<< Cellular-site data tracking | Main | News Scan >>


A co-conspirator's forfeiture liability

| 0 Comments
In Honeycutt v. United States (16-142), the U.S. Supreme Court unanimously reversed the Court of Appeals for the Sixth Circuit holding that a co-conspirator cannot be ordered to forfeit conspiracy proceeds did not personally obtain under a theory of joint and severable liability.

In this case, the Honeycutt brothers operated a hardware store - Tony owned the store with their father, and Terry was a "salaried employee" who managed sales and inventory.  The brothers were warned by law enforcement that a product they carried called "Polar Pure", a iodine based water purification product, contained an ingredient that could be used to manufacture methamphetamine.  Despite the warning, the brothers continued to sell large quantities of the product, and over a 3-year period the store grossed more than $400,000 from the sale of more than 20,000 bottles of Polar Pure.  The brothers were subsequently indicted for various federal crimes relating to the sale of iodine with the knowledge it would be used to manufacture methamphetamine.

Under 21 U.S.C §853(a)(1), "any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of" certain drug crimes must be forfeited.  The Government sought forfeiture judgments against each brother in the amount of approximately $270,000, which represented the hardware store's profits from the sale of Polar Pure. Tony, the store owner, pleaded guilty and agreed to forfeit $200,000. Terry went to trial and was found guilty of 11 counts, including conspiracy to and knowingly distributing iodine.  He was sentenced to 60 months in jail.  The Government also demanded that he be held jointly and severally liable for the profit of the illegal sales and sought a money judgment of approximately $70,000, which represented  the amount of conspiracy profits outstanding after Tony's forfeiture payment despite the Government's concession that Terry had no controlling interest in the store and did not stand to personally benefit.

The District Court declined to enter a forfeiture judgment against Terry because he was simply a "salaried employee" and did not personally receive any of the iodine sales profits.  The Sixth Circuit reversed and held as co-conspirators, the brothers were jointly and severally liable for any proceeds of the conspiracy.

The U.S. Supreme Court unanimously reversed holding:
 
Forfeiture pursuant to §853(a)(1) is limited to property the defendant himself actually acquired as the result of the crime. In this case, the Government has conceded that Terry Honeycutt had no ownership interest in his brother's store and did not personally benefit from the Polar Pure sales. . . .The District Court agreed.  Because Honeycutt never obtained tainted property as a result of the crime, §853 does not require any forfeiture.

Leave a comment

Monthly Archives