.
Romeril, 15 F.4th 166, 172, 174–75 (2d Cir. 2021). In any event, while the Eighth
Amendment’s Excessive Fines Clause “limits the government’s power to extract
payments,” including forfeiture payments, “as punishment for some offense,”
Bongiorno was not prosecuted criminally and therefore any payments he made in
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accordance with the forfeiture order cannot be understood as punishment. 3
United States v. Bajakajian, 524 U.S. 321, 328 (1998) (internal quotation marks
omitted) (explaining that forfeiture is a “sanction” imposed after a conviction and
“cannot be imposed upon an innocent owner”); see Ingraham v. Wright, 430 U.S.
651, 671 n.40 (1977) (explaining that the Eighth Amendment does not apply until
after “a formal adjudication of guilt”). Put simply, the Eighth Amendment has
no applicability to a settlement agreement that Bongiorno negotiated and
voluntarily entered into for his own benefit. The cases that Bongiorno cites on
this point are therefore inapposite.
* * *
We have considered Bongiorno’s remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the orders of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
3 Bongiorno’s argument that the forfeiture order improperly subjected him to joint and several
liability is likewise misguided as the Final Order of Forfeiture does not purport to impose joint
and several liability on either Bongiorno or his wife.
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