United States v. Samuel Davis

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA , No. 11-10584
Plaintiff-Appellee,
D.C. No.
v. 2:09-cr-00078-
JCM-RJJ-1
SAMUEL DAVIS,
Defendant-Appellant. OPINION
Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding
Argued and Submitted
September 11, 2012—San Francisco, California
Filed February 1, 2013
Before: J. Clifford Wallace, Sidney R. Thomas, and
Marsha S. Berzon, Circuit Judges.
Opinion by Judge Wallace;
Concurrence by Judge Berzon
2 UNITED STATES V . DAVIS
SUMMARY*
Criminal Law
The panel affirmed the district court’s order requiring the
defendant, who was convicted of conspiracy and money
laundering, to forfeit $1.29 million and to pay about $95,000
in restitution to the FBI for funds expended in the operation
that led to the defendant’s arrest.
The panel rejected the defendant’s argument that the
forfeiture amount should be offset by his restitution amount
to avoid a double recovery by the government. The panel
held that even if the same government entity will receive both
forfeiture and restitution, there is no double recovery because
the two payments represent different types of funds: punitive
and compensatory.
Concurring, Judge Berzon (joined by Judge Thomas)
wrote separately to note the narrowness of the holding. She
wrote that the panel can leave for another day the unraised
question whether a defendant who essentially is paid a
commission on other people’s money he handles as part of an
illegal scheme can be made to “forfeit” funds that passed
through his hands but were never his.
*
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 . DAVIS 3
COUNSEL
Todd M. Leventhal (argued), Leventhal and Associates,
PLLC, Las Vegas, Nevada, for Defendant-Appellant.
Robert L. Ellman, Daniel D. Hollingsworth (argued),
Assistant United States Attorneys, Las Vegas, Nevada, for
Plaintiff-Appellee.
OPINION
WALLACE, Senior Circuit Judge:
Davis appeals from the portion of his sentence that
imposes forfeiture and restitution. Davis pleaded guilty to one
count of conspiracy to commit money laundering and thirty
counts of money laundering under 18 U.S.C. § 1956(h) and
aiding and abetting under 18 U.S.C. § 1956(a)(3)(A). He was
ordered to forfeit $1.29 million and also to pay about $95,000
in restitution to the Federal Bureau of Investigation (FBI) for
funds expended in the operation that led to his arrest. On
appeal, he argues that requiring him to pay both restitution
and forfeiture will result in an impermissible double recovery
for the government. He therefore requests that his forfeiture
amount be offset by his restitution amount. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm.
I.
Undercover FBI agents asked Davis to help them launder
money, which they represented was stolen from Wachovia
Bank. Davis received the money and engaged in various
financial transactions intended to conceal the nature and
4 UNITED STATES V . DAVIS
source of the “stolen money.” He took a percentage of the
funds as compensation. After working alone for several
months, he enlisted the aid of his co-defendant, Shawn Rice.
By the time of the filing of the Indictment, agents had
provided Davis and Rice with a total of $1,293,782. Davis
had taken $73,782 for his work, and Davis and Rice had
transferred $1,198,000 back to the agents.
The government sought a criminal in personam forfeiture
judgment of $1,290,000 against Davis pursuant to 18 U.S.C.
§ 981, 28 U.S.C. § 2641, and 18 U.S.C. § 982. The district
court initially denied the in personam amount, but did order
forfeiture of $2,597.50 seized from two bank accounts in
Davis’s name. Davis was also ordered to pay $95,782 in
restitution to the FBI. After we decided United States v.
Newman, 659 F.3d 1235 (9th Cir. 2011), which held that a
district judge does not have discretion to reduce or eliminate
a criminal forfeiture unless required by statute or the
Constitution, id. at 1240, the government filed a Rule 35
motion requesting amendment to the forfeiture judgment. On
the same day the motion was filed, the district court revised
its forfeiture order to include the requested in personam
judgment.
II.
Davis’s only argument on appeal is that his forfeiture
amount should be offset by his restitution amount to avoid a
double recovery by the government. We observe at the outset
that the parties disagree over whether we should apply a de
novo or plain error standard of review to this claim. However,
we need not decide which position is correct because we
would affirm under either standard, as explained below. See
UNITED STATES V . DAVIS 5
United States v. Upshaw, 226 F.3d 1101, 1102 (9th Cir. 2000)
(“Given the basis for our resolution of this appeal, we need
not decide what standard of review applies. Under either
standard, we affirm the district court”).
III.
Davis argues that, because the FBI is essentially a part of
the Department of Justice (DOJ), the two entities are
functionally the same. Thus, he argues, requiring him to pay
forfeiture to the DOJ and restitution to the FBI will result in
an impermissible double recovery for the government. Davis
has not raised the issue of whether the FBI is properly a
“victim” under the restitution statute, and we therefore do not
consider that question. See United States v. Salcedo-Lopez,
907 F.2d 97, 98 (9th Cir. 1990).
As we recognized in Newman, forfeiture and restitution
serve different purposes or goals. 659 F.3d at 1241. Forfeiture
is imposed as punishment for a crime; restitution makes the
victim whole again. Id. We agreed with the Court of Appeals
for the Tenth Circuit that “‘[c]riminal forfeiture and
restitution are separate remedies with different purposes.’” Id.(quoting United States v. McGinty, 610 F.3d 1242, 1247 (10th
Cir. 2010)). Thus, we stated that requiring a defendant to pay
both forfeiture and restitution would not, on its own, result in
double recovery. However, because the victims of the crimes
in that case were private financial institutions, we did not
address the issue of whether payment of both forfeiture and
restitution to the government created an impermissible double
recovery. Id. at 1242 n.6. We now address that question.
Other circuits have considered whether an offset is
warranted to avoid double recovery when government entities
6 UNITED STATES V . DAVIS
will receive both forfeiture and restitution. See United States
v. Taylor, 582 F.3d 558 (5th Cir. 2009); United States v. Ruff,
420 F.3d 772 (8th Cir. 2005); United States v. Emerson, 128
F.3d 557 (7th Cir. 1997). Those courts have focused their
analysis on whether the two government recipients were
“distinct entities” in order to determine whether a double
recovery would occur. See Taylor, 582 F.3d at 566(considering whether the Federal Emergency Management
Agency and the DOJ are distinct); Ruff, 420 F.3d at 775–76
(considering whether a state narcotics task force and the state
narcotics division are distinct); Emerson, 128 F.3d at 567–68
(considering whether the United States Postal Service and the
DOJ are distinct). These cases hold or imply that if two
entities are related closely enough, restitution or forfeiture
should be reduced. We disagree with this approach.
Even if the same government entity will receive both
forfeiture and restitution, there simply is no double recovery.
The two payments represent different types of funds: punitive
and compensatory. They are different in nature, kind, and
purpose. Money levied as a punitive fine does not “double”
the money intended to compensate a loss anymore than the
addition of apples to one’s store doubles the orange stock.
Nor is the collection of forfeiture and restitution based on the
same crime an impermissible doubling insofar as a defendant
is concerned. Newman, 659 F.3d at 1241. It is therefore
irrelevant to what extent the FBI and the DOJ are distinct
entities, and the district court did not clearly err when it did
not offset Davis’s forfeiture amount.
Our conclusion finds further support in the statutes
governing restitution and forfeiture. As Newman held,
forfeiture is mandatory under 18 U.S.C. § 982 and 18 U.S.C.
§ 2461(c). 659 F.3d at 1240. The statutory scheme, which
UNITED STATES V . DAVIS 7
recognizes that the government can be a “victim” for
purposes of restitution, 18 U.S.C. § 3664(i), expressly allows
offsets against forfeiture or restitution in some situations. For
example, 18 U.S.C. § 981(a)(2)(C) provides: “In cases
involving fraud in the process of obtaining a loan or extension
of credit, the court shall allow the claimant a deduction from
the forfeiture to the extent that the loan was repaid, or the
debt was satisfied, without any financial loss to the victim.”
Likewise, under 18 U.S.C. § 3664(j)(2), any amount the
victim of a crime receives from a restitution order will be
reduced by “any amount later recovered as compensatory
damages for the same loss by the victim.” However, there is
no provision that authorizes an offset solely because the
government will receive both restitution and forfeiture.
Because Congress clearly knew how to provide for offset in
other situations, we conclude it did not intend it here.
We therefore hold that Davis was not entitled to an offset,
regardless of the relationship between the forfeiture and
restitution recipients. The district court committed no error,
plain or otherwise.
AFFIRMED.
BERZON, Circuit Judge, with whom THOMAS, Circuit
Judge, joins, concurring:
I concur in the court’s opinion. I write separately to note
the narrowness of our holding.
8 UNITED STATES V . DAVIS
The purpose of criminal forfeiture is to force guilty
defendants to “disgorge their ill-gotten gains.” United States
v. Newman, 659 F.3d 1235, 1243 (9th Cir. 2011) (internal
quotation marks omitted). To that end, Congress has
articulated a broad conception of what “gains” may be subject
to a court’s forfeiture order. See, e.g., 21 U.S.C. § 853(a)
(defining “[p]roperty subject to criminal forfeiture” as “(1)
any property constituting, or derived from, any proceeds the
person obtained, directly or indirectly, as the result of such
violation,” or “(2) any of the person’s property used, or
intended to be used, in any manner or part, to commit, or to
facilitate the commission of, such violation.”); 18 U.S.C.
§ 981(a)(1) (defining property “subject to forfeiture” to
include “[a]ny property . . . involved in a transaction or
attempted transaction in violation of section 1956 . . . or any
property traceable to such property,” and “ [a]ny property . . .
which constitutes or is derived from proceeds traceable to
[such offense]”); id. § 982(a)(1) (requiring courts to order
persons convicted of money laundering under 18 U.S.C.
§ 1956 to “forfeit to the United States any property, real or
personal, involved in such offense, or any property traceable
to such property”).
In interpreting those statutes, we have similarly expressed
an expansive view of forfeitable property. See, e.g., Newman,
659 F.3d at 1243 (“‘Requiring imposition of a money
judgment on a defendant who currently possesses no assets
furthers the remedial purposes of the forfeiture statute by
ensuring that all eligible criminal defendants receive the
mandatory forfeiture sanction Congress intended and
disgorge their ill-gotten gains, even those already spent.’”)
UNITED STATES V . DAVIS 9
(quoting United States v. Casey, 444 F.3d 1071, 1074 (9th
Cir. 2006)).
Notwithstanding our broad understanding of what
property courts may order to be forfeited, fundamentally,
forfeiture is about losing or giving up that property. See
Webster’s Collegiate Dictionary 491 (11th ed. 2003)
(defining “forfeiture” as “the loss of property or money”);
Black’s Law Dictionary (defining “forfeiture” as “divestiture
of property without compensation”). And, it would seem
axiomatic that one must gain or possess property before one
can lose it. Put simply, by definition one cannot “forfeit” that
which he never had in the first place.
Here, the district court ordered Davis to forfeit
$1,290,000. This amount represented nearly the total amount
of money Davis and Rice laundered for undercover FBI
agents between March 2008 and March 2009. It is
undisputed that Davis kept for himself as commission only
$73,782 of the approximately $1.29 million in laundered
funds. Davis has not challenged the district court’s order on
the grounds that forfeiture of the full $1.29 million was
improper because he only took a percentage of that amount as
compensation.
Our opinion (correctly) does not address that issue; we
hold only that Davis was not entitled to an offset of his
forfeiture amount. I am somewhat dubious that the $1.29
million of other people’s money that Davis laundered is an
appropriate measure of the amount that could be forfeited.
But as the issue has not been raised, we can leave to another
day the question whether a defendant who essentially is paid
10 UNITED STATES V . DAVIS
a commission on other people’s money he handles as part of
an illegal scheme can be made to “forfeit” funds that passed
through his hands but, it appears, were never his.