United States v. Schinnell ( 1996 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
___________________
Nos. 94-11155 &
95-10213
___________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SHAWNEE LOUISE SCHINNELL,
Defendant-Appellant.
_______________________________________________
Appeals from the United States District Court for the
Northern District of Texas
________________________________________________
April 9, 1996
Before GARWOOD, EMILIO M. GARZA and DENNIS, Circuit Judges.
GARWOOD, Circuit Judge:
Pursuant to a plea agreement, defendant-appellant Shawnee
Louise Schinnell (Schinnell) pleaded guilty to one count of wire
fraud in violation of 18 U.S.C. § 1343, while preserving her right
to appeal the district court’s denial of her motion to dismiss on
double jeopardy grounds. We affirm the denial of the motion to
dismiss. We vacate Schinnell’s sentence on other grounds and
remanded for resentencing.
Facts and Proceedings Below
Beginning prior to April 1988 and continuing through at least
October 1993, Schinnell was employed in the accounting department
of Trammell-Crow, a real estate firm located in Dallas, Texas.
Between January 1990 and February 1993, Schinnell used her position
at Trammell-Crow to draw funds from Trammell-Crow bank accounts
through the use of forged signatures, fraudulent endorsements, and
wire transfers. Schinnell then used these funds to purchase for
herself real and personal property, as well as to pay expenses
associated with S&H Racing, a company that she owned and operated.1
In November 1993, Schinnell was interviewed by agents of the
Federal Bureau of Investigation (FBI), and conceded her involvement
in the offenses. Before any indictment was sought, Schinnell and
her attorney subsequently entered into negotiations regarding the
possibility of a plea agreement with members of the United States
Attorney’s office. Among the terms of the proposed plea agreement
were that Schinnell would plead guilty to one count of bank fraud
and agree not to contest any forfeiture proceedings. However, this
proposed agreement was never entered into.
Various items of personal property were subsequently seized by
the government, and administrative forfeiture proceedings pursuant
to 18 U.S.C. § 981(a)(1)(C) were instituted. Schinnell received
notice of the forfeiture proceedings, yet she chose not to file a
claim in or otherwise contest the forfeiture based upon the advice
of her new attorney that her resources were best conserved for her
criminal defense. The property was accordingly administratively
forfeited.
A superseding indictment was returned in October 1994 charging
The facts relating to the commission of the offense are
undisputed. They are recited in a factual resume in the plea
agreement.
2
Schinnell with bank fraud in violation of 18 U.S.C. § 1344 (Count
1), wire fraud in violation of 18 U.S.C. § 1343 (Count 2), and
interstate transportation of money taken by fraud in violation of
18 U.S.C. § 1957 (Count 3). Schinnell moved to dismiss the
indictment on double jeopardy grounds based upon the prior
administrative forfeiture. Following a hearing, the court issued
a one-paragraph order denying the motion on December 19, 1994.2
The following day Schinnell entered a conditional plea of guilty to
the wire fraud charge reserving her right to appeal the denial of
her motion to dismiss. The remaining counts were dismissed upon
motion of the government pursuant to a plea agreement.
The district court sentenced Schinnell to a sixty-month term
of imprisonment, a three-year term of supervised release, and
ordered her to pay restitution totaling $1,707,656.48 in monthly
installments of at least four hundred dollars per month beginning
thirty days after her release from confinement. Schinnell now
brings this appeal.
Discussion
I. Double Jeopardy
A. Procedure
The order below stated:
“Before the court is the defendant’s motion to
dismiss indictment on grounds of double jeopardy. Upon
consideration of the evidence presented at the December
16 hearing, the court finds that the civil forfeiture in
this case does not constitute punishment under the Double
Jeopardy Clause of the Constitution. See United States
v. Tilley, 18 F.3d 295 (5th Cir.), cert. denied, S.Ct.
, 63 U.S.L.W. 3414 (U.S. Nov. 28, 1994)(No. 94-243).
Consequently, the motion is DENIED.”
3
Schinnell advances two procedural arguments regarding the
district court’s disposition of her plea of double jeopardy which
she contends require remand: first, the district court erred in
allocating the burden of proof to the defendant on the double
jeopardy issue; and second, the district court failed to make
essential findings on the record as required by Fed. R. Crim. P.
12(e). We address these claims seriatim.
The parties are in agreement that the defendant bears the
initial burden of establishing a prima facie nonfrivolous claim of
double jeopardy, after which the burden shifts to the government to
demonstrate by a preponderance of the evidence why double jeopardy
principles do not bar prosecution. United States v. Deshaw, 974
F.2d 667, 670 (5th Cir. 1992); United States v. Levy, 803 F.2d
1390, 1393-94 (5th Cir. 1986); United States v. Stricklin, 591 F.2d
1112, 1117-18 (5th Cir.), cert. denied, 100 S.Ct. 449 (1979).
However, the parties disagree as to whether the district court
properly allocated this burden in the case at bar.
Having reviewed the transcript of the hearing held below, we
are satisfied that the trial court properly understood the showing
required of the defendant. During an exchange between the trial
court and counsel regarding the proper allocation of the burden on
the double jeopardy issue, the trial court remarked:
“On most motions, the movant even in a criminal case has
the burden of going forward with sufficient evidence to
show the grounds for the motion. And it does not seem to
me that Ms. Schinnell satisfies that burden by just
showing that the government has seized some property of
hers. At most, all that shows to me is that she may have
a civil claim against the government...but it certainly
doesn’t show she has been placed in jeopardy in the
4
criminal context unless she shows some relationship
between the offense charged and the property seized.”
(Emphasis added).
We believe that this statement reflects that the district court was
simply holding Schinnell to the burden of going forward with
sufficient evidence to establish a prima facie claim.3 Schinnell’s
double jeopardy claim rests upon a “multiple punishment” theory.
The relationship between the previous punishment and the punishment
the government currently seeks to impose is the essence of this
type of double jeopardy claim. Department of Revenue of Montana v.
Kurth Ranch, 114 S.Ct. 1937, 1941 n.1 (1994) (Double Jeopardy
Clause protects against multiple punishments for same offense).
Nor do we find merit in Schinnell’s argument that reversal is
required because the trial court failed to make essential findings
of fact as required by Fed. R. Crim. P. 12(e). Rule 12(e)
provides, inter alia, “[w]here factual issues are involved in
determining a motion, the court shall state its essential findings
on the record.” However, in United States v. Yeagin, 927 F.2d 798,
800 (5th Cir. 1991), we held that where the district court
indicated neither the factual findings nor the legal basis for the
denial of a motion, we were required to conduct an independent
The trial court also stated:
“I think that was what I was suggesting to [defense
counsel] myself, that since the defendant’s motion is
asserting double jeopardy she has to show how that
forfeiture action in some manner constitutes placing her
in jeopardy for a criminal offense.”
5
review of the record to determine whether the district court’s
decision was supported by “any reasonable view of the evidence.”4
Having done so, we find, for the reason stated below, that no
remand is required. The undisputed facts reflect that Schinnell’s
motion is not well taken.
B. Merits
By now it is well-established that the Double Jeopardy Clause
of the Fifth Amendment affords protection against the imposition of
multiple punishments for the same offense.5 United States v.
Halper, 109 S.Ct. 1892, 1897 (1992); Kurth Ranch, 114 S.Ct. at 1941
n.1 (1994). Indeed, the Supreme Court has observed that the
prohibition against multiple punishments is one with “deep roots in
our history and jurisprudence.” Halper, 109 S.Ct. at 1897.
Furthermore, the imposition of civil sanctions by the government,
where not rationally related to a remedial purpose, may constitute
Schinnell questions our continued adherence to Yeagin because
the decision upon which we relied in reaching our holding, United
States v. Horton, 488 F.2d 374 (5th Cir.), cert. denied, 94 S.Ct.
2405 (1974), was decided prior to the adoption of Rule 12(e).
However, Yeagin is consistent with the approach to Rule 12(e)
adopted by several of our sister circuits. See United States v.
Bloomfield, 40 F.3d 910, 913-14 (8th Cir. 1994)(en banc), cert.
denied, 115 S.Ct. 1970 (1995); United States v. Griffin, 7 F.3d
1512, 1516 (10th Cir. 1993); United States v. Harley, 990 F.2d
1340, 1341 & n. 1 (D.C. Cir.), cert. denied, 114 S.Ct. 236 (1993);
but see, United States v. Moore, 936 F.2d 287, 288-89 (6th Cir.
1991)(strict compliance with Rule 12(e)); United States v. Prieto-
Villa, 910 F.2d 601, 607 (9th Cir. 1990).
However, we take care to note that the protections of the
Double Jeopardy Clause are ordinarily implicated only by multiple
punishments for the same offense in successive proceedings in which
the defendant is in jeopardy. Multiple punishments for a given
offense imposed in a single proceeding violate the double jeopardy
clause only if they are not legislatively authorized. Halper, 109
S.Ct. at 1903 & n. 10.
6
“punishment” for purposes of the double jeopardy analysis. Id. at
1902.
Because it is undisputed that the administrative forfeiture at
issue in the present case relates to the same offense for which
Schinnell was criminally prosecuted, the only question before us
today is whether the forfeiture constituted punishment which would
operate to bar the subsequent criminal sanctions sought by the
government. On the undisputed facts before us, we conclude that
the forfeiture was not punishment, and therefore affirm the
district court’s denial of Schinnell’s motion to dismiss on grounds
of double jeopardy.
Our analysis is guided primarily by our recent opinion in
United States v. Arreola-Ramos, 60 F.3d 188, 192 (5th Cir. 1995),
in which we held that “a summary forfeiture, by definition, can
never serve as a jeopardy component of a double jeopardy motion.”
See also, United States v. Clark, 67 F.3d 1154, 1163 (5th Cir.
1995), petition for cert. filed, (U.S. Jan. 16, 1996)(No. 95-7511).
Our holding in Arreola-Ramos was based upon our determination that
an administrative summary forfeiture in which defendant had filed
no claim could neither constitute “punishment” nor former jeopardy
so as to trigger the protections of the Double Jeopardy Clause.
In concluding that a summary forfeiture could not constitute
punishment, we observed that summary proceedings are only available
for forfeitures of property that is “unclaimed” or “unowned.”
Therefore, we stated that “albeit a legal fiction, the very
issuance of a summary forfeiture establishes that no one owned the
7
Funds,” and “[c]onsequently, their forfeiture punished no one.”
Id. at 192. Several of our sister circuits have reached
essentially the same conclusion. United States v. Cretacci, 62
F.3d 307, 311 (9th Cir. 1995)(administrative forfeiture is
forfeiture of “abandoned” property), petition for cert. filed,
(U.S. Feb. 13, 1996)(No. 95-7955); United States v. Baird, 63 F.3d
1213, 1218 (3rd Cir. 1995)(property administratively forfeited
“ownerless” as a matter of law), cert. denied, 64 U.S.L.W. 3549(Feb. 20, 1996). Schinnell concedes that although she was given
notice of the forfeiture proceedings, she elected not to enter an
appearance to contest them. Therefore, the administrative
forfeiture was one of unowned or abandoned property, and could not
have punished Schinnell.6
Furthermore, having elected not to contest the forfeiture,
Schinnell was never a party to the administrative forfeiture
proceeding, and consequently there was no former jeopardy. As the
Seventh Circuit explained in its influential opinion in United
States v. Torres, 28 F.3d 1463, 1465 (7th Cir.), cert. denied, 115
S.Ct. 669 (1994) upon which we relied in Arreola-Ramos:
“You can’t have double jeopardy without a former
jeopardy. Serfass v. United States, 420 U.S. 377, 389,
95 S.Ct. 1055, 1063, 43 L.Ed. 265 (1975). As a non-
This result is not altered by the fact that the government was
aware that Schinnell owned or purported to own the property as
evidenced by plea negotiations in which the government sought
Schinnell’s agreement not to contest the forfeiture. As we noted
in Arreola-Ramos, supra, the notion that the property is “unowned”
is simply a legal fiction. See also Cretacci (failure to make
claim is abandonment); United States v. Idowu, 74 F.3d 387, 395 (2d
Cir. 1995)(finding it irrelevant whether seizing agency knows
defendant owned property).
8
party, Torres was not at risk in the forfeiture
proceeding, and ‘[w]ithout risk of a determination of
guilt, jeopardy does not attach, and neither an appeal
nor further prosecution constitutes double jeopardy.’
Id. at 391-92, 95 S.Ct. at 1064.”
See also Baird, 63 F.3d at 1218-19; United States v. Idowu, 74 F.3d
387 at 394 (2d Cir. 1995). The facts relating to the forfeiture
proceeding in the present case are indistinguishable, and
accordingly Schinnell’s claim of double jeopardy must fail.
We find additional support for our holding today in United
States v. Tilley, 18 F.3d 295 (5th Cir. 1994), which addressed
whether the administrative forfeiture of drug proceeds under 21
U.S.C. §§ 881(a)(6) and (a)(7) constituted punishment for double
jeopardy purposes. In concluding that the forfeiture did not
constitute punishment, we relied partly on the rational relation
test set forth in Halper, holding that the drug proceeds forfeited
were necessarily proportional to the harms inflicted on society by
the sale of the narcotics. However, we additionally observed:
“Even absent the rational relation test of Halper, we
would nevertheless be required to hold that the
forfeiture of the proceeds from illegal drug sales does
not constitute punishment because of the implicit and
underlying premise of the rational relation test: The
nature of the forfeiture proceeding may constitute
punishment because it involves the extraction of lawfully
derived property from the forfeiting party. . . When,
however, the property taken by the government was not
derived from lawful activities, the forfeiting party
loses nothing to which the law ever entitled him.” Id.
at 300.
We further noted, “the forfeiture of illegal proceeds, much like
the confiscation of stolen money from a bank robber, merely places
that party in the lawfully protected financial status quo that he
enjoyed prior to launching his illegal scheme.” Id. We find
9
nothing which renders this reasoning inapplicable to the forfeiture
of property purchased with proceeds admittedly obtained through
wire fraud in violation of 18 U.S.C. § 1343.
Schinnell’s contention that not all of the forfeited property
was traceable to proceeds of the fraud does not alter this result.
The forfeiture here was sought and effected solely under section
981(a)(1)(C) which applies only to “property, real or personal,
which constitutes or is derived from proceeds” of designated
offenses including violations of section 1343. Schinnell failed to
contest the forfeiture, and therefore the forfeited property has
been deemed traceable to the proceeds of her fraud. This remains
the case despite the fact that at the double jeopardy hearing
before the district court Schinnell introduced evidence through
which she sought to establish that some of the forfeited property
was not traceable to her fraud. Once the administrative forfeiture
was completed, the district court lacked jurisdiction to review the
forfeiture except for failure to comply with procedural
requirements or to comport with due process. Arreola-Ramos, 60
F.3d at 191 & n.13-14 (claims may be brought as either civil action
collaterally attacking summary forfeiture or in criminal proceeding
as a Rule 41(e) motion to return seized property, but review
limited to compliance with statutory and due process requirements);
Linarez v. United States Dept. of Justice, 2 F.3d 208, 211-14 (7th
Cir. 1993); United States v. Giraldo, 45 F.3d 509, 511 (1st Cir.
1995). Even were a judicial challenge to the forfeiture to be
available, the judicial relief would be to set aside the forfeiture
10
(in whole or in part) because the forfeited items were not within
section 981(a)(1)(C), not to bar the criminal prosecution. The
property was forfeited as criminal proceeds under section
981(a)(1)(C); if it was such proceeds, then the forfeiture is not
punishment; if it was not such proceeds, Schinnell had an adequate
remedy to contest and prevent or set aside the forfeiture of items
which were not proceeds, and, if successful, would likewise suffer
no punishment by the attempted forfeiture. By foregoing that
remedy, she cannot retroactively transmute the facially non-
punitive forfeiture into a punitive one by litigating the proceeds
issue in the criminal prosecution. Therefore, for this additional
reason also, no remand for consideration of the extent to which the
forfeited property was in fact proceeds is available.7
Accordingly, the district court did not err by denying
Schinnell’s motion to dismiss on grounds of double jeopardy.
II. Sentencing
A. Four Level Enhancement
We find no merit in Schinnell’s contention that the district
court erred in applying a four-level enhancement to her sentence
The cases from this Circuit relied upon by Schinnell for the
proposition that a remand is required to determine the source of
the forfeited property, United States v. One Rolls Royce, VIN No.
SRL 39955, 905 F.2d 89 (5th Cir. 1990) and United States v.
Gonzalez, 1996 WL 77700 (5th Cir. 1996), are distinguishable in
that they were appeals from judicial forfeiture proceedings.
Therefore, the jurisdictional defect which barred the district
court’s consideration of that question was not present in those
cases. Having failed to avail herself of the procedures for
requiring the government to institute judicial forfeiture
proceedings in the first instance, remand is not available to
reopen the inquiry into whether there was an adequate basis for
this proceeds forfeiture.
11
pursuant to section 2F1.1(b)(6)(B)for fraud over $1 million
“affecting a financial institution.”8 Paragraph five of the
probation officer’s addendum to the presentence report (PSR), which
the district court adopted, indicated that application of the
enhancement under section 2F1.1(b)(6)(B) was appropriate based upon
the fact that a tolling agreement had been entered into between
Trammell-Crow and one of its banks preserving Trammell-Crow’s
ability to bring suit against the bank to recover its lost funds.
The PSR also indicated that the probation officer had been told by
Trammell-Crow that if a settlement agreement was not reached, a
civil suit would be filed against that bank and others in which
Trammell-Crow had accounts against which Trammell-Crow checks and
other items forged by Schinnell had been debited. Therefore, the
PSR concluded that Schinnell’s actions had affected a financial
institution.
Schinnell’s argument is essentially that the threat of suit
against a financial institution based upon a fraud perpetrated upon
one of its customers is simply not the type of effect on the
institution contemplated by the guidelines. Unfortunately, there
is scant authority among the courts of appeal construing this
“(6) If the offense --
(A) substantially jeopardized the safety
and soundness of a financial
institution; or
(B) affected a financial institution and
the defendant derived more than
$1,000,000 in gross receipts from
the offense,
increase by 4 levels. If the resulting
offense level is less than level 24, increase
to level 24.” U.S.S.G. § 2F1.1(b)(6)(A),(B).
12
provision, and what little there is does not prove to be of any
assistance in the present case. However, given the evidence of
Schinnell’s extensive and prolonged fraud involving forged
signatures, fraudulent endorsements and wire transfers, all
presented, and intended to be presented, to the banks for the
advancement of funds thereon and concomitant debiting of their
customer’s accounts, direct harm to the banks involved was
certainly reasonably foreseeable. The existence of the tolling
agreement further demonstrates that the banks are realistically
exposed to substantial potential liability as the result of
Schinnell’s fraud. As Schinnell does not contest that the gross
receipts of her fraud exceeded $1 million, we find no error in the
application of the enhancement to her sentence.
B. Restitution
Schinnell asserts that the district court’s restitution award
was erroneous in three respects: (1) the restitution award
includes compensation for consequential damages not properly
recoverable under the Victim and Witness Protection Act (VWPA), 18
U.S.C. §§ 3663-64; (2) the district court failed to make adequate
findings regarding Schinnell’s ability to pay; and (3) the amount
of restitution ordered was an abuse of discretion as the district
court failed to consider Schinnell’s ability to pay.
In reviewing an order of restitution, if the restitution was
imposed in violation of the VWPA, it is illegal, and the proper
standard of review is de novo; otherwise an order of restitution is
reviewable only for abuse of discretion, and will be reversed only
13
if the defendant demonstrates that it is probable that the district
court failed to consider one of the mandatory factors and the
failure to consider that factor influenced the court. United
States v. Reese, 998 F.2d 1275, 1282 (5th Cir. 1993).
We must agree with Schinnell that the district court erred in
including $344,760.93 in expenses incurred by Trammell Crow for, as
stated in the PSR, “accounting fees and cost to reconstruct the
bank statements for the time period that the defendant perpetuated
this scheme, temporary employees hired by the company to
reconstruct the monthly bank statements, and cost incurred by the
company [in borrowing funds] to replace the stolen funds.” Section
3663(b)(1) of the VWPA limits restitution to either the return of
the property, or if that is inadequate, to the value of the
property when stolen less the value of the property when returned.
United States v. Mitchell, 876 F.2d 1178, 1184 (5th Cir. 1989); see
also United States v. Barany, 884 F.2d 1255, 1260 (9th Cir. 1989),
cert. denied, 110 S.Ct. 755 (1990). Therefore, the VWPA provides
no authority for restitution of consequential damages involved in
determining the amount of the loss or in recovering those funds.
See Mitchell, 876 F.2d at 1184(no restitution of “cost of restoring
property to its pre-theft condition, or cost of employing counsel
to recover from an insurance company”); United States v. Arvanitis,
902 F.2d 489, 497 (7th Cir. 1990) (attorneys’ fees spent
investigating fraudulent claim); Government of the Virgin Islands
v. Davis, 43 F.3d 41, 44-46 (3d Cir. 1994) (attorneys’ fees
generated to recover or protect property), cert. denied, 115 S.Ct.
142280 (1995); United States v. Diamond, 969 F.2d 961, 968 (10th Cir.
1992) (attorneys’ fees and expenses in liquidating company); United
States v. Mullins, 971 F.2d 1138, 1147 (4th Cir. 1992) (attorneys’
fees and investigators to recover property). The district court
erred in including the $344,760.93 in Trammell-Crow costs and
expenses.
Schinnell’s remaining arguments are closely related to one
another, as she maintains both that the district court failed to
make adequate findings on the record to support its restitution
order and that the award itself was an abuse of discretion. When
the district court orders full restitution, it is only necessary to
assign specific reasons for doing so where the record itself is
inadequate to allow us to properly review the restitution award on
appeal. United States v. Patterson, 837 F.2d 182, 187 (5th Cir.
1988); Mitchell, 876 F.2d at 1183 (quoting Patterson). We find
that the record before us, which includes both the PSR and the
transcript of the sentencing hearing, is sufficient to allow us to
properly conduct our review.
Schinnell bases her argument that the district court failed to
consider her ability to make restitution primarily on the court’s
statement at the sentencing hearing that, “I recognize as a
practical matter . . . that a million and a half dollars is a lot
of restitution to expect from Ms. Schinnell at least over any short
term from now . . . .” In addition, Schinnell points to the PSR’s
finding that Schinnell had a negative net worth of nearly $1
million and a negative monthly cash flow of $201 per month as
15
further evidence of her inability to make restitution to Trammell-
Crow.
Section 3664 of the VWPA provides:
“[t]he court, in determining whether to order restitution
under section 3663 of this title and the amount of such
restitution, shall consider the amount of the loss
sustained by any victim as a result of the offense, the
financial resources of the defendant, the financial needs
and earning ability of the defendant and the defendant’s
dependents, and such other factors as the court deems
appropriate.”
Our review of the record persuades us that the district court
satisfied its statutory mandate.
While the district court did recognize that it was unlikely
that Schinnell possessed the ability to pay such a large amount
over the “short term,” it expressly made concessions to the
defendant’s financial situation in tailoring the order of
restitution:
“I recognize as a practical matter the difficulty Ms.
Schinnell may have in paying that amount in a lump sum,
and so to better accommodate her financial circumstances,
I will give her the option of paying that restitution in
monthly installments provided that each installment is at
least four hundred dollars and the installments be made
at least monthly, the first installment to be due thirty
days from the day that Ms. Schinnell is released from
custody.”
In addition, the sentencing guidelines provided for a fine in the
range of ten thousand to one hundred thousand dollars which the
district court declined to impose “since I do not think Ms.
Schinnell has the capability of paying both a fine and restitution,
and I think it’s more than important that her resources be devoted
to restitution so I’m not going to order any fine.” These remarks
suggest that far from ignoring one of the mandatory factors set
16
forth in section 3664, the district court structured its order so
as to enhance Schinnell’s ability to comply with its terms.
Nor does Schinnell’s current financial situation prevent the
assessment of restitution as a “defendant’s indigency at the time
restitution is ordered is not a bar to the requirement of
restitution.” United States v. Ryan, 874 F.2d 1052, 1054 (5th Cir.
1989). The fact that Schinnell had operated her own business as
well as the duration and extent of the fraud perpetrated against
Trammell-Crow are indicative of her considerable financial acumen.
Furthermore, Schinnell’s current negative net worth is largely the
result of a civil judgment obtained against her by Trammell-Crow
for her fraud, and the district court explicitly stated that the
restitution order was not intended to permit double recovery for
those losses compensated by collection on the civil judgment.
Therefore, the district court did not abuse its discretion in
ordering Schinnell to pay substantial restitution.
Accordingly, Schinnell’s conviction is AFFIRMED, her sentence
is VACATED and the cause is REMANDED for resentencing consistent
with this opinion.
DENNIS, Circuit Judge, specially concurring:
I concur in the majority’s opinion in all respects except for its reliance upon United
States v. Arreola-Ramos, 60 F.3d 188 (5th Cir. 1995), for the proposition that an
administrative “summary forfeiture, by definition, can never serve as a jeopardy component
of a double jeopardy motion [because in such proceedings] no one is punished.” Id. at 192
17
(emphasis original). Arreola-Ramos is considered precedential in our circuit for the point
relied upon by the majority, but I believe that in this respect it conflicts with the Supreme
Court’s decisions in Montana Department of Revenue v. Kurth Ranch, ___U.S. ___, 114
S.Ct. 2801, 125 L.Ed.2d 488 (1944); Austin v. United States, ___U.S.___, 113 S.Ct. 2801,
125 L.Ed.2d 488 (1993); and United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104
L.Ed.2d 487 (1987), and should be reconsidered as to that issue by this court en banc.
In Arreola-Ramos, the Government seized money during a search of the
defendant's home in connection with its investigation of suspected drug activity. While
Arreola-Ramos was incarcerated following his arrest on charges stemming from the same
activity, the Government, in accordance with federal forfeiture provisions, published notice
of its intention to forfeit the property. Arreola-Ramos did not enter an appearance or
contest the forfeiture, and the property was consequently forfeited summarily, with title
vesting in the Government. Subsequently, Arreola-Ramos filed a motion to dismiss the
criminal case pending against him, arguing that the prosecution for the same offense
giving rise to the forfeiture placed him in jeopardy a second time, in violation of the Fifth
Amendment's double jeopardy clause. Although acknowledging that the double jeopardy
clause protects against multiple punishments, as well as multiple prosecutions, id. at 191-
92, the court rejected the defendant's contention, holding that an administrative forfeiture,
"by definition, can never serve as a jeopardy component of a double jeopardy motion. In
summary forfeiture proceedings, there is no trial, there are no parties, and no one is
punished." Id. at 192 (emphasis original).9
The Arreola-Ramos court also adverted to Serfass v. United States, 420 U.S. 377, 95 S. Ct.
1055, 43 L.Ed.2d 265 (1975), for the proposition that jeopardy cannot attach "until a defendant
is 'put to trial before the trier of facts, whether the trier be a judge or jury.'") Arreola-Ramos, 60
F.3d at 192 n. 22 (quoting Serfass, 420 U.S. at 388, 95 S. Ct. at 1063). Serfass, however, was
a case implicating the double jeopardy prohibition against multiple prosecutions and does not
stand for the proposition that all double jeopardy claims are predicated on multiple proceedings.
See United States v. Baird, 63 F.3d 1213, 1225 (3rd Cir. 1995)(Sarokin, J., dissenting); United
States v. Brophil, 899 F. Supp. 1257, 1261-62 (D.Vt. 1995), overruled sub silentio by United States
v. Idowu, 74 F.3d 387 (2nd Cir. 1996).
18
The panel opinion characterized the defendant's argument as "a transparent bit of
legal alchemy, [that] attempts to transmute the 'lead' of a civil forfeiture proceeding -- in
which [defendant] was not even a party -- into the 'gold of former jeopardy.'" Id. at 190.
Examination of the Arreola-Ramos gloss on civil forfeiture, however, reveals the opinion
itself to be spun with threads of judicial straw rather than even Rumpelstiltskin's gold. The
opinion is predicated on what the panel acknowledged was a "legal fiction": That property
that is unclaimed in an administrative forfeiture is "unowned" and consequently its
forfeiture cannot be "punishment." See id. at 192.
Recent United States Supreme Court opinions, and this circuit's decisions
interpreting them, clearly establish that the forfeiture of a person's lawfully owned property,
because of that person's illegal activity, may constitute "punishment" for double jeopardy
purposes. See Austin v. United States, U.S. , 113 S. Ct. 2801, 125 L.Ed.2d 488(1993)(forfeiture of property under 21 U.S.C. §§ 881(a)(4) and 881(a)(7) per se constitutes
punishment for purposes of Eighth Amendment excessive fines analysis); United States
v. Halper, 490 U.S. 435, 109 S. Ct. 1892, 104 L.Ed.2d 487 (1989)(civil penalty may be
punishment for purposes of double jeopardy analysis); United States v. Perez, 70 F.3d 345(5th Cir. 1995)(Austin's reliance on Halper demonstrates that forfeitures under 21 U.S.C.
§§ 881(a)(4) and 881(a)(7) are punishment per se under either double jeopardy or
excessive fines analysis); see also Montana Department of Revenue v. Kurth Ranch,
U.S. , 114 S. Ct. 2801, 125 L.Ed.2d 488 (1994)(holding that Montana's tax on the
possession of illegal drugs constituted punishment for purposes of the double jeopardy
clause). The proper question presented by an administrative forfeiture double jeopardy
claim, therefore, is not whether the defendant claimed ownership at the appropriate time,
but whether the defendant actually had a legal property interest in the forfeited items, and
consequently was punished as a result of the property's forfeiture. See United States v.
Baird, 63 F.3d 1213, 1224 (3rd Cir. 1995)(Sarokin, J., dissenting)("The issue should be
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whether defendant was the owner, not whether he filed a proper and timely claim of
ownership in the forfeiture proceeding. He is punished if his property is forfeited,
irrespective of whether or not he participated."); see also Gainer v. United States, 904
F.Supp. 1234, 1237 (D.Kan. 1995)("The character of the act of forfeiture is without
question punishment whether or not a defendant appears as part of the proceeding. This
is especially true when there is no doubt about the owner of the property seized."); United
States v. Brophil, 899 F.Supp. 1257, 1262 (D.Vt. 1995)(a forfeiture proceeding "subject[s]
the property owner to the hazards of forfeiture, regardless of whether or not he appeared
as a party. Because the Supreme Court has held that such civil forfeiture proceedings do
constitute punishment . . . the protections of the Double Jeopardy Clause should apply to
one like Brophil whose property the Government has seized in that manner."), overruled
sub silentio by United States v. Idowu, 74 F.3d 387 (2nd Cir. 1996). There are valid
reasons a defendant may fail to inject him or herself into administrative forfeiture
proceedings, from lack of money to obtain assistance of counsel or post a bond to fear of
jeopardizing trial rights. See, e.g., Baird, 63 F.3d at 1224 (Sarokin, J., dissenting)("A
defendant may choose not to participate because the allegations are true, or for fear that
a claim of ownership could be utilized against him in the criminal proceeding."). A
defendant's decision to refrain from contesting forfeiture proceedings should not serve as
the basis for manufacturing the fiction that property belonging to the defendant is
ownerless.
In concluding that a defendant who has failed to assert his ownership interest by
timely contesting an administrative forfeiture has never been in jeopardy, the Arreola-
Ramos panel followed the Seventh Circuit's lead in United States v. Torres, 28 F.3d 1463(7th Cir. 1994), a decision that glibly concluded jeopardy did not attach where the
defendant never became a party to an administrative forfeiture proceeding due to his
failure to contest the forfeiture: "As a non-party, Torres was not at risk in the forfeiture
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proceeding, and '[w]ithout the risk of a determination of guilt, jeopardy does not attach, and
neither an appeal nor further prosecution constitutes double jeopardy.'" Torres, 28 F.3d
at 1465 (quoting Serfass v. United States, 420 U.S. 377, 891-92, 95 S. Ct. 1055, 1064, 43
L.Ed.2d 265 (1975)). I recognize that the other circuit courts of appeal to address this
issue have done the same, seizing the glittering opportunity presented by Torres to evade
a difficult constitutional issue. See, e.g., United States v. German, 76 F.3d 315 (10th Cir.
1996); United States v. Cretacci, 62 F.3d 307 (9th Cir. 1995); United States v. Idowu, 74
F.3d 387 (2nd Cir. 1995); United States v. Baird, 63 F.3d 1213 (3rd Cir. 1995). The
superficial appeal of an erroneous decision, however, does not transmute its hollow
essence into a rationale based on reality or common sense. The Torres line of cases flies
in the face of both reason and Supreme Court precedent, see Baird, 63 F.3d at 1225(Sarokin, J., dissenting); Gainer, 904 F.Supp. at 1237, Brophil, 899 F.Supp. at 1261-66,
and this circuit's reliance on the Torres approach should receive closer scrutiny and more
careful consideration in light of those Supreme Court decisions.
In this case, however, the district court properly found that the forfeiture of the
proceeds of Schinnell's fraudulent activities was not punishment requiring dismissal of her
criminal prosecution under the double jeopardy clause. Schinnell's property was forfeited
under a statute that applied only to property constituting or derived from proceeds. See
18 U.S.C. § 1343. As the majority discusses as additional grounds for rejecting Schinnell's
double jeopardy claim, the forfeiture of proceeds is not punishment, see United States v.
Tilley, 18 F.3d 295 (5th Cir. 1994), and, to the extent that property rightfully belong to
Schinnell was improperly forfeited under § 1343, her recourse was to seek to have the
forfeiture set aside. See slip op. at 9-11.
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