By Dhar Law, LLP

In 1998, a businessman co-founded a company that would invest the funds clients made from selling their houses until they were able to purchase new property, which provided tax benefits for those clients.

The man had two bank accounts that he used for the transactions: One held the clients’ money, and the other was for investment purposes. He began making aggressive investments with the clients’ funds. Although he initially made profits, eventually, he started losing money, but he didn’t tell his clients that there were significant losses. Instead, he took on more clients, and, within 3 years of starting his business, he had lost around $9 million.

MAIL AND WIRE FRAUD CONVICTION

For his risky investment practices, the man was charged with and convicted of mail and wire fraud. In criminal cases where money or property was derived from a crime, the court may order the defendant to forfeit, or give up, items of value that resulted from the criminal conduct. In this case, a U.S. District Court Judge ordered the man to forfeit $14 million.

FORFEITURE ORDER TAKEN TO APPEALS

The man appealed the criminal forfeiture order, stating that, under the Sixth Amendment, he was entitled to have a jury decide the amount to be given up. However, the 1st U.S. Circuit Court of Appeals denied his appeal. Judge Sandra L. Lynch wrote that, in 1995, the Supreme Court decided in Libretti v. United States that criminal forfeiture was a sentencing matter and not entitled to be determined by a jury. The 1st Circuit must adhere to that decision.

However, the Supreme Court has made other rulings since Libretti that could warrant another look at how the forfeiture amount was decided in the current case. For instance, in 1995, the Supreme Court ruled in Apprendi v. New Jersey that a jury can decide non-conviction elements of a crime. Attorney Vikas S. Dhar told Massachusetts Lawyers Weekly that the ruling could be brought up on appeal, but if a jury decides a forfeiture amount, the man could be looking at giving up more than what the court initially ordered.

The man also argued on appeal that the court ordered forfeiture on funds he never actually “acquired.” However, Judge Lynch replied by writing that the man had control of the funds at some point, which meets the definition of “acquired.” Attorney Dhar said in Massachusetts Lawyers Weekly that this decision means that, “no matter how tangentially related or involved” a person is in a scheme, they could be liable even if the property was in their control for the “most fleeting of periods.”

REACH OUT TO DHAR LAW, LLP FOR LEGAL REPRESENTATION

If you were charged with a criminal offense, our attorneys can provide the defense you need. We have the legal know-how to challenge court decisions and understand the implications of previous rulings on your case.

For a free case evaluation, contact us by phone at 617 880-6155 or online.