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United States v. Groves

United States District Court, E.D. North Carolina, Western Division

December 5, 2017




         THIS MATTER comes before the Court on the United States' Unopposed Motion to Amend the Order of Forfeiture of Substitute Assets entered on November 15, 2017 (DE# 103) to better conform it to the understanding of the parties reflected in the Second Amended Motion for Forfeiture of Substitute Assets. DE# 102. In accordance with Rule 32.2(e) of the Federal Rules of Criminal Procedure and 21 U.S.C. 853(p), and in consideration of the motion, the Declaration of Senior Inspector Julia M. Younts, the defendant's response, as well the entire record in this matter, the Court finds as follows:


         On July 21, 2005, the defendant, Fontelle Ricardo Groves, was charged in a Criminal Indictment with, among other offenses, knowingly and intentionally conspiring to distribute and possess with the intent to distribute more than fifty (50) grams of cocaine base (crack), a Schedule II controlled substance, in violation of Title 21, United States Code, Section 846.

         The Indictment contained a forfeiture allegation notifying the defendant that, pursuant to Title 21 U.S.C. § 853, the United States would seek forfeiture of any and all property constituting, or derived from, any proceeds the defendant obtained directly or indirectly as a result of the offenses and any and all property used or intended to be used in any manner or part to commit and to facilitate the commission of the offenses. The forfeitable property named included the gross proceeds of the defendant's illegal acts, in the amount of $5 0, 000.00 U.S. Currency. The Indictment also notified the defendant that the United States would seek assets in substitution for any directly forfeitable but unavailable assets, in accordance with 18 U.S.C. § 853(p).

         On October 3, 2005, the defendant entered into a Plea Agreement as to Count One of the Criminal Indictment and agreed to the forfeiture of any drug-related assets acquired through unlawful activities, as specified in the indictment. DE #16 at ¶ 2.f. On October 4, 2005, this Court entered an Order of Forfeiture, ordering the defendant to forfeit $50, 000.00 U.S. Currency to the United States, based upon the defendant's Plea Agreement. DE #14. On October 11, 2005, a Judgment in the amount of $50, 000.00 was entered against the defendant. DE #14.

         On March 7, 2006, the Court sentenced the defendant to 262 months' imprisonment in the custody of the United States Bureau of Prisons. DE #25. Though the defendant appealed his criminal conviction, it was affirmed. DE #40.

         At the time that the Court entered the Order of Forfeiture, the proceeds forfeited by the defendant were not in the possession of or its whereabouts known to the Government. Declaration of Senior Inspector Julia M. Younts (Exhibit A), ¶ 12-13. According to Deputy Younts, after her review of the presentence report and public databases and speaking with criminal investigators, she concluded that the proceeds from the criminal activity could not be located. Id. Thus, no proceeds of the unlawful activity are available for forfeiture.

         Although Deputy Younts was unable to locate proceeds earned by the defendant from selling illegal drugs, she did identify the subject inmate trust account held by the defendant which contained $8, 145.90. Id. ¶ 13. Under Bureau of Prisons regulations, inmates like the defendant have the privilege of maintaining an individual trust account, which may hold money earned from prison employment or deposited from outside sources. Inmates may use the funds for very limited purposes and may withdraw no more than $3 60 per month from the account, although the Warden may further restrict the account. Id. ¶¶ 7-11. Based on this information, the United States filed a motion for forfeiture of substitute assets on April 8, 2015, serving the motion on the defendant at the institution at which he was then housed. DE# 46. Seven days later, the Court granted the motion. DE# 47. The defendant appealed. DE# 53.

         On appeal, the United States sought remand of the case when it became apparent that the defendant had received neither adequate notice nor opportunity to respond, in accordance with Local Rule 47.1(c), which allows a defendant 14 days to respond to a motion. On May 17, 2016, the Fourth Circuit entered an order remanding the case, with directions that the Order appealed from be vacated and the defendant allowed 14 days to respond to the United States' motion.

         Since the remand of this case, the Supreme Court entered its decision in Honeycutt v. United States, 137 S.Ct. 1626 (2 017). In Honeycutt the Court clarified that the forfeiture provisions in 21 U.S.C. § 853 do not impose joint and several liability on each member of a conspiracy. Rather, the Government may seek forfeiture only of "any property constituting, or derived from, any proceeds" that the defendant "obtained, directly or indirectly" from the offense giving rise to the forfeiture.

         Given the decision in Honeycutt, the Government seeks to modify the position it took in its pending Amended Motion for Order of Forfeiture of Substitute Assets, DE# 67, which was opposed by the defendant. DE# 86. The unopposed second amended motion, which is intended to supersede the first amended motion, reflects the agreement of the parties that the forfeiture of substitute assets is limited to the funds personally obtained from the defendant from his illegal activity, that is, $2, 110.00.


         Under Rule 32.2(e), "the court may at any time enter an order of forfeiture or amend an existing order of forfeiture to include property that "is substitute property that qualifies for forfeiture under an applicable statute." Fed. R. Crim. P. 32.2(e)(1)(B). Under 21 U.S.C. § 853(p), the forfeiture of substitute property is mandatory ...

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