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United States v. Cooper

United States District Court, District of Columbia

December 13, 2018

UNITED STATES OF AMERICA,
v.
CARLOS COOPER, Defendant.

          MEMORANDUM OPINION

          Emmet G. Sullivan United States District Judge.

         Pending before the Court is the government's motion for a final order of forfeiture. Upon careful consideration of the government's motion, the opposition, reply, sur-reply, and sur-sur-reply thereto, the applicable law, the parties' arguments at the July 30, 2018 motion hearing, the entire record, and for the reasons stated below, the Court DENIES the government's motion for a final order of forfeiture.

         I. Background

         On March 8, 2017, defendant Carlos Cooper pleaded guilty to one count of conspiracy to distribute and possession with intent to distribute 100 grams or more of heroin in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(B)(i), and 846. See Plea Agreement, ECF No. 175. As part of the plea agreement, Mr. Cooper agreed to forfeit “(1) the value of any property constituting, or derived from, any proceeds he obtained, directly or indirectly, as the result of the violation to which he is pleading guilty; (2) any . . . property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such violation; and (3) any substitute assets for property otherwise subject to forfeiture” pursuant to 21 U.S.C. § 853. Id. at 8. The parties were unable to reach an agreement regarding a proposed final order of forfeiture and asked the Court to resolve this issue prior to scheduling a sentencing hearing for Mr. Cooper. See Joint Status Report, ECF No. 229 at 1.

         The government seeks a forfeiture money judgment in the amount of $46, 432, which the government contends represents the proceeds that Mr. Cooper "personally obtained" as a result of his heroin sales to co-defendant Harry Jackson. Govt's Mem. in Support of Final Order of Forfeiture (“Govt's Mot.”), ECF No. 235 at 1. Mr. Cooper does not contest “that the government's proffer established by a preponderance of evidence that 650 grams of heroin represents the quantity of heroin he distributed to Mr. Jackson during the charged conspiracy.” Def.'s Response, ECF No. 238 at 2. However, he disagrees with the government's assertion that he "personally obtained proceeds totaling $46, 432." Id. Rather, Mr. Cooper argues that the circumstantial evidence demonstrates that he was a middle man: he discussed with Mr. Jackson the latter's interest in obtaining heroin, he told Mr. Jackson the price being charged by his supplier, [1] he obtained money from Mr. Jackson to pay his supplier, and then provided the drugs to Mr. Jackson. Id. Therefore, according to Mr. Cooper, he did not “obtain” for himself the total amount that Mr. Jackson paid for the heroin, but rather “at most” the profit Mr. Cooper made on those transactions. Id. Since the government did not provide direct or circumstantial evidence about his profits, Mr. Cooper suggests that $5 per gram is a reasonable estimate of his profit. Id.

         The government relies on five heroin sales by Mr. Cooper to support the amount it seeks in forfeiture. First, the government states that the April 25, 2015 activations demonstrate that Mr. “Cooper would obtain the ‘buy money' from [Mr.] Jackson, pay the supplier for the heroin, and then deliver the heroin to [Mr.] Jackson.” Govt's Mot., ECF No. 235 at 8. The government notes that it “appears that [Mr.] Cooper and [Mr.] Jackson were discussing [Mr.] Cooper trying to negotiate a lower price with the supplier.” Id. at 7. Second, the May 5-6, 2015 activations demonstrate that Mr. “Cooper instructed [Mr.] Jackson to give him as much money as he could, and that [Mr.] Cooper would front [Mr.] Jackson the remaining heroin he was going to purchase.” Id. at 9. Later that day, Mr. Cooper “inform[ed] [Mr.] Jackson that he obtained over 400 grams of heroin and was arranging to pick it up and deliver it to [Mr.] Jackson.” Id. The next day, Mr. Cooper informed Mr. Jackson that he had been charged $31, 032 for 431 grams of heroin, for which Mr. Jackson owed $16, 832 to Mr. Cooper. Id. Third, the June 1, 2015 activations demonstrate that Mr. “Cooper picked up money from [Mr.] Jackson and then obtained heroin from his supplier in an amount of at least 50 grams.” Id. at 10-11. Fourth, the June 3, 2015 activations demonstrate that Mr. Cooper informed Mr. Jackson “that his suppliers had additional heroin available . . . and wanted to know whether [Mr.] Jackson wanted to purchase it, ” which he ultimately did. Id. at 11. Finally, the June 30, 2015 activation demonstrates that Mr. Jackson advised Mr. Cooper that he would purchase 50 grams of heroin. Id. at 12.

         II. Applicable Law

         Section 853(a)(1) of Title 21 of the United States Code provides that a person convicted of certain crimes, including the crimes to which Mr. Cooper has pleaded guilty, “shall forfeit to the United States . . . (1) any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as a result of [the] violation; (2) any of the person's property used, or intended to be used, in any manner or part, to commit, or to facilitate the commission of, such violation . . . .” 21 U.S.C. § 853(a). Section 853(o) provides that “[t]he provisions of this section shall be liberally construed to effectuate its remedial purposes.” 21 U.S.C. § 853(o).

         “The government must prove its forfeiture allegations by a preponderance of the evidence.” United States v. DeFries, 129 F.3d 1293, 1312-13 (D.C. Cir. 1997). “[T]he government may satisfy its burden of proof by direct or circumstantial evidence.” United States v. Pierre, 484 F.3d 75, 86 (1st Cir. 2007). Since forfeiture is part of sentencing, the Federal Rules of Evidence do not apply. United States v. Smith, 770 F.3d 628, 641 (7th Cir. 2014). Rather, in making the forfeiture determination, the Court may consider “evidence already in the record, including any written plea agreement, and . . . any additional evidence or information submitted by the parties and accepted by the court as relevant and reliable.” Fed. R. Crim. P. 32.2(b)(1)(B).

         III. Analysis

         Mr. Cooper makes two arguments in support of his position: (1) he did not “obtain” the “proceeds” the government seeks in the forfeiture order; and (2) per the rule of lenity, “proceeds” should be defined as “net proceeds.”[2] Def.'s Response, ECF No. 238 at 3-8.

         In support of his first argument, Mr. Cooper relies on Honeycutt v. United States, 137 S.Ct. 1626 (2017). In Honeycutt, the Supreme Court resolved a disagreement among the United States Courts of Appeals regarding whether co-conspirators could be jointly and severally liable in forfeiture for any proceeds from the conspiracy pursuant to section 853. 137 S.Ct. at 1629. In that case, two brothers, one of whom was the owner and the other the sales and inventory manager of a hardware store, were indicted for various federal crimes relating to their sale of iodine while knowing that it would be used to manufacture methamphetamine. Id. at 1630. The government sought forfeiture against each brother of the total profits from the sale of the iodine on the theory that, as co-conspirators, they were jointly and severally liable for any proceeds from the conspiracy. Id. at 1630-31. The Supreme Court held joint and several liability to be inconsistent with the text and structure of the statute. Id. at 1626.[3]

         To illustrate its analysis, the Court provided the following example of joint and several liability in the context of criminal forfeiture: A farmer masterminds a scheme to grow, harvest, and distribute marijuana on local college campuses. Id. at 1631. He recruits a local college student to deliver packages and pays the student $300 per month. Id. In one year, the mastermind earns $3 million and the student earns $3, 600. Id. If joint and several liability applied, the Court observed, the student would face a forfeiture judgment of proceeds of the entire conspiracy-$3 million-“even though he never personally acquired any proceeds beyond the $3, 600.” Id. at 1632. Turning to the statute, the Court observed that sections 853(a)(1), [4](2), [5] and (3)[6] “by their terms, limit forfeiture under § 853 to tainted property.” Id. at 1632. Returning to the example, the Court noted that if the college student

were held jointly and severally liable for the proceeds of the entire conspiracy, he would owe the government $3 million. Of the $3 million, $2, 996, 400 would have no connection whatsoever to the student's participation in the crime and would have to be paid from the student's untainted assets. Joint and several liability would thus ...

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