United States v. George Georgiou ( 2020 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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Nos. 18-2498 & 18-2762
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UNITED STATES OF AMERICA
v.
GEORGE GEORGIOU,
Appellant
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Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Criminal Action No. 2-09-cr-00088-001)
District Judge: Honorable Robert F. Kelly
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Submitted Under Third Circuit L.A.R. 34.1(a)
January 21, 2020
Before: AMBRO, MATEY, and FUENTES, Circuit Judges
(Opinion filed: January 28, 2020)
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OPINION *
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AMBRO, Circuit Judge,
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
George Georgiou appeals the District Court’s denial of his motions to vacate
forfeiture and substitute-asset orders, along with a restitution order, against him. For the
reasons stated below, we affirm those orders.
A federal jury convicted Georgiou of securities fraud, wire fraud, and conspiracy
for his participation in a stock-manipulation scheme. The District Court sentenced him to
300 months’ imprisonment, ordered restitution of $55.8 million, and ordered him to
forfeit $26 million. We upheld this sentence on direct appeal. United States v. Georgiou,
777 F.3d 125, 146–47 (3d Cir. 2015), cert. denied, 136 S. Ct. 401 (2015).
While Georgiou’s direct appeal was pending, the Government filed an ex parte
motion for entry of a preliminary order of forfeiture for a “substitute asset,” specifically
$9.2 million in an account at Royal Bank of Canada (“RBC”) in partial satisfaction of the
forfeiture order. The account was held in the name of Brent David Emanuel, a nominee
of Georgiou. The Court granted the motion the same day. It thereafter granted
Georgiou’s unopposed motion to obtain copies of the sealed forfeiture motion, and then
entered an amended order forfeiting the RBC account to the Government. After the
Government provided notice to the interested parties, Emanuel followed up by filing a
pro se ancillary petition asserting an interest in the RBC account. He then expressed his
intent to withdraw the ancillary petition, and the District Court dismissed it.
While Emanuel’s petition was pending, Georgiou filed a pro se motion under the
All Writs Act, 28 U.S.C. § 1651, for a writ of audita querela to vacate the original
forfeiture and substitute asset orders. “The common law writ of audita querela permitted
a defendant to obtain relief against a judgment or execution because of some defense . . .
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arising subsequent to the rendition of the judgment.” Massey v. United States, 581 F.3d
172, 174 (3d Cir. 2009) (citation and internal quotation marks omitted) (emphasis added),
cert. denied, 130 S. Ct. 2426 (2010). It “has been abolished in civil cases . . . [but] is
available in criminal cases to the extent that it fills in gaps in the current system of post-
conviction relief.” Id.
Georgiou sought relief from his forfeiture and substitute asset orders based on the
Supreme Court’s decision in Honeycutt v. United States, 137 S. Ct. 1626 (2017), that
issued after his conviction became final. The Supreme Court held that a defendant who
participated in the sales of chemicals used to manufacture drugs could not be jointly and
severally liable for the forfeiture imposed because he did not personally receive any of
the proceeds. Id. at 1630–32. Georgiou argued the forfeiture and substitute asset orders
were based on joint and several liability and thus barred by Honeycutt.
The District Court denied Georgiou’s audita querela motion and entered a final
order of forfeiture for a substitute asset as to the RBC account. It also denied his pro se
motion to stay execution of the final forfeiture and substitute asset orders, or alternatively
for reconsideration. He appeals.
Georgiou separately moved under the All Writs Act to vacate the District Court’s
restitution order based on the Supreme Court’s decision in RJR Nabisco, Inc. v. European
Cmty., 136 S. Ct. 2090 (2016), which was also issued after his conviction became final.
RJR Nabisco held that, though some of the substantive provisions of the Racketeer
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961–1968, apply
extraterritorially, the private right of action requires an injury in the United States. RJR
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Nabisco, 136 S. Ct. at 2104–05, 2111. Georgiou argued that the nearly $56 million he
was ordered to repay to victims was impermissibly predicated on foreign injuries because
the Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C. § 3663A, does not
expressly authorize a remedy for extraterritorial harm. The District Court also denied this
motion and Georgiou appealed. We thereafter consolidated the forfeiture and restitution
appeals. 1
Our jurisdiction is per 28 U.S.C. § 1291. We review the District Court’s legal
conclusions de novo. See United States v. Rhines, 640 F.3d 69, 71 (3d Cir. 2011) (per
curiam).
We agree with the District Court that audita querela is not an available remedy to
vacate Georgiou’s final forfeiture and substitute asset orders. 2 As noted, audita querela
is a remedy that applies only where there is a gap in the system of post-conviction relief.
Massey, 581 F.3d at 174; see also United States v. Potts, 765 F. App’x 638, 640 (3d Cir.
2019) (stating “we have yet to find a gap in the federal post-conviction framework that
needed to be filled with a writ of audita querela”). Such a gap must be systemic and not
merely reflect a defendant’s inability to use available remedies. See Cradle v. United
1
Georgiou also filed a pro se motion to vacate, correct, or set aside his conviction
and sentence under 28 U.S.C. § 2255. On June 19, 2018, the District Court denied his
motion. Georgiou’s appeal of that denial currently is pending before our Court in No. 18-
3168.
2
The District Court alternatively held that Honeycutt did not announce a new
substantive rule of criminal procedure. Because we conclude audita querela is not an
available remedy, we need not reach the alternative ruling.
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States ex rel. Miner, 290 F.3d 536, 538 (3d Cir. 2002) (stating that “[i]t is the inefficacy
of the remedy, not the personal inability to use it, that is determinative”).
Georgiou has failed to identify a gap in the post-conviction relief system here—the
orders entered could have been challenged on direct appeal. Indeed, “a criminal
forfeiture is part of the defendant’s sentence and must be challenged on direct appeal or
not at all.” Young v. United States, 489 F.3d 313, 315 (7th Cir. 2007). If a defendant
wishes to challenge a forfeiture or substitute asset order, he must file an appeal within 14
days of its entry. Fed. R. App. P. 4(b)(1). Georgiou here failed to challenge those orders
on direct appeal. Indeed, he did not object to the forfeiture money judgment at
sentencing, thus waiving the issue on appeal. Georgiou, 777 F.3d at 147. 3 Georgiou
instead litigated the forfeiture issues in Canada and sought to prevent the Canadian
authorities from honoring our District Court’s order. Accordingly, audita querela is not a
vehicle by which Georgiou can appeal the forfeiture and substitute asset orders. Even if
it were available, Georgiou’s case is readily distinguishable from Honeycutt. There the
Supreme Court barred the imposition of forfeiture liability against a co-conspirator for
proceeds he never obtained. 137 S. Ct. at 1635. Here, by contrast, there is ample
3
Georgiou argues that challenging the joint and several nature of his forfeiture
liability would have been futile because the issue was barred by settled Third Circuit
precedent at the time. Georgiou Br. 11–12. However, the Supreme Court has rejected
futility as cause for failing to appeal in similar circumstances. See Bousley v. United
States, 523 U.S. 614, 623 (1998) (stating that “futility cannot constitute cause if it means
simply that a claim was ‘unacceptable to that particular court at that particular time’”)
(citation omitted). Despite contrary precedent, Georgiou had the ability to challenge his
forfeiture money judgment just as the defendant in Honeycutt did.
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evidence in the record that Georgiou obtained millions in proceeds from the scheme.
Gov’t Supp. App. 67, 72–73, 98, 100, 115–21.
As for restitution, Georgiou previously raised an extraterritoriality challenge to the
restitution amount in his direct appeal, and we rejected that argument. Georgiou, 777
F.3d at 132–38. RJR Nabisco, 136 S. Ct. at 2099–2103, applied the extraterritoriality test
announced in Morrison v. National Australia Bank Ltd., 561 U.S. 247, 255 (2010), a
decision we considered in Georgiou’s direct appeal. Georgiou, 777 F.3d at 137. We
have already held that his fraud occurred in the United States. Id. (holding that evidence
demonstrated that Georgiou engaged in “domestic transactions” under Morrison). In any
event, the Supreme Court has recognized the legitimacy of seeking restitution for foreign
victims of U.S.-based crimes. See Pasquantino v. United States, 544 U.S. 349, 365–68,
371 (2005).
* * * * *
In this context, we affirm the orders of the District Court.
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