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Money Judgments in Criminal Forfeiture

By Gary Stein and Meredith Tanchum

The Second Circuit has just become the latest Court of Appeals to uphold the imposition of money judgments in criminal forfeiture orders. The court sustained forfeiture money judgments of $10 million and $4.6 million against two indigent defendants, holding that the criminal forfeiture statutes permit “imposition of a money judgment on a defendant who possesses no assets at the time of sentencing.” United States v. Awad, 598 F.3d 76, 78 (2d Cir. 2010). While Awad was a drug case, white-collar sentences also commonly include forfeiture money judgments, as shown by the giant judgments against Bernie Madoff ($170 billion) and Marc Dreier ($746 million).

The ruling in Awad quelled a mini-rebellion in the making. Last Summer, Judge John Gleeson of the Eastern District of New York held that the criminal forfeiture statutes do not authorize courts to issue money judgments. United States v. Surgent, No. 04-CR-364 (JG) (SMG), 2009 WL 2525137 (E.D.N.Y. Aug. 17, 2009). The government did not appeal in Surgent, and defense lawyers in the Second Circuit began pressing other judges to follow Judge Gleeson's lead. Faced with a similar issue in Awad, the Second Circuit ordered supplemental briefing, citing Surgent, and then, in a footnote in its opinion, rejected Judge Gleeson's analysis as “thorough” but ultimately “unpersuasive.”

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