The Supreme Court has just made an important step towards protecting defendants in criminal forfeiture. In Honeycutt v. United States, No 16-142 (June 5, 2017), the Court held that a defendant may not be held jointly and severally liable for property that his co-conspirators derived from the crime but that the defendant did not acquire.. This means that if a defendant did not actually obtain proceeds from a crime, he cannot be ordered to forfeit the proceeds of a crime just because he was part of a conspiracy.
In Honeycutt, Terry Honeycutt was a salaried employee at a store owned by his brother. He started noticing an increase in the number of “edgy looking” people purchasing Polar Pure, an iodine-based water purification product, so he called the local police. The police confirmed Terry’s suspicion that Polar Pure was being used to make methamphetamine and that he shouldn’t sell it if he felt uncomfortable. The store owned by his brother was the only place that sold Polar Pure in the area, and the Honeycutt brothers were the only ones who sold it. The Drug Enforcement Agency began investigating the brothers and a grand jury soon indicted both brothers. Terry’s brother pled guilty, and Terry went to trial. Terry was indicted on 11 of the 14 counts with which he was charged. The government tried to forfeit $70,000 from Terry. The jury did not order any forfeiture of the proceeds of the sales, because it found that because Terry was a salaried employee he did not reap the proceeds of the conspiracy.
Terry opposed any forfeiture, arguing that he had not received, or “obtained” even “indirectly” any of the profits from the unlawful drug sales. The government conceded that Terry didn’t receive any of the profits, but argued that he should be liable because other federal appellate courts have held that co-conspirators can be ordered to forfeit assets they had not obtained under a “joint and several liability” theory – the theory that conspirators can be liable for the foreseeable crimes of their co-conspirators.
On appeal, the U.S. Court of Appeals for the Sixth Circuit reversed in part and found that the doctrine of joint and several liability applied to co-conspirators for the purpose of forfeiture of the proceeds of drug sales. The Supreme Court reversed the Court of Appeals holding that a defendant is not required to forfeit money generated by the co-conspirator that he himself never received, solely because of his membership in a conspiracy. The Supreme Court held that forfeiture pursuant to the Comprehensive Forfeiture Act of 1984, 21 U.S.C. §853(a)(1), is limited to property the defendant himself actually acquired. The government must now individualize its assessment of forfeitable property based upon the amount each defendant obtained. This ruling is a major change and a huge blow to the government’s ability to forfeit a criminal defendant’s property.
What remains to be seen is whether the principles enunciated by the Supreme Court in this case will also apply to restitution. Certainly, from this day forth, defense counsel should argue that the same principles apply to restitution.