United States v. Alamoudi ( 2006 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 05-4359
ABDURAHMAN M. ALAMOUDI,
Defendant-Appellant.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, District Judge.
(CR-03-513)
Argued: May 24, 2006
Decided: June 26, 2006
Before NIEMEYER and MOTZ, Circuit Judges,
and HAMILTON, Senior Circuit Judge.
Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge Niemeyer and Senior Judge Hamilton joined.
COUNSEL
ARGUED: Tonya Lynn Mitchell, MOORE & VAN ALLEN, Char-
lotte, North Carolina, for Appellant. Gordon Dean Kromberg, Assis-
tant United States Attorney, OFFICE OF THE UNITED STATES
ATTORNEY, Alexandria, Virginia, for Appellee. ON BRIEF: James
P. McLoughlin, Jr., Alton L. Gwaltney, III, MOORE & VAN
ALLEN, Charlotte, North Carolina; Stanley L. Cohen, New York,
2 UNITED STATES v. ALAMOUDI
New York, for Appellant. Paul J. McNulty, United States Attorney,
Steven P. Ward, Special Assistant United States Attorney, OFFICE
OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for
Appellee.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
This case concerns the extent of the Government’s authority to
seek forfeiture of substitute assets following the entry of a plea agree-
ment and a consent order of forfeiture. Abdurahman Muhammed Ala-
moudi appeals the district court’s grant of the Government’s motion
for forfeiture of substitute assets. For the reasons that follow, we
affirm.
I.
On July 30, 2004, Alamoudi entered into a plea agreement with the
United States in which he agreed to plead guilty to engaging in pro-
hibited financial transactions with Libya, in violation of 50 U.S.C.A.
§ 1705 (West 2003); unlawfully obtaining naturalization, in violation
of 18 U.S.C.A. § 1425(a) (West 2000); and "corrupt[ly] endeavor[ing]
to impede the due administration of the internal revenue laws," in vio-
lation of 26 U.S.C.A. § 7212(a) (West 2002).
Alamoudi stipulated that he had participated in a sophisticated
criminal scheme involving the attainment and transmission of money
from Libya to the United States and abroad. He admitted that his
unlawful conduct involved: "[e]ngag[ing] in financial transactions
with the Government of Libya, a country designated under Section
6(j) of the Export Administration Act of 1979 as a country supporting
international terrorism"; traveling to Libya on his United States pass-
port without first obtaining the necessary license to do so as required
by federal law; lying to United States officials by falsely denying that
he had traveled to Libya when questioned upon return from such vis-
its; concealing his interests and investments in an account in Switzer-
land by not reporting them on his tax returns; laundering money; and
UNITED STATES v. ALAMOUDI 3
conspiring with the Libyan government and dissidents of Saudi Ara-
bia to assassinate Saudi Crown Prince Abdullah.
As part of the plea agreement, Alamoudi consented to forfeit a total
of $910,000 in property "traceable to, derived from, fungible with, or
that constitutes the proceeds of" his criminal activity. He also agreed
to "waive all constitutional and statutory challenges in any manner . . .
to any forfeiture carried out in accordance with this plea agreement
on any grounds."
The district court accepted the plea agreement and sentenced Ala-
moudi to 23 years imprisonment and three years of supervised release
and imposed $20,300 in fines. The court also entered a consent order
of forfeiture in which Alamoudi agreed to forfeit the "$340,000 in
cash" that had already been confiscated by British authorities "as
property derived from, traceable to, or a substitute for proceeds of his
offense," and to "further . . . forfeit" an additional "$570,000, repre-
senting proceeds of his violations of conviction."
On January 12, 2005, a year and a half after the entry of the con-
sent order of forfeiture, the Government moved for forfeiture of sub-
stitute assets, pursuant to Fed. R. Crim. P. 32.2(e) and 21 U.S.C.A.
§ 853(p) (West Supp. 2006), stating that "the United States is unable
to locate the additional $570,000 . . . despite diligent effort." In sup-
port of its motion, the Government submitted the affidavit of FBI
Special Agent Debra LaPrevotte in which she explained that "such
proceeds likely have been transferred or sold to or deposited with a
third party, been placed beyond the jurisdiction of the court, or are
concealed in some manner unknown to law enforcement personnel."
Because the Government could not locate the additional $570,000, it
asked the court to substitute "certain properties in which the defen-
dant appears to have a financial interest," including three parcels of
real property and an automobile, to provide the Government with the
assets to which it was entitled. The district court granted the Govern-
ment’s motion and authorized the forfeiture of these substitute assets.
Alamoudi noted a timely appeal, challenging the forfeiture of substi-
tute assets on three grounds.
4 UNITED STATES v. ALAMOUDI
II.
Alamoudi first argues that the Government breached both the plea
agreement and the accompanying consent order of forfeiture by seek-
ing forfeiture of substitute assets.1 He relies on the plea agreement’s
failure to mention forfeiture of substitute assets, and the consent
order’s reference to "substitute" assets only in connection with the
$340,000 already seized in London. He argues that this amounts to a
waiver by the Government of its right to seek forfeiture of substitute
assets with respect to the remaining $570,000. This argument fails
because it creates waiver where none exists, misconstrues the lan-
guage in the consent order, and ignores the controlling statutory
scheme.
The plea agreement provides in pertinent part that Alamoudi will
forfeit
all interests in all assets derived from his transactions with
Libya that he owns or over which he exercises control,
directly or indirectly, as well as any property that is trace-
able to, derived from, fungible with, or that constitutes the
proceeds of his offense, including but not limited to the
$340,000 in cash seized from him in London in August
2003, and all other monies he received or that were trans-
ferred on his behalf from the Government of Libya and/or
the World Islamic Call Society, in the amount of $910,000.
Pursuant to this agreement, the court entered a consent order of forfei-
ture in which the parties agreed that "[t]he $340,000 in cash" already
seized from Alamoudi "is forfeited to the United States . . . as prop-
erty derived from, traceable to, or a substitute for the proceeds of his
offense." The order further provided that Alamoudi "shall further for-
feit $570,000, representing the violations of conviction."
The plea agreement and consent order expressly provide for forfei-
ture, and further specify the exact amount to be forfeited. Thus, this
is not a case in which the Government agreed to limit the forfeiture
1
Alamoudi does not challenge the original order of forfeiture; rather,
he only appeals the forfeiture of substitute assets.
UNITED STATES v. ALAMOUDI 5
amount but then seeks forfeiture of additional property. Compare In
re Arnett, 804 F.2d 1200, 1202-03 (11th Cir. 1986) (holding that the
Government breached plea agreement when it promised it would seek
only the $3,000 found on the defendant and nothing more, but then
sought forfeiture of defendant’s farm). Nor is this a case in which the
plea agreement provides for dismissal of the forfeiture claim. Com-
pare United States v. Alexander, 869 F.2d 91, 95 (2d Cir. 1989)
(holding that the Government breached plea agreement by refusing to
dismiss the forfeiture claim as promised).
In fact, nothing in this plea agreement or consent order expressly
prohibits the Government from seeking forfeiture of substitute assets
at all. Nor, notwithstanding Alamoudi’s contrary arguments, does the
consent order implicitly waive or limit the Government’s right to seek
forfeiture of substitute assets. The consent order does note in one
paragraph that the $340,000 already seized represents property "de-
rived from, traceable to, or a substitute for the proceeds of his
offense." (Emphasis added). But this language merely characterizes
property that Alamoudi has already forfeited, as opposed to property
(the remaining $570,000) the Government seeks to forfeit. In stating
that some of the already seized $340,000 may be a "substitute" for
tainted property (so that Alamoudi cannot later claim that the Govern-
ment mistakenly seized the forfeited money), the Government did not
waive its right to later seek forfeiture of substitute assets for the sepa-
rate and remaining $570,000 discussed in a different paragraph of the
consent order.
Because neither the plea agreement nor the consent order waives
the Government’s right to seek forfeiture of substitute assets for the
additional $570,000 to which it is entitled, the statutory scheme con-
trols. Section 981(a)(1)(C) of Title 18 (West Supp. 2006) subjects to
forfeiture "[a]ny property, real or personal, which constitutes or is
derived from proceeds traceable to" violations of certain laws, includ-
ing "any offense constituting ‘specified unlawful activity,’" as defined
by 18 U.S.C.A. § 1956(c)(7) (West Supp. 2006). Section 1956(c)(7)
includes as a "specified unlawful activit[y]" any violation of the Inter-
national Emergency Economic Powers Act ("IEEPA"), 50 U.S.C.A.
§ 1705, an offense to which Alamoudi pled guilty. If a defendant is
convicted of such an offense, "the court shall order the forfeiture of
6 UNITED STATES v. ALAMOUDI
the property as part of the sentence." 28 U.S.C.A. § 2461(c) (West
Supp. 2006).
To carry out such a forfeiture, § 2461(c) instructs the court to fol-
low the procedures set forth in 21 U.S.C.A. § 853 (West 1999 &
Supp. 2006). See 28 U.S.C.A. § 2461(c). Pursuant to § 853(p), a court
"shall order the forfeiture of any other property of the defendant" if
it finds that, "as a result of any act or omission of the defendant," the
property subject to forfeiture under the statute "(A) cannot be located
upon the exercise of due diligence; (B) has been transferred or sold
to, or deposited with, a third party; (C) has been placed beyond the
jurisdiction of the court; (D) has been substantially diminished in
value; or (E) has been commingled with other property which cannot
be divided without difficulty." 21 U.S.C.A. § 853(p)(2) (emphasis
added).
Section 853(p) is not discretionary; rather, the statute mandates for-
feiture of substitute assets "when the tainted property has been placed
beyond the reach of a forfeiture." See United States v. McHan, 345
F.3d 262, 271 (4th Cir. 2003). Nothing in the statute requires that, as
a prerequisite to seeking forfeiture of substitute assets, the Govern-
ment must first reference substitute assets or § 853(p) in a plea agree-
ment. Rather, barring the Government’s waiver of its rights, see e.g.,
Arnett, 804 F.2d at 1201, when the Government cannot reach the
property initially subject to forfeiture, federal law requires a court to
substitute assets for the unavailable tainted property. Nowhere in the
plea agreement has the Government waived its right under § 2461
(and thus under § 853(p)) to seek substitute assets, and therefore, the
underlying statutory scheme not only permitted but mandated the dis-
trict court to order forfeiture of substitute assets if the conditions of
§ 853(p) were satisfied.
III.
Alternatively, Alamoudi contends that the district court violated his
Sixth Amendment rights by permitting forfeiture of substitute assets
based on facts found not by a jury beyond a reasonable doubt, but
rather by the judge by a preponderance of the evidence. According to
Alamoudi, in granting the Government’s order for forfeiture of substi-
tute assets under § 853(p), the district court violated his "right" to
UNITED STATES v. ALAMOUDI 7
have a jury find facts "essential to his punishment," in direct contra-
vention of United States v. Booker, 543 U.S. 220, 232 (2005). Even
if Alamoudi did not waive this contention in his plea agreement (and
it appears likely that he did), the argument fails.
Booker makes clear that the "right" claimed by Alamoudi is only
"implicated" when a court imposes a punishment beyond the maxi-
mum that the court could have imposed based solely on facts admitted
by the defendant or determined by the jury. Id. Thus, for a Booker
violation to be possible at all, the law must impose a maximum above
which a sentence may not rise.
Although criminal forfeiture undoubtedly constitutes an element of
punishment, see Libretti v. United States, 516 U.S. 29, 39 (1995),
there is no statutory (or guideline) maximum limit on forfeitures.
Rather, criminal forfeitures are indeterminate and open-ended, and
may include all property "constituting, or derived from, any proceeds
the person obtained, directly or indirectly," from his unlawful con-
duct. 21 U.S.C.A. § 853(a). Once a jury determines or a defendant
admits the elements of an offense triggering a forfeiture penalty —
like 50 U.S.C.A. § 1705 in the case at hand — the subsequent forfei-
ture of tainted property is necessarily permissible and within the
authorized sentence. See 21 U.S.C.A. § 853(a). Because no statutory
or other maximum limits the amount of forfeiture, a forfeiture order
can never violate Booker.
We note that in holding that the Sixth Amendment right recognized
in Booker does not apply to forfeiture orders, we join every circuit to
consider the issue.2 See United States v. Leahy, 438 F.3d 328, 332-33
(3d Cir. 2006) (en banc); United States v. Hively, 437 F.3d 752, 763
(8th Cir. 2006); United States v. Hall, 411 F.3d 651, 654 (6th Cir.
2
In fact, in Booker itself, the Court explicitly exempted from its hold-
ing forfeitures imposed under 18 U.S.C.A. § 3554. See Booker, 543 U.S.
at 258. That statute provides for forfeiture when a court imposes a sen-
tence for violations of RICO and certain portions of the Comprehensive
Drug Abuse Prevention and Control Act of 1970. 18 U.S.C.A. § 3554(West 2000). Although § 853(b), not § 3554, authorizes the forfeiture at
issue here, the rationale for explicitly exempting forfeiture applies
equally.
8 UNITED STATES v. ALAMOUDI
2005); United States v. Fruchter, 411 F.3d 377, 382-83 (2d Cir.
2005); United States v. Tedder, 403 F.3d 836, 841 (7th Cir. 2005).
Moreover, despite Alamoudi’s arguments to the contrary, an order
authorizing forfeiture of substitute assets pursuant to § 853(p) does
not require a jury determination because it does not at all increase the
amount of forfeiture. Rather, § 853(p) simply requires the court to
allow the Government to seize substitute property when the defendant
has placed the assets initially sought — and to which the Government
is legally entitled — beyond the court’s reach. See 21 U.S.C.A.
§ 853(p). Congress enacted the substitute assets provision "to make
the Government’s forfeiture efforts more effective." United States v.
Moffitt, Zwerling & Kemler, 83 F.3d 660, 669 (4th Cir. 1996). See
also McHan, 345 F.3d at 271-72. Section 853 provides a tool that the
court can use to enforce a criminal forfeiture; it neither leads to nor
allows for an increase in the dollar amount of the forfeiture, and
therefore, does not increase the punishment imposed. A judicial deter-
mination that the government has satisfied the requirements of
§ 853(p) does not involve a judge’s finding of facts that increases the
penalty at all, let alone beyond the statutory maximum, and therefore
cannot constitute a violation of Booker.3
Therefore, the Sixth Amendment applies neither to criminal forfei-
tures in general nor to a district court’s order permitting the forfeiture
of substitute assets in an appropriate case. To hold otherwise would
reward those defendants who, in anticipation of conviction, succeed
in transferring assets beyond the reach of the court, an outcome
wholly inconsistent with the purposes of § 853(p). See McHan, 345
F.3d at 272.
3
Alamoudi’s argument that the order allowing forfeiture of substitute
assets in this case increases his punishment beyond the statutory maxi-
mum permitted by the forfeiture statute is meritless. That order expressly
limits forfeiture of substitute assets to the same amount to which the
original consent order of forfeiture entitled the Government. Indeed, the
substitute assets order provides that if the value of the seized substitute
assets exceeds this amount, the Government "shall remit such excess to
the defendant." Thus, the substitute assets order in no way increases the
penalty above that imposed by the consent order of forfeiture; it only
substitutes readily attainable assets for assets rendered inaccessible by
the defendant. See 21 U.S.C.A. § 853(p).
UNITED STATES v. ALAMOUDI 9
IV.
Finally, Alamoudi maintains that the Government failed to estab-
lish the prerequisites necessary to forfeit substitute assets. We dis-
agree.
For a court to order the forfeiture of substitute assets under
§ 853(p), it must find that "as a result of any act or omission of the
defendant," the forfeitable property "(A) cannot be located upon the
exercise of due diligence; (B) has been transferred to . . . a third party;
(C) has been placed beyond the jurisdiction of the court; (D) has been
substantially diminished in value; or (E) has been commingled with
other property which cannot be divided without difficulty." 21
U.S.C.A. § 853(p). See also McHan, 345 F.3d at 271. Courts interpret
this provision liberally so as to "thwart efforts by a defendant to cir-
cumvent the economic impact of an anticipated criminal forfeiture
sentence." Id. at 272. See also 21 U.S.C.A. § 853(o).
In this case, the Government submitted a sworn affidavit of FBI
Special Agent LaPrevotte in which she declared that, "[s]ince 2003,
agents of the Internal Revenue Service and I have conducted an
extensive review of bank account[s], tax returns and financial docu-
ments associated with Alamoudi," that we "have searched for the
$570,000 Alamoudi received from Lybia but have not been able to
locate it." Based on her "experience and training," Agent LaPrevotte
concluded that, "as a result of acts or omissions of the defendant," the
$570,000 had "been transferred to, or deposited with a third party;
placed beyond the jurisdiction of the court; substantially diminished
in value; or commingled with other property which cannot be divided
without difficulty." Thus, "despite the exercise of due diligence," the
Government had been unable to locate the property subject to forfei-
ture.
Alamoudi argues that this affidavit does not satisfy the require-
ments of § 853(p), but he points to no evidence countering it, and
other evidence in the record supports the affidavit’s allegations. In the
plea agreement, Alamoudi conceded that he received $910,000 from
Libyans, that he deposited the money he received in bank accounts
maintained abroad, that he did not report these foreign accounts or his
transactions in an attempt to evade the tax laws, and that he conducted
10 UNITED STATES v. ALAMOUDI
his activities so as to avoid "attracting the attention of law enforce-
ment and regulatory authorities"; he therefore admitted to engaging in
a sophisticated scheme to conceal the proceeds of his criminal con-
duct and to keep the tainted property beyond the reach of the court.
Agent LaPrevotte’s declaration that she could not with due diligence
locate the forfeitable property due to Alamoudi’s acts or omissions is
completely consistent with Alamoudi’s admissions in the plea agree-
ment, and Alamoudi presented nothing to dispute the agent’s sworn
affidavit at the hearing held on the Government’s motion for forfei-
ture of substitute assets. Agent LaPrevotte’s affidavit therefore
remains uncontested in the record. Given this undisputed evidence
establishing the prerequisites to § 853(p), the Government met its bur-
den, and the district court properly granted the forfeiture of substitute
assets.
V.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.