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Forfeiture order entered against fraud defendant following trial

Where the defendant was convicted of mail fraud, wire fraud and conspiracy, and the jury held that fraud proceeds from the sale of real properties in Fairfax and Bethany Beach were traceable to two of the counts on which the defendant was convicted, a money judgment was entered in the amount of $1,640,665, to be offset by proceeds from the sale of the properties.

Background

On Oct. 4, 2019, a jury convicted David Harris Miller of 10 counts of a 12-count indictment. The jury also returned a special forfeiture verdict finding: (i) that fraud proceeds in the amount of $315,317.10 from the sale of real property in Fairfax were proceeds traceable to certain counts; (ii) that fraud proceeds in the amount of $58,818.35 from real property in Bethany Beach were proceeds traceable to certain counts and (iii) that the Fairfax and Bethany Beach properties were involved in the money laundering offense charged in one of the counts.

At issue now is the government’s motion for a preliminary order of forfeiture entering a money judgment in the amount of $1,640,665 against defendant to be offset by the proceeds from the sale of the Fairfax and Bethany Beach properties. Defendant opposed the government’s motion.

Analysis

As an initial matter, the jury returned a special verdict in this case finding that both defendant and his coconspirator used funds from their fraudulent activities that were traceable to the Fairfax and Bethany Beach properties and that the properties were involved in the money laundering offense. Defendant has not challenged the special verdict on forfeiture through either a rule 29 motion to set aside the verdict or a rule 33 motion for a new trial and the time for doing so has now expired.

Additionally, this is not the first time that defendant has challenged the potential forfeiture of his property in this case. In United States v. Miller, 911 F.3d 229 (4th Cir. 2018), the Fourth Circuit held that “probable cause exists to find that the properties are ‘involved in’ and ‘traceable to’ Miller’s wire fraud and money laundering charges and are, therefore, forfeitable.”

Yet, defendant fails to discuss or even mention the Fourth Circuit’s decision in this case, nor does he explain why the Fourth Circuit’s reasoning with respect to probable cause should not apply now that defendant has been convicted on the fraud and money laundering counts charged in the indictment. Significantly, the Fourth Circuit has already addressed and rejected defendant’s argument that, because he did not purchase the properties using fraudulently obtained funds, the properties were not subject to forfeiture.

Moreover, the jury’s special forfeiture verdict is supported by substantial evidence. The jury found that $58,815.35 in fraud proceeds were traceable to the Bethany Beach property. The jury also found that $315,317.10 in fraud proceeds were traceable to the Fairfax property. And, in his closing argument on forfeiture, defendant conceded these amounts. Additionally, there is substantial evidence to support the jury’s verdict that the Bethany Beach Property and the Fairfax Property were “involved in” money laundering.

Defendant further argues that forfeiture is barred by the Supreme Court’s decision in Honeycutt v. United States, 137 S.Ct. 1626 (2017). The evidence here, however, showed that the defendant played a major role in parts of the conspiracies. Courts have held that in such circumstances Honeycutt does not apply. Moreover, courts, including the Fourth Circuit have held that Honeycutt does not apply to forfeiture under 18 U.S.C. § 982(a)(I), which require forfeiture of property “involved in” money laundering. Accordingly, Honeycutt does not bar the entry of the preliminary forfeiture order or forfeiture of the subject properties.

Defendant also challenges the amount of the money judgment proposed by the government. However, the evidence and testimony shows the government correctly calculated the proposed money judgment at $1,640,655. All of the fraudulent funds obtained from the three victims of defendant’s crimes are appropriately considered and included when calculating an appropriate money judgment and forfeiture.

Defendant next makes a cursory argument that a money judgment of $1,640,665 violates the Eighth Amendment’s prohibition on excessive fines. An analysis of the applicable factors demonstrates that the forfeiture proposed by the government is plainly not excessive.

Government’s forfeiture motion granted.

United States v. Miller, Case No. 17-cr-213, Dec. 12, 2019. EDVA at Alexandria (Ellis). VLW 019-3-599. 14 pp.

VLW 019-3-599

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