In 2014, a federal jury convicted the former mayor of New Orleans (2002-2010) of twenty federal white-collar felonies including bribery, honest service wire fraud, conspiracy to commit money laundering, and filing false tax returns. (Here’s the opinion). The mayor appealed his conviction for honest service wire fraud as well as the judge’s imposition of a money judgment for forfeiture.
The appeal of the honest service wire fraud conviction was a long shot. He argued that the judge misstated the law when it instructed the jury that it could convict the mayor of honest service wire fraud for accepting a post-mayoralty employment contract in exchange for performing official act of supporting a city contract for the future employer even if the jury found that the mayor would have supported the contract even if he was not promised employment later. The mayor argued that he could only be convicted of honest service wire fraud if the government proved that he was influenced in his official action by the promise of future employment. But bribery is complete as soon as a person accepts a payment knowing that it is being given by the payor with the intent that the payment influence an official act–the act need never be completed. Therefore, the Fifth Circuit rejected this argument.
The asset forfeiture portion of the appeal is more interesting. The mayor argued that the judge erred by issuing a money judgment for forfeiture, instead of tying the forfeiture to certain assets that were obtained illegally.
The asset forfeiture laws operate through tainted property analysis. A piece of property obtained through an illegal transaction is tainted property and is subject to forfeiture. Any property later acquired with tainted property is also tainted and is similarly subject to forfeiture. Moreover, if the government proves that the defendant placed certain property beyond the reach of the government, the government may be able to take other “substitute property” in criminal asset forfeiture proceedings. However, each of these asset forfeiture analyses–directly tainted property, indirectly tainted property, and substitute asset theory–rely on some tracing of the illegally obtained property. On the other hand, the government has begun arguing that all it must do is prove the amount of money or property that the defendant received illegally and ask for a “money judgment for forfeiture” in that amount. Nothing in the asset forfeiture statutes authorizes this procedure. But, unfortunately, courts have routinely accepted it.
The Fifth Circuit relied on prior cases to uphold the money judgment for forfeiture in this case. However, it left the door open for later defendants to make the argument that money judgments for forfeiture are only appropriate where the government can prove that the property it seeks to forfeit is substitute property under 21 U.S.C. 853(p). The circuits disagree on this point, and it is an issue that should be taken to the Supreme Court for resolution.
This case shows how complicated and confusing asset forfeiture law is, and illustrates why people facing public corruption and other economic or white-collar offenses must hire an experience asset forfeiture defense lawyer when facing investigation or criminal prosecution. Our Raleigh asset forfeiture lawyers have developed substantial experience in this area of the law. If you are facing prosecution, contact us today.