Federal Judiciary

United States v. Awad, et al., Docket Nos. 07-4483-cr (L), 07-4539-cr (Con), 07-5067-cr (Con), 07-5068-cr (XAP) (2d Cir. March 11, 2010) (found here)

Awad and his co-defendants were convicted of participating in a conspiracy to distribute a Schedule I controlled substance (khat, which contains cathinone).  Although they had no assets to satisfy a forfeiture order at the time of sentencing, the district court still ordered forfeiture of millions of dollars. 

On appeal, they argued that a defendant in a drug case is not subject to forfeiture in the form of a money judgment where the defendant does not have assets to satisfy the money judgment at the time of sentencing.  The Second Circuit noted that criminal forfeiture statutes provide that an individual convicted of a drug offense punishable by imprisonment of more than one year "shall forfeit to the United States . . . any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as a result of such violation."  21 U.S.C. § 853(a)(1).  It then joined the First, Third, Seventh and Ninth Circuit's in holding that Section 853 "permits imposition of a money judgment on a defendant who possesses no assets at the time of sentencing." 

In sum, the Second Circuit reasoned (among other things) that when "a defendant lacks the assets to satisfy the forfeiture order at the time of sentencing, the money judgment . . . is effectively an in personam judgment in the amount of the forfeiture order."  Put differently, although the defendant might not have the money now, s/he might at some point in the future have assets to satisfy such a money judgment.