Friday, September 1, 2017

Sixth Circuit Holds Government did not Prove Fugitive Disentitlement for Civil Forfeiture (9/1/17)

In United States v. $525,695.23 Seized from JPMorgan Chase Bank, ___ F.3d ___, 2017 U.S. App. LEXIS 16077 (6th Cir. 2017), here, the Court vacated the district court's application of the fugitive disentitlement statute, 28 U.S.C. § 2466.  The case involves civil forfeiture of certain U.S. assets based on drug trafficking and money laundering.  Tax crimes were not involved.  Still the fugitive disentitlement can be implicated in tax crimes cases.  See Ninth Circuit Speaks on FOIA, but Ducks Fugitive Disentitlement (Federal Tax Crimes Blog 3/13/12), here.

I provide the statute and then the Court's general discussion of the requirements for application of the statute.

The statute, § 2466, here, is:
28 U.S. Code § 2466 - Fugitive disentitlement(a) A judicial officer may disallow a person from using the resources of the courts of the United States in furtherance of a claim in any related civil forfeiture action or a claim in third party proceedings in any related criminal forfeiture action upon a finding that such person—
   (1) after notice or knowledge of the fact that a warrant or process has been issued for his apprehension, in order to avoid criminal prosecution—
      (A) purposely leaves the jurisdiction of the United States;
      (B) declines to enter or reenter the United States to submit to its jurisdiction; or
      (C) otherwise evades the jurisdiction of the court in which a criminal case is pending against the person; and
   (2) is not confined or held in custody in any other jurisdiction for commission of criminal conduct in that jurisdiction.
(b) Subsection (a) may be applied to a claim filed by a corporation if any majority shareholder, or individual filing the claim on behalf of the corporation is a person to whom subsection (a) applies.
The Court's summary of the requirements of the statute is:
Based on the text of this statute, this Court has adopted the following five part test to determine whether disentitlement is appropriate: 
(1) a warrant or similar process must have been issued in a criminal case for the claimant's apprehension; (2) the claimant must have had notice or knowledge of the warrant; (3) the criminal case must be related to the forfeiture action; (4) the claimant must not be confined or otherwise held in custody in another jurisdiction; and (5) the claimant must have deliberately avoided prosecution by (A) purposefully leaving the United States, (B) declining to enter or reenter the United States, or (C) otherwise evading the jurisdiction of a court in the United States in which a criminal case is pending against the claimant. 
Salti, 579 F.3d at 663 (quoting Collazos, 368 F.3d at 198). 
The issues the Court addressed are:

1. Whether evading prosecution must be the sole reason for remaining outside the United States 
Sbeih argues that the language of the fugitive disentitlement statute requires that the government prove that evading criminal prosecution is "at least the principal or dominant, if not the sole, reason for [his] decision to remain in Jerusalem." (Claimant's Br. at 25.) According to  Sbeih, the language in § 2466 stating that disentitlement is appropriate when a claimant refuses to reenter the United States "in order to avoid criminal prosecution" dictates that "the government must prove that avoiding prosecution was the reason the claimant has failed to return." (Id. at 27 (quoting 28 U.S.C. § 2466(a)(1)).) Sbeih further argues that "the potential existence of 'another reason' for failure to reenter is enough to reverse the application of the statute." (Id.) He also points to our decision in Salti, in which, according to his interpretation, we determined that "the existence of a legitimate reason for failure to return, such as the claimant's ill health, may preclude a finding . . . that the failure to reenter is 'in order to avoid prosecution.'" (Id. at 26 (citing Salti, 579 F.3d at 665).) 
As an initial matter, we do not read Salti as requiring the government to prove that Sbeih had only one motive—avoiding prosecution—for staying in Israel. Salti involved a case where the claimant produced evidence that he was unable to travel from Jordan to the United States because of his poor health and recent open heart surgery. 579 F.3d at 665. The district court, however, only considered the claimant's health when deciding whether, in its discretion, disentitlement was appropriate. Id. Notably, the district court considered the claimant's poor health irrelevant to the question of whether he was "deliberately avoid[ing] prosecution by . . . declining to enter or reenter the United States." Id. (alterations in original) (quoting Collazos, 368 F.3d at 198). The Salti Court determined that the district court committed error by failing to consider the claimant's health because if the claimant was "indeed too sick to travel, such that his illness is what prevent[ed] him from returning to the United States, the Government has not shown as a matter of law that [the claimant's] being in Jordan, and not in the United States, is 'in order to avoid criminal prosecution.'" Id. at 665-66 (quoting 28 U.S.C. § 2466(a)(1)). In reaching that conclusion, the Salti Court relied on Collazos, in which the Second Circuit found that "disentitlement was appropriate when the individual in question 'made a conscious choice not to enter or reenter the United States to face the criminal charges pending against her,' and when 'nothing in the record indicate[d] that [the claimant] was ever confined, incarcerated, or otherwise unable to travel to the United States." Id. at 666 (emphasis in original) (quoting Collazos, 368 F.3d at 201). 
The Salti Court did not consider whether any legitimate reason for staying outside the United States would defeat the fugitive disentitlement statute's requirement that failure to reenter the United States must be "in order to avoid criminal prosecution." 28 U.S.C. § 2466(a)(1). Instead, Salti addressed the situation where the government had not proven that the claimant was able to return to the United States in the first place but made the conscious choice not to return so that he could evade prosecution. The Court never stated that disentitlement was wrongly applied to the claimant because of his illness or that evidence of his illness was enough for the claimant to establish that he was not evading criminal prosecution by staying in Jordan. The Salti Court instead remanded the case for further factual development. Thus, Salti did not decide the question of whether the government must prove that Sbeih's principal or sole purpose in staying in Jerusalem was to evade prosecution. 
Sbeih further contends that the D.C. Circuit, in United States v. $6,976,934.65, Plus Interest Deposited into Royal Bank of Scotland International, Account Number 2029-56141070, Held in the Name of Soulbury Ltd., 554 F.3d 123 (D.C. Cir. 2009), adopted a test whereby the government must prove that evading prosecution is the sole reason for the claimant's refusal to return to the United States. The D.C. Circuit's opinion also does not address the question presented here. Contrary to Sbeih's argument, the court in that case faced a situation where the government failed to prove that the claimant's purpose in remaining outside the United States was to avoid prosecution. The government pointed to a television appearance of the claimant in which he acknowledged that "he would likely be arrested if he returned to the United States." Id. at 132. The court determined, however, that "the video also suggest[ed] that [the claimant] did not wish to reenter the United States regardless of any pending criminal charges." Id. Specifically, the court noted that "[t]he district court made no finding as to what, if anything, this comment reveals about [the claimant's] reasons for remaining outside the United States." Id. Given that the court was deciding the motion using a summary judgment standard, the court determined that the claimant's statement was "sufficient to raise a genuine issue of fact whether he declined to reenter the country in order to avoid criminal prosecution." Id. 
As explained by the Fourth Circuit, the D.C. Circuit decided that the claimant's statement made on television "was insufficient to show conclusively that avoiding prosecution was even a  reason that the claimant remained outside the United States, and neither the district court nor the government had actually attempted to show intent, believing the requirement was met by showing mere 'notice or knowledge.'" Batato, 833 F.3d at 431 (citing $6,976,934.65, 554 F.3d at 132). The D.C. Circuit did not determine that the government must also establish that the claimant had the sole intent of avoiding prosecution. Thus, while the D.C. Circuit's opinion is instructive for determining the standard of proof the government must provide of the claimant's intent, it does not address whether a claimant can have multiple motives in remaining outside the United States, one of which is to evade prosecution, and still be subject to disentitlement. 
We further note that three other circuit courts have determined that the government does not need to prove that the claimant had the principal or sole motive of avoiding prosecution for the disentitlement statute to apply. In United States v. $671,160.00 in U.S. Currency, 730 F.3d 1051 (9th Cir. 2013), the Ninth Circuit addressed a case where a claimant, who was not a citizen of the United States, argued that he "remain[ed] in Canada not to 'evade the [state] court's jurisdiction' but insist[ed] that he 'merely returned to his home.'" Id. at 1056 (second alteration in original). The court, however, noted: 
The existence of other factors that might have also motivated [the claimant] to remain abroad, such as his Canadian citizenship and residency, does not undermine or foreclose the district court's finding that [the claimant] made a conscious choice to not "enter or reenter the United States" in order to avoid criminal prosecution. 28 U.S.C. § 2466(a)(1)(B). [The claimant's] desire to evade criminal prosecution need not be the sole motivating factor causing him to remain abroad, to the exclusion of all others. All that is required is a finding that "after notice or knowledge of the fact that a warrant or process has been issued for his apprehension, in order to avoid criminal prosecution," [the claimant] "declines to enter or reenter the United States to submit to its jurisdiction." Id. There is sufficient evidence here to support that determination. 
$671,160.00 in U.S. Currency, 730 F.3d at 1056 n.2. 
The Second Circuit similarly held "that the government was required to prove that the [claimants] remained outside of the United States with the specific intent to avoid criminal prosecution." United States v. Technodyne LLC, 753 F.3d 368, 383 (2d Cir. 2014) (citation omitted). The court, however, rejected the claimants' "attempts to equate specific intent with sole, principal, or dominant intent." Id. The court went on to state that "[i]t is commonplace that  the law recognizes that there may be multiple motives for human behavior; thus, a specific intent need not be the actor's sole, or even primary, purpose." Id. at 385. The court further noted that other crimes, such as bribery, tax evasion, and conspiracy, generally require a specific intent, but that "a defendant accused of such a crime may properly be convicted if his intent to commit the crime was any of his objectives." Id. (citations omitted). The court also opined that, had Congress intended to require that the claimant's sole purpose in remaining outside the United States was to avoid prosecution, it would have stated so expressly. Id. However, the fugitive disentitlement statute does not contain such limiting language. Id. Finally, the court stated: 
As Congress sought to bar the "unseemly spectacle" of allowing an accused to absent himself deliberately in order to avoid prosecution in the United States while using United States courts to retrieve the proceeds of his crime, it would defy [*17]  logic to infer that Congress sub silentio intended to allow the fugitive to create such an abomination by the simple expedient of claiming some additional reason for not returning. 
Id. at 385-86 (internal citation omitted). 
Most recently, the Fourth Circuit held in United States v. Batato that § 2466 has a specific intent requirement, but that it does not mandate that avoiding prosecution be the sole reason for a claimant's refusal to return to the United States. 833 F.3d at 429-31. The court noted that the text of the statute does not include any limiting language that would indicate that "Congress wanted to make § 2466 apply only where avoiding prosecution was the 'sole' or 'principal' reason for a person's absence from the United States." Id. at 430. The court also opined that "Congress clearly anticipated § 2466 would apply to individuals with no reason to come to the United States other than to defend against criminal charges." Id. With regard to those people, the court further stated: 
Because the statute must apply to people with no reason to come to the United States other than to face charges, a "sole" or "principal" purpose test cannot stand. The principal reason such a person remains outside the United States will typically be that they live elsewhere. A criminal indictment gives such a person a reason to make the journey, and the statute is aimed at those who resist nevertheless. 
We join the Second, Fourth, and Ninth Circuits in holding that, while § 2466 requires the government to prove that the claimants had a specific intent of avoiding criminal prosecution in deciding to remain outside the United States, the statute does not require that that intent be the sole or principal intent. As the other three circuits have noted, the text of the statute does not imply such a requirement. Furthermore, Congress was certainly able to impose a more stringent intent requirement and knew how to do so, but chose not to in this instance. Congress also intended for foreign nationals to be subject to § 2466, as it included both failing to enter and to reenter as ways of avoiding criminal prosecution. 28 U.S.C. § 2466(a)(1)(B). Therefore, Congress contemplated that non-citizens who had not been to the United States but who nevertheless failed to come to the country after a criminal indictment would be subject to disentitlement. These individuals likely have many reasons for not coming to the United States, only one of which may be to avoid criminal prosecution. However, Congress [*19]  still explicitly included them in the reach of § 2466. 
Moreover, courts in the United States have repeatedly recognized that individuals can have multiple goals when committing various crimes; as long as one of those objectives was actually to commit the crime, the mens rea element is satisfied. See Technodyne LLC, 753 F.3d at 385 (collecting cases). We agree that the same principle applies here—as long as one of the goals in not coming to the United States is to evade prosecution, the specific intent requirement of § 2466 is satisfied. We therefore hold that § 2466 does not provide that disentitlement is proper only when a claimant has the sole or principal purpose of evading prosecution in not returning to the United States. Instead, disentitlement under § 2466 is appropriate whenever a claimant fails to enter or reenter the United States with the intention of avoiding prosecution, regardless of any additional purposes the claimant may have for remaining outside the United States.
The Court of Appeals then held that the Government had not met the burden of proof under the statute.

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