United States v. Parthava Nejad

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-30082
Plaintiff-Appellee,
D.C. No.
v. 6:15-cr-00304-AA-1
PARTHAVA BEHESHT NEJAD,
Defendant-Appellant. OPINION
Appeal from the United States District Court
for the District of Oregon
Ann L. Aiken, District Judge, Presiding
Argued and Submitted May 16, 2019
Portland, Oregon
Filed August 13, 2019
Before: N. Randy Smith, Paul J. Watford,
and Ryan D. Nelson, Circuit Judges.
Opinion by Judge Watford
2 UNITED STATES V. NEJAD
SUMMARY *
Criminal Law
The panel affirmed the district court’s entry of a
“personal money judgment” against Parthava Behest Nejad
in an amount that corresponds to the proceeds of the offenses
for which Nejad was convicted: fraudulently obtaining
Social Security, Medicaid, and food-stamp benefits to which
he was not entitled.
Nejad argued that none of the criminal forfeiture statutes
at issue authorizes entry of a “personal money judgment”
against him, and that when Congress has authorized entry of
a personal money judgment in the criminal forfeiture
context, it has done so explicitly. Nejad argued that the
series of decisions in which this court has held that personal
money judgments are permissible should be overruled
because they conflict with the Supreme Court’s subsequent
decision in Honeycutt v. United States, 137 S. Ct. 1626
(2017). The panel wrote that it is not free as a three-judge
panel to overrule those decisions because they are not clearly
irreconcilable with the reasoning or holding of Honeycutt,
which did not address whether personal money judgments
are permissible in the criminal forfeiture context.
The panel explained that Honeycutt does require
clarification that personal money judgments must be
enforced within the constraints imposed by the applicable
criminal forfeiture statutes. When the substitute-property
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. NEJAD 3
provision in 21 U.S.C. § 853(p) applies, once the
government identifies untainted property it believes may be
used to satisfy a personal money judgment, the government
must return to the district court and establish that the
statute’s requirements have been met. If the court concludes
that those requirements have been satisfied, the court may
then amend the forfeiture order to include the newly
identified substitute property, at which point the government
may satisfy a personal money judgment from the defendant’s
untainted assets.
COUNSEL
Lisa C. Hay (argued), Federal Public Defender; Bryan E.
Lessley, Assistant Federal Public Defender; Office of the
Federal Public Defender, Portland, Oregon; for Defendant-
Appellant.
Julia E. Jarrett (argued), Assistant United States Attorney;
Kelly A. Zusman, Appellate Chief; Billy J. Williams, United
States Attorney; United States Attorney’s Office, Portland,
Oregon; for Plaintiff-Appellee.
4 UNITED STATES V. NEJAD
OPINION
WATFORD, Circuit Judge:
A jury found Parthava Behesht Nejad guilty of
fraudulently obtaining Social Security, Medicaid, and food-
stamp benefits to which he was not entitled, in violation of
18 U.S.C. §§ 641 and 1343. Congress has authorized
forfeiture of property as a sanction for those offenses, see
28 U.S.C. § 2461(c); 18 U.S.C. §§ 981(a)(1)(C), 1956(c)(7),
1961(1), and here the indictment sought forfeiture of “any
property, real or personal, which constitutes or is derived
from proceeds traceable to the violations.” At sentencing,
the district court ordered Nejad to forfeit $154,694.50, the
sum representing the proceeds of his offenses.
This appeal involves an aspect of the district court’s
forfeiture order that requires a brief explanation. Section
2461(c) directs the court to order forfeiture of “the property”
specified in the indictment’s forfeiture allegation, assuming
the allegation has been proved. In this case, the property
eligible for forfeiture is any property “which constitutes or
is derived from proceeds traceable to” Nejad’s offenses.
18 U.S.C. § 981(a)(1)(C). The proceeds of Nejad’s offenses
consisted of the $154,694.50 in fraudulently obtained
government funds he received. At the time of his conviction,
Nejad no longer had the money in his possession, and the
record does not disclose whether the government tried to
trace the money to other property “derived from” the
proceeds of Nejad’s offenses. In any event, rather than
request forfeiture of specific property, the government asked
the district court to enter what Rule 32.2 of the Federal Rules
of Criminal Procedure refers to as a “personal money
judgment” against Nejad in the amount of $154,694.50. See
Fed. R. Crim. Proc. 32.2(b)(1)(A). The court did so, over
Nejad’s objection.
UNITED STATES V. NEJAD 5
On appeal, Nejad argues that none of the criminal
forfeiture statutes at issue here authorizes entry of a
“personal money judgment” against him. Those statutes, he
asserts, authorize only the forfeiture of a defendant’s
“property,” without saying anything about permitting entry
of an in personam money judgment as an alternative. See 28
U.S.C. § 2461(c); 18 U.S.C. § 981(a)(1)(C). He further
contends that when Congress has authorized entry of a
personal money judgment in the criminal forfeiture context,
it has done so explicitly, as in 31 U.S.C. § 5332(b)(4). That
provision, which authorizes forfeiture in connection with
certain cash-smuggling offenses, provides for entry of a
“personal money judgment” when the property subject to
forfeiture is unavailable and the defendant lacks sufficient
substitute property that may be forfeited under 21 U.S.C.
§ 853(p), an important forfeiture provision to which we will
return in a moment. 1
Although some district courts have found Nejad’s
argument meritorious, see, e.g., United States v. Surgent, No.
04-CR-364, 2009 WL 2525137, at *6–8 (E.D.N.Y. Aug. 17,
2009); United States v. Day, 416 F. Supp. 2d 79, 89–91
(D.D.C. 2006), rev’d, 524 F.3d 1361, 1377–78 (D.C. Cir.
2008), we have held in a series of cases that personal money
judgments are permissible. See United States v. Lo, 839 F.3d
777, 792–94 (9th Cir. 2016); United States v. Newman,
659 F.3d 1235, 1242 (9th Cir. 2011); United States v. Casey,
444 F.3d 1071, 1077 (9th Cir. 2006). Nejad asks us to
1
Section 5332(b)(4) provides: “If the property subject to forfeiture
under paragraph (2) is unavailable, and the defendant has insufficient
substitute property that may be forfeited pursuant to [21 U.S.C.
§ 853(p)], the court shall enter a personal money judgment against the
defendant for the amount that would be subject to forfeiture.” 31 U.S.C.
§ 5332(b)(4).
6 UNITED STATES V. NEJAD
overrule those cases on the ground that they conflict with the
Supreme Court’s subsequent decision in Honeycutt v. United
States, 137 S. Ct. 1626 (2017).
In Honeycutt, the Court held that 21 U.S.C. § 853 does
not authorize courts to impose joint and several liability for
forfeiture judgments. 137 S. Ct. at 1630. That holding does
not address whether personal money judgments are
permissible in the criminal forfeiture context. Nejad argues
that the Court’s reasoning in Honeycutt nonetheless
undermines our prior precedent because the Court
emphasized the absence of any textual basis in § 853 for
imposing joint and several liability. The criminal forfeiture
statutes at issue here, Nejad correctly notes, similarly lack
any textual basis for imposing a personal money judgment.
We are not free as a three-judge panel to overrule Casey,
Newman, and Lo because those decisions are not “clearly
irreconcilable” with the reasoning or holding of Honeycutt.
See Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en
banc). Contrary to Nejad’s argument, the Court in
Honeycutt did not rely solely, or even predominantly, on the
absence of an express textual basis for imposing joint and
several liability. The Court instead relied on the fact that
permitting a defendant to be held jointly and severally liable
for the forfeiture of property he never acquired or used
would conflict with several provisions of § 853. 137 S. Ct.
at 1632–34. Nejad cannot point to any similar conflict
between allowing district courts to impose personal money
judgments and the text of the criminal forfeiture statutes at
issue in this case.
In the absence of such a conflict, our rationale for
allowing district courts to impose personal money judgments
remains undisturbed by the reasoning of Honeycutt. We
have regarded such judgments as necessary to avoid
UNITED STATES V. NEJAD 7
undermining Congress’ objectives in enacting mandatory
forfeiture sanctions, pointing in particular to the substitute-
property provision found in 21 U.S.C. § 853(p). See Casey,
444 F.3d at 1074. 2 Section 853(p) states that if the tainted
property subject to forfeiture is unavailable due to certain
acts or omissions of the defendant, the court must order the
forfeiture of “any other property of the defendant”—
including untainted assets—up to the value of the directly
forfeitable property. 21 U.S.C. § 853(p)(2). 3
2
Section 853(p) is one of the provisions incorporated by reference
in 28 U.S.C. § 2461(c). United States v. Valdez, 911 F.3d 960, 966 (9th
Cir. 2018).
3
Section 853(p) provides in relevant part:
(p) Forfeiture of substitute property
(1) In general
Paragraph (2) of this subsection shall apply,
if any property described in subsection (a), as a
result of any act or omission of the defendant—
(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.
8 UNITED STATES V. NEJAD
Section 853(p) does not limit the substitute property
eligible for forfeiture to property that the defendant owns at
the time of sentencing. We have accordingly held that a
court may order forfeiture in the form of a personal money
judgment against the defendant, and that the government
may attempt to satisfy the judgment with any substitute
property it locates in the future. Newman, 659 F.3d at 1242;
Casey, 444 F.3d at 1074. A contrary rule, we have reasoned,
would allow an insolvent defendant to escape the mandatory
forfeiture penalty Congress has imposed simply by spending
or otherwise disposing of his criminal proceeds before
sentencing. Newman, 659 F.3d at 1243; Casey, 444 F.3d at
1074.
In short, we see nothing in Honeycutt (or any other recent
Supreme Court decision) that would allow us to overrule our
prior precedent permitting entry of a personal money
judgment in the circumstances present here. At least two
other circuits have reached the same conclusion when asked,
post-Honeycutt, to reconsider their own precedent
authorizing personal money judgments. See United States v.
Elbeblawy, 899 F.3d 925, 940–41 (11th Cir. 2018); United
States v. Gorski, 880 F.3d 27, 40–41 (1st Cir. 2018).
The Supreme Court’s decision in Honeycutt does,
however, require one clarification concerning the manner in
which personal money judgments may be enforced. In the
(2) Substitute property
In any case described in any of
subparagraphs (A) through (E) of paragraph (1),
the court shall order the forfeiture of any other
property of the defendant, up to the value of any
property described in subparagraphs (A) through
(E) of paragraph (1), as applicable.
UNITED STATES V. NEJAD 9
wake of Honeycutt, it is clear that personal money judgments
must be enforced within the constraints imposed by the
applicable criminal forfeiture statutes. The most notable
constraint is the one imposed by the substitute-property
provision of § 853(p), discussed above. As the government
has conceded, both in this case and elsewhere, see Brief for
the United States in Opposition at 16–18, Lo v. United
States, 138 S. Ct. 354 (2017) (No. 16-8327), when § 853(p)
applies, the government may not enforce a personal money
judgment through the same means it would use to enforce an
ordinary in personam civil judgment. Instead, once the
government identifies untainted property that it believes may
be used to satisfy a personal money judgment, it must return
to the district court and establish that the requirements of
§ 853(p) have been met. See United States v. Vampire
Nation, 451 F.3d 189, 202 (3d Cir. 2006). If the court
concludes that those requirements have been satisfied, the
court may then amend the forfeiture order to include the
newly identified substitute property. See Fed. R. Crim. Proc.
32.2(e); Stefan D. Cassella, Asset Forfeiture Law in the
United States § 22-2, at 762–63 (2d ed. 2013). Only when
these procedures are followed may the government satisfy a
personal money judgment from the defendant’s untainted
assets. That limitation stems from the Court’s observation
in Honeycutt that “Congress provided just one way for the
Government to recoup substitute property when the tainted
property itself is unavailable—the procedures outlined in
§ 853(p).” 137 S. Ct. at 1634.
AFFIRMED.