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United States v. Day

February 22, 2006

UNITED STATES OF AMERICA,
v.
BRITTIAN PERRY DAY DEFENDANT.



The opinion of the court was delivered by: Paul L. Friedman United States District Judge

OPINION

This matter is before the Court on the defendant Brittian Perry Day's motion for judgment of acquittal with respect to certain forfeiture allegations that appear in the superseding indictment against him and on the government's related motion for entry of a money judgment and preliminary order of forfeiture.

I. BACKGROUND

On August 4, 2004, a federal grand jury returned an indictment against Brittian Perry Day, charging that, over a ten year period from March 1994 to August 2004, he had engaged in a scheme to defraud numerous employee benefit plans and one charitable organization in connection with the sale of $1.5 million worth of insurance policies. A superseding indictment was returned on August 27, 2004. The superseding indictment included six counts of mail fraud under 18 U.S.C. § 1341 (Counts 1 through 6), ten counts of wire fraud under 18 U.S.C. § 1343 (Counts 7 through 16), and five counts of theft or embezzlement from employee benefit plans under 18 U.S.C. § 664 (Counts 17 through 21).*fn1 In addition to the substantive criminal charges, the superseding indictment also contained (1) forfeiture allegations pursuant to 18 U.S.C. § 982(a)(2)(A) and 18 U.S.C. § 982(b)(1) in connection with the mail and wire fraud charges (paragraphs 35-37), and (2) forfeiture allegations pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c) in connection with the charges of theft or embezzlement from employee benefit plans (paragraphs 38-40). Through the superseding indictment, the government originally sought forfeiture of Mr. Day's primary residence in Washington, D.C., two beach homes in Rehoboth Beach, Delaware, and a Mercedes-Benz automobile. The government also sought entry of a money judgment against Mr. Day in the amount of $1.5 million, which, according to paragraphs 36 and 39 of the superseding indictment, "represents the sum of money equal to the total amount of money constituting, or derived from, proceeds" of his crimes.

A retyped indictment was prepared, excluding the forfeiture allegations, and submitted to the jury so it could consider the substantive criminal counts without being confused by the existence of -- and the different burden of proof pertaining to -- the forfeiture allegations. On April 20, 2005, the jury returned its unanimous verdict finding Mr. Day guilty on all counts. In preparation for submitting the forfeiture allegations to the jury, the government retyped the indictment again, limiting its request for forfeiture to a money judgment. According to the government, it had made "a tactical choice to streamline the proceedings by pursuing only the money judgment." Government's Opposition to Defendant's Motion for Judgment of Acquittal on Counts 36 Through 39 ("Gov't Opp'n") at 2. Thus, the government's forfeiture allegations under 18 U.S.C. § 982(a)(2)(A), relating to Counts 1 through 16 (mail and wire fraud), now read as follows:

As a result of the offenses alleged in Counts One through Sixteen of this Indictment, the defendant in this Indictment shall forfeit to the United States any property constituting, or derived from, proceeds obtained, directly or indirectly, as a result of mail fraud, in violation of Title 18, United States Code, Section 1341, and/or wire fraud, in violation of Title 18, United States Code, Section 1343 including, but not limited to:

(a) Money Judgment:

$1,500,000.00, which represents the sum of money equal to the total amount of money constituting, or derived from, proceeds obtained, directly or indirectly, as a result of mail fraud, in violation of 18 U.S.C. § 1341, and/or wire fraud, in violation of 18 U.S.C. § 1343. Fed. R. Crim. P. 32.2(b)(1).

Retyped Superseding Indictment at ¶ 36. The forfeiture allegations under 28 U.S.C. § 2461(c) and 18 U.S.C. § 981(a)(1)(C), relating to Counts 17 through 21 (theft or embezzlement from employee benefit plans), now read as follows:

As a result of the offenses alleged in Counts Seventeen through Twenty-One of this Indictment, the defendant in this Indictment shall forfeit to the United States any property constituting, or derived from, proceeds traceable to embezzlement from pension and welfare funds, in violation of Title 18, United States Code, Section 664 including, but not limited to:

(a) Money Judgment:

$1,500,000.00, which represents the sum of money equal to the total amount of money constituting, or derived from, proceeds traceable to embezzlement from pension and welfare funds, in violation of 18 U.S.C. § 664. Fed. R. Crim. P. 32.2(b)(1).

Retyped Superseding Indictment at ¶ 39.

Thereafter, Mr. Day knowingly and voluntarily waived his right to have the jury determine whether the government was entitled to the forfeiture sought and committed the forfeiture issues to the Court for all necessary findings of fact and conclusions of law. Because the government had decided that, in lieu of seeking the forfeiture of specific property, it intended only to pursue a $1.5 million money judgment against Mr. Day, the government asked the Court to enter the money judgment and then to order the forfeiture of Mr. Day's primary residence as a substitute asset under 18 U.S.C. § 853(p) in satisfaction of the money judgment.*fn2

Counsel for Mr. Day did not challenge, as a factual matter, the total amount of proceeds sought by the government in forfeiture and, in fact, orally stipulated that the government could produce evidence to support its claim that Mr. Day had received $1.5 million in proceeds from his criminal activities.*fn3 Defendant's counsel instead argued that there is no basis in criminal forfeiture law for the government to obtain a personal money judgment against Mr. Day and that, in any event, the forfeiture statutes cited in the superseding indictment do not apply to the offenses of which Mr. Day was convicted. The Court heard argument from the parties on two occasions and set a schedule for briefing on the legal issues raised during the hearings.

II. DISCUSSION

A. Defendant's Motion for Judgment of Acquittal

On August 5, 2005, pursuant to Rule 29 of the Federal Rules of Criminal Procedure, counsel for Mr. Day filed a motion styled Defendant's Motion for Judgment of Acquittal on Counts 36 and 39 of the Indictment.*fn4 The motion can be characterized as presenting arguments that the forfeiture allegations in the superseding indictment fail to invest the Court with the authority to enter an order of forfeiture against Mr. Day.*fn5 As counsel for Mr. Day puts it, there are two issues here:

The first is whether a money judgment -- typically, a civil remedy -- is available under authority of the forfeiture statutes following criminal convictions in mail and wire fraud or embezzlement cases, and the second is whether the forfeiture statutes under which the ...


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