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All expressions are those of the speaker. Hello, and welcome to SCO Discust.
I'm your host, Kyle hammernis On, behalf of the Faculty division of
the Federalist Society. We are here today to discuss McIntosh versus United States,
in which the Supreme Court issued a nine zero decision on April seventeenth, twenty
twenty four. It is my honor to introduce our guests today, Stephan Cassella.
Stephen serves as an expert witness and consultants law enforcement agencies and the private
sector as the CEO of Asset Forfeiture Law LLC. Previously, he was the
Deputy Chief and then the Chief of the Asset Forfeiture and Money Laundering Section in
the US Attorney's Office in Baltimore, Maryland. And with that, I'd like
to turn things over to our guest to discuss the overview of the case and
the court's decision. Well, thank you very much. This was a criminal
forfeiture procedural decision, and the Court has not made many decisions on that particular
aspect of asset forfeiture, so it's unusual in that regard. But it's strictly
a case of statutory interpretation, and in fact it's a case of the interpretation
of a rule of criminal procedure that was last amended in two thousand and nine,
and this is the first time the Supreme Court has had any occasion to
write about it. The criminal forfeiture is part of the sentence in a criminal
case. So just as the account of time a defendant might be incarcerated for
the amount of fine he might pay or the amount of restitution he might be
ordered to pay, the amount of a criminal forfeiture or whether there's even going
to be a criminal forfeiture does not come up until there's a conviction at that
time. According to the rules, and the rule in question is Rule thirty
two point two Federal Rules of Criminal Procedure, there are three things that the
court needs to do after there's a conviction in a case. In which forfeiture
is requested by the government. The first is to ascertain whether the defendant wants
the jury retained to consider the forfeiture. The second is to enter a preliminary
order of forfeiture sufficiently in advance of sentencing to allow the parties to comment and
to suggest any corrections. And the third is at sentencing to include the forfeiture
in the oral announcement of the sentence and in the written judgment. And it's
the second of those that was issue here. The rule says that unless doing
so is impractical, the trial judge should enter a preliminary order of forfeiture in
advance of sentence, sufficiently in advanceive sentence to allow the parties to comment and
to suggest corrections. And the court did not do that in Macintosh's case.
So when it came to sentencing, there was some interlocatory appeal up to the
Supreme Court and back again, but that's not relevant up to the Court of
Appeals, but that's not relevant here. When it came to sentencing, the
court went ahead and entered the forfeiture order, and mister Macintosh's counsel argues that
because the court didn't follow the rule about entering preliminary orders, that that was
fatal and that the court was now barred from entering the order. The District
Court disagreed and said, no, it's requirement in the rule about entering your
preliminary order as a time related directive. It's not a mandatory, rigid rule,
and it does not bar me from going ahead and entering the forfeiture order
subject to a harmless error analysis, and the court found any error was harmless.
The defendant was well aware from the indictment and from all the proceedings during
the case he'd gotten a bill of particulars that the government was going to seek
porpraiture, and so this didn't apprejudice him that the court didn't enter the puliminary
He appealed to the Second Circuit. The Second Circuit agreed with the District Court,
there was no error, and he filed a third petition and the case
goes to the Supreme Court. Was argued just a few weeks ago. A
unanimous court says the lower courts were both correct. This was a time related
directive and there was no fatal error that precluded the district Court from entering the
forfeiture order, which, of course is significant because mister Macintosh had been convicted
of several hobst robberies. He had obtained seventy five thousand dollars in proceeds and
it had used the money to buy a BMW, and the government wanted to
take the BMW and it would have been a windfall to him if the district
court's failure to enter the preliminary order of forfeiture barred the forfeiture. So the
court says there was not There was an error, certainly, but it was
not a fatal error, and there was no reason the court could not proceed,
so the property was forfeited. So what's unusual about this case is that
generally the Supreme Court only grants cert to resolve a split in the circuits,
were to resolve a constitutional issue. There's no constitutional issue here. It's purely
a matter of procedure, and the Court found that as a matter of procedure
interpreting the rule, that this was not anything more than a time related directive.
They had three reasons for that, by the way. That one was
that the rule itself says unless doing so is impractical, which suggests that this
is not a rigid rule. A second that the rule is directed at what
the court should do, not at what the government should do. So it
wasn't the government's violation, it was the judges violation. And then also there
was no provision in Rule thirty two point two which suggests in any way what
the sanction should be for the court's failure to do this. In other situations
in which the Court has found a rule to be rigid and requires somewhere severe
sanction, the rule itself provides for that, and there was no such provision
in this rule that suggests any kind of detriment to the government's forfeiture action if
the rule is not followed. So, for all those reasons, the court
said there was no preclusion of the forfeiture. But why did they grantser when
there was no split in the circuits on this question. In fact, every
court that has addressed the issue has found exactly the same way, And the
reason is that the defendant mister Macintosh, in making his cert petition, conflated
two different rules. There is another Remember I said there were three different stages
in the preceding. The third stage is what the what the rule says the
court must do at the sentencing hearing itself, and if the court fails to
make the forfeiture part of the oral announcement of the sentence and included in the
judgment. The circuits are split as to whether that is fatal or is not
fatal. Some courts say that if the court doesn't impose it as part of
his sentence, that's too late to fix it later. Other courts say otherwise.
Now, that's a question on which the Court might have have someday to
grant to resolve a split in the circuits, but it didn't do that in
this case because that wasn't the issue in this case. In this case,
the issue was the preliminary order, and there was no split in the circuits.
But it appears from the cert petition that Council cited the cases on the
latter rule in suggesting that there was a split in the circuits, and the
Court took the case and then found that there was no significant controversy. In
fact, there's a footnote that Justice Sodo Mayor, who wrote the opinion for
the unanimous court drops it says, it looks like there's less than meets the
eye when it comes to a split in the circuits, and what she's referring
to was exactly the point that I'm making that the split was on a different
rule, not on this one. Now the only other. So one other
interesting thing about the opinion is that the court says, well, while the
error was the judge's error, and while the rule doesn't play any responsibility on
the government in this instance, Justice Department policy is nevertheless to tell its prosecutors
to remind judges of their duty to do what the rule requires. Justice Department
policy requires or instructs its prosecutors to submit a proposed preliminary order in advance of
sentence so that the court is reminded of its duty to do so. And
the government did not do that in this case. And the court says,
we hope, well, I think her phrase just as so too. My
ours phrase is this is an instance which the government failed to follow its policy,
which this court considers to be a rare occurrence, suggesting that the court
would look with this favor if this kind of problem occurs frequently in the future.
And so that's something that Justice Department, I'm sure will be reminding its
prosecutors about. That was a great overview of just the case in general,
and the decision I did want to ask right about you know, what you
see or what you may want to predict going forward, especially regarding the litigation
surrounding that other section that you mentioned, but also what before we get to
that, what would be the remedy for for mistake like this that happens,
right, I mean, whether it's the judges or now possibly if the prosecutors
fail to remind the judges, what what would be the remedy for that?
Well, what the court says is that it's still subject to harmless error analysis.
So if you have a situation where you come to sentencing and the and
the defendant had no clue that the government was seeking forfeiture, he is totally
surprised that he could argue prejudice because he could say, the court was supposed
to enter a preliminary order before sentenced to give me no notice of what was
going to happen here, and my councilor would have then had time to suggest
that the amount of the money judgment the government was seeking, or the forfeiture
of the BMW or whatever it is, was mistaken for whatever reason lack of
sufficient evidence to meet the preponderance standard, or they just named the wrong asset
or they calculated it wrong, then he could argue that the error was not
harmless and so that would be the remedy. But in this case, the
government had included a forfeiture notice in the indictment and had served him with a
bill of particulars indicating that it was seeking the forfeiture of his BMW. They
just hadn't reminded the judge that was supposed to enter a preliminary order before sentencing.
And the court said, in that instance, it's a harmless error.
Ah, right, And then regarding the other section right, section B of
that or sorry section four before before. Yeah, So do you expect to
see them grant sert on a case in the coming years or do you think
that this is so rare that it that it really will not get up to
the court. I think that they'll probably let the issue percolate in the in
the circuits for a while longer, because now there is some guidance for the
court from the court on what the considerations are. Remember, I said there
were three factors that they considered in determining that the rule in question, the
preliminary order rule which rule be two was not was only a time to rated
related directive. Two of those suggest the violation of the of the third part
will BE four would be time related as well. It doesn't include any sanction
uh in the rule itself, and it is directed at something the court should
do, it doesn't. It's not directed to some the litigants should do,
and that the government is certain to argue of citing those two points in Macintosh
that the failure to enter the order of forfeiture as part of the oral announcement
its sentencing likewise is only a time related directive, and that the failure to
enter it is not fatal and it will make that argument in all of the
circuits where the issue has not yet been resolved, and that's most of them.
Only two circuits have held that it's a fatal error. But in support
of the argument that it's a fatal error, defendants are likely to argue the
third point, which is that, whereas the Prilminary Order provision talks about unless
doing so is impractical and has vague language like sufficiently in advance of sentence,
Rule BE four is very specific. The court must enter the the forfeiture is
part of the oral announcement of the sentence and must include it in the judgment,
and defendants will argue that means that a defendant is entitled to know all
aspects of his sentence at one time. How long am I going to jail,
what's the period of supervisory release, what fine shall I pay? What
special assessment, what restitution? And what forfeiture order? All at one time.
So there will be some tension because the three factors that the court through
Justice Sodo mayor considered go two different ways when you apply them to rule before
and so will there continue to be a split in the circuits. Will the
two circuits that said that this is a fatal rule, I'm sorry, a
fatal error change their minds now that they've seen the analysis in Macintosh? Or
will other circuits say that those courts were correct now that they've seen the analysis
in Bank McIntosh. And I suspect we'll see a continue its continuous evolution of
the law. Unfortunately, it's not all that rare. It's not all that
rare for a judge to sentence the defendant and fail to enter the forfeiture order.
Then in there either because the prosecutor forgets to remind the judge, or
because the prosecutor brings it up, but the judge says, I'm not ready.
Why don't we do it next week? Or you know, something else
like that happens. I mean, there was a famous, famous among forfeiture
practitioners colloqui one time where the judge says to the prosecutor, what about the
forfeiture is at the sentencing hearing, And the prosecutor says, oh, your
honor, they will take care of that later, meaning somebody else in the
office who handles forfeitures. And no, they don't handle that later. It
has to be the rule says, do it at sentencing. Now, there
is a provision in the rules elsewhere that says if it's not possible to calculate
the exact amount of the forfeiture judgment, or not possible to identify all the
specific property, the court can enter and order at sentencing. In general terms,
in other words, the defendant shell forfeit all proceeds of his crime and
leave the amount of the calculation to a later hearing that would comply with the
rule. Then everybody agrees, they'd be no fatal error. But if the
judge does nothing and just and then then a week later, a month later,
a year later, the prosecutor says, oh, by the way,
you're honor you remember that sentencing we did some time ago. We never got
a forfeiture order. That's the situation where some courts say too late, and
some courts say it's okay, all right. Well, thank you so much
for breaking it down for us. Steph really really enjoyed having you on.
Thank you so much. Thank you for listening to this episode of SCO Discast.
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