Summary
The Second Circuit affirmed the district court's denial of a motion to enjoin the forfeiture of a substitute asset to satisfy a criminal forfeiture money judgment. The court held that the Sixth Amendment does not guarantee a right to counsel during post-judgment substitute-asset forfeiture proceedings because they do not increase the defendant's punishment. Additionally, the court ruled that the forfeited asset did not constitute "earnings" under the Consumer Credit Protection Act and was therefore exempt from garnishment limitations, and found no basis for remanding the case to prioritize restitution over forfeiture.
Topics
Practice areas
Questions Presented
- Whether the Sixth Amendment guarantees a right to counsel in a post‑judgment substitute‑asset forfeiture proceeding.
- Whether the substitute asset constitutes “earnings” subject to the 25 % garnishment limitation of the Consumer Credit Protection Act.
- Whether the district court should remand to allow the government or the court to prioritize restitution over forfeiture.
Holdings
- There is no Sixth Amendment right to counsel for a post‑judgment substitute‑asset forfeiture proceeding.
- The substitute asset does not qualify as “earnings” under the Consumer Credit Protection Act and is not subject to the 25 % garnishment limitation.
- No remand is required; the government’s discretion to apply forfeited assets to restitution is not mandatory and the district court lacks authority to order such prioritization.
Key quotations
“We hold that there is generally no Sixth Amendment right to counsel for a post‑judgment, substitute‑asset forfeiture proceeding.”
“The Substitute Asset, which represents the proceeds of the sale of Romeo’s equity interest in Atlas, does not qualify as “compensation paid or payable for personal services” under 15 U.S.C. § 1672(a).”
“We therefore agree with the government that Romeo cannot satisfy his burden to demonstrate plain error on this issue.”
Factual background
Romeo, while employed as head of an IT department at a New Jersey law firm, created a shell company and billed the firm for nonexistent IT services, diverting the funds to his own accounts. He pleaded guilty to wire fraud and money laundering, received a restitution and forfeiture judgment of $855,629.76, and later the government sought forfeiture of $524,657.49 representing his sale of a membership interest in Atlas Certified, LLC.
Procedural history
Romeo was convicted of wire fraud and money laundering, sentenced to imprisonment, restitution and forfeiture. The district court entered a preliminary substitute‑asset forfeiture order seizing $524,657.49 from the sale of his interest in Atlas Certified, LLC. Romeo, proceeding pro se, moved to enjoin the forfeiture; the district court denied. Romeo appealed.