United States Court of Appeals
For the First Circuit
No. 10-1459
UNITED STATES,
Appellee,
v.
RAMON ZORRILLA-ECHEVARRÍA,
Defendant, Appellant,
ANDRES CASTILLO-PEÑA,
Claimant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Lynch, Chief Judge,
Stahl and Thompson, Circuit Judges.
Luis Rafael Rivera, on brief for appellant.
Nelson Pérez-Sosa, Assistant United States Attorney, Julia M.
Meconiates, Assistant United States Attorney, and Rosa Emilia
Rodriguez-Velez, United States Attorney, on brief for appellee.
November 22, 2011
LYNCH, Chief Judge. This case involves the procedures
governing criminal forfeiture, the distinction between a criminal
forfeiture that constitutes an in personam money judgment and a
criminal forfeiture of specific assets, and the rights of third
parties in a forfeiture scenario. We affirm in part, vacate in
part, and remand for further proceedings consistent with this
opinion. The case provides a cautionary tale for forfeitures in
bulk cash smuggling and other cash seizure cases.
I.
On October 5, 2007, Ramon Zorrilla-Echevarría boarded the
Carribean Express, a ferry due to travel from Mayaguez, Puerto Rico
to the Dominican Republic. Zorrilla-Echevarría checked as luggage
two doors, similar to those that would be found on a house, before
boarding the ferry. United States Customs and Border Patrol is in
charge of inspecting luggage and cargo on ferries making such
foreign trips. Customs, through use of a routine X-ray machine on
the doors, detected currency totaling approximately $543,801 inside
of them. Zorrilla-Echevarría had not declared any of the currency
and was arrested. Customs seized the cash located in the doors and
appears to have retained possession of it throughout the course of
the proceedings in this case.
On October 24, 2007, a grand jury issued a two count
indictment against Zorrilla-Echevarría. Count one charged
Zorrilla-Echevarría with knowingly and willfully transporting
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approximately $543,8261 in cash from Mayaguez, Puerto Rico to the
Dominican Republic, without first filing a report in compliance
with regulations promulgated by the Secretary of the Treasury, in
violation of 31 U.S.C. § 5316(a)(1)(A) & (b) and § 5322(a).2
Count two charged Zorrilla-Echevarría with willfully
evading the reporting requirements of § 5316 by concealing the same
amount of currency inside the two wooden doors in an attempt to
transport the currency to the Dominican Republic, in violation of
31 U.S.C. § 5332.3
Criminal forfeiture of $543,826, pursuant to 31 U.S.C.
§ 5317(c)(1) and § 5332(b)(2), was sought based on both counts of
the indictment. These provisions require a court, when imposing a
sentence for violations of various sections of Title 31, including
the portions Zorrilla-Echevarría was charged with violating, to
1
The record does not indicate why this amount and the
$543,801 testified to at trial differ.
2
These sections provide a criminal penalty for an individual
who "willfully" "transports, is about to transport, or has
transported, monetary instruments of more than $10,000 at one time
. . . from a place in the United States to or through a place
outside the United States," without first filing a report with the
Secretary of the Treasury. 31 U.S.C. §§ 5316(a)(1)(A), 5322(a).
3
This "[b]ulk cash smuggling" is a criminal offense under
§ 5332. The section provides a criminal penalty for "[w]hoever,
with the intent to evade a currency reporting requirement under
section 5316, knowingly conceals more than $10,000 in currency or
other monetary instruments on the person of such individual or in
any conveyance, article of luggage . . . or other container, and
transports or transfers or attempts to transport or transfer such
currency . . . from a place within the United States to a place
outside of the United States." 31 U.S.C. § 5332(a)(1).
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"order the defendant to forfeit all property, real or personal,
involved in the offense and any property traceable thereto,"
utilizing the procedures found in 21 U.S.C. § 853. 31 U.S.C.
§ 5317(c)(1); see also id. § 5332(b)(2) (substantially same
forfeiture provision). In addition, § 5332(b)(4) allows the court
to "enter a personal money judgment against the defendant for the
amount that would be subject to forfeiture" when "the property
subject to forfeiture . . . is unavailable, and the defendant has
insufficient substitute property that may be forfeited." Id.
§ 5332(b)(4).
A one-day jury trial was held on January 14, 2008, and
the jury found Zorrilla-Echevarría guilty on both counts. The
government then moved for a preliminary forfeiture order, for the
same amount as detailed in the indictment ($543,826), pursuant to
Federal Rule of Criminal Procedure 32.2. The district court
granted this motion on March 17, 2008, ordering that the "Defendant
shall forfeit to the United States $543,826.00 in U.S. currency,
which is equal to the total amount of money Defendant obtained as
the result of the above-mentioned violations."
Zorrilla-Echevarría was sentenced to 41 months'
imprisonment on May 14, 2008. At the sentencing hearing, the
government requested that the forfeiture amount be included as part
of the judgment; the judge agreed, but as events transpired, that
did not happen.
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The day after the sentencing hearing, Zorrilla-Echevarría
and a third party, Andres Castillo-Peña, filed petitions for
ancillary hearings, see 21 U.S.C. § 853(n); Fed. R. Crim. P.
32.2(c), asserting that Castillo-Peña was the rightful owner of
$343,000 of the forfeiture amount, while Zorrilla-Echevarría owned
the remaining $200,751.
Before these petitions were acted on, the district court
entered judgment as to Zorrilla-Echevarría's crime. The judgment,
however, made no mention of the forfeiture the district court had
agreed to impose in its order of preliminary forfeiture and at the
sentencing hearing.
Zorrilla-Echevarría immediately filed a motion for
reconsideration of his sentence, which was denied on June 5. He
also filed a notice of appeal from the judgment on June 3, 2008;
this became case number 08-1823 on appeal.
The district court denied both petitions for ancillary
hearings on June 5, explaining that "[a]ncillary hearings are not
appropriate in the context of a money judgment." Both Zorrilla-
Echevarría and Castillo-Peña moved for reconsideration, which was
denied on June 25. The district court again explained that the
forfeiture was pursuant to a money judgment, rather than a
forfeiture of specific property, and "Zorilla and Castillo cannot
establish an interest in this money judgment." A second notice of
appeal was filed, by both Castillo-Peña and Zorrilla-Echevarría,
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from this set of decisions regarding the ancillary hearing on July
11, 2008. This became case number 08-2008 on appeal.
These appeals were consolidated on January 6, 2009.
However, neither appeal was ever briefed. There were numerous
requests for extensions of time by Zorrilla-Echevarría and
Castillo-Peña, and numerous notices of default and intent to
dismiss issued by the court for failure to prosecute the appeal.
Eventually, Zorrilla-Echevarría filed a motion for voluntary
dismissal on December 16, 2009; Castillo-Peña filed a similar
motion on March 31, 2010. A judgment dismissing both cases
pursuant to Federal Rule of Appellate Procedure 42(b) was issued on
April 9, 2010.
Meanwhile, on October 13, 2009, the government filed in
the district court a motion to amend the preliminary forfeiture
order to change the amount of forfeiture from "$543,826 in U.S.
currency" to "$543,731."4 However, it also attached a proposed
forfeiture order which was not suitable for money judgments. The
district court granted this motion on October 20, 2009. The order
accompanying this motion, however, discussed the procedures and
provisions relevant to a forfeiture of specific property, and not
to imposition of a money judgment. The order directed the
government to publish notice of the order, so that third parties
4
The motion did not explain the reason for this change,
other than noting that the preliminary order of forfeiture
"[i]nadvertently" indicated the wrong amount.
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who might claim an interest in the property could have an
opportunity to establish that interest, as is required before a
forfeiture of specific property may become final as to third
parties. See Fed. R. Crim. P. 32.2(b)(4)(A). The government
published notice as required by the order for the requisite time
period, and submitted a notice certifying this compliance on
December 15, 2009. This was not consistent with the court's
earlier statement that it had intended a money judgment.
Shortly thereafter, on December 23, Zorrilla-Echevarría
filed a motion to strike and for a return of property, claiming
that, because the preliminary forfeiture order was for a money
judgment, the district court and the government could not now
switch tack and attempt to impose a forfeiture of specific
property. In a sense, this was a switch in tack by Zorrilla-
Echevarría, who had earlier challenged the order as one not for a
money judgment. Zorrilla-Echevarría further argued that the time
period for amending the judgment had lapsed, and, as a result, that
Zorrilla-Echevarría and Castillo-Peña were entitled to a return of
the seized cash.
This motion was denied by the district court on March 12,
2010. The district court reiterated that the forfeiture order was
in the form of a money judgment. It then explained that it viewed
the government's motion to amend the forfeiture order, which had
been filed on October 13, 2009 and granted on October 20, 2009, as
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a motion to attach the cash (which was still held by Customs) under
Federal Rule of Civil Procedure 64, which provides that "throughout
an action, every remedy is available that, under the law of the
state where the court is located, provides for seizing a person or
property to secure satisfaction of the potential judgment,"
including attachment. The court then found that under Puerto Rico
Rule of Civil Procedure 56.2, it could attach the funds given that
there was "a debt liquid, due, and payable." The court concluded
by ordering the attachment of the $543,731 of cash in possession of
Customs, "pending execution of the money-judgment forfeiture
entered against Defendant."
At the same time, the district court entered another
order that amended two prior orders. First, the order amended the
amended preliminary order of forfeiture (which was issued on
October 13, 2009) to remove all references to the procedures
involved with orders of forfeiture of specific property, and
instead to simply provide that Zorrilla-Echevarría "shall forfeit
$543,731 in the form of a money judgment to be enforced against
him." Second, the order amended the judgment to provide that
"[t]he defendant shall forfeit to the United States the amount of
$543,731."
Zorrilla-Echevarría and Castillo-Peña have appealed, and
this decision is from that appeal.
-8-
After the filing of the notice of appeal, on August 9,
2010, the government filed a motion requesting issuance of a final
order of forfeiture, in the amount of $543,731. The court granted
the motion on August 31, and once again explained that no ancillary
proceeding was necessary before the order became final because the
forfeiture consisted of a money judgment.
II.
There are three different types of criminal forfeiture;
the relevant statutory provisions, and applicable procedures, vary
between the types. As this case involves dispute over which type
of forfeiture occurred and what procedures were required, a brief
description of each type is necessary. Further complicating
matters is the fact that Federal Rule of Criminal Procedure 32.2
was amended in 2009, after the original entry of judgment in this
case but before the amendment of the judgment to include the
forfeiture order. The pre-2009 rules are discussed below.
A criminal forfeiture may take the form of either (1) "an
in personam judgment against the defendant for the amount of money
the defendant obtained as proceeds of the offense," (2) forfeiture
of specific assets related to criminal activity, or (3) forfeiture
of "substitute assets" if the specific assets are unavailable.
United States v. Candelaria-Silva, 166 F.3d 19, 42 (1st Cir. 1999).
Only the distinction between the first two types is relevant here.
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The beginning of the forfeiture process is the same for
both types. The government must include notice of intent to seek
forfeiture in the indictment, and as soon as practicable after a
verdict or guilty plea, "the court must determine what property is
subject to forfeiture under the applicable statute." Fed. R. Crim.
P. 32.2(a), (b) (2008).
At this point, the procedures diverge. For a money
judgment forfeiture, the court "must determine the amount of money
that the defendant will be ordered to pay," and upon such a
determination must issue a preliminary notice of forfeiture
"setting forth the amount of any money judgment." Fed. R. Crim. P.
32.2(b)(1), (b)(2) (2008). This order becomes final at sentencing,
"and must be made a part of the sentence and be included in the
judgment." Fed. R. Crim. P. 32.2(b)(3) (2008). At this point the
money judgment forfeiture order becomes appealable. Fed. R. Crim.
P. 32.2 advisory committee's notes on the 2000 amendments ("Because
the order of forfeiture becomes final as to the defendant at the
time of sentencing, his right to appeal from that order begins to
run at that time."). There is no provision for third party
involvement in the forfeiture determination: "no ancillary
proceeding is required to the extent that the forfeiture consists
of a money judgment." Fed. R. Crim. P. 32.2(c)(1) (2008). That is
because "[a] money judgment is an in personam judgment against the
defendant and not an order directed at specific assets in which any
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third party could have any interest." Fed. R. Crim. P. 32.2
advisory committee's notes on the 2000 amendments.
By contrast, for a forfeiture of specific assets, the
court "must determine whether the government has established the
requisite nexus between the property and the offense." Fed. R.
Crim. P. 32.2(b)(1) (2008). If such a nexus is found, the court
must issue a preliminary notice of forfeiture "directing the
forfeiture of specific property without regard to any third party's
interest in all or part of it." Fed. R. Crim. P. 32.2(b)(2)
(2008).
Before this order may become final, under the forfeiture
statute at issue in this case, 21 U.S.C. § 853, the government must
"publish notice of the order and its intent to dispose of the
property." 21 U.S.C. § 853(n)(1). "Any person, other than the
defendant, asserting a legal interest in property which has been
ordered forfeited . . . may, within thirty days of the final
publication of notice . . . petition the court for a hearing to
adjudicate the validity of his alleged interest in the property."
Id. § 853(n)(2).
If no such petition is filed, the order becomes final "if
the court finds that the defendant . . . had an interest in the
property that is forfeitable under the applicable statute." Fed.
R. Crim. P. 32.2(c)(2) (2008). The forfeiture must be made a part
of the sentence and included in the judgment, as is the case with
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money judgments. Fed. R. Crim. P. 32.2(b)(3) (2008). At this
point in time, again as was the case with money judgments, the
order is final and appealable by the defendant. See Fed. R. Crim.
P. 32.2(c)(2) (2008) ("The defendant may not object to the entry
of the final order on the ground that the property belongs, in
whole or in part, to a codefendant or third party; nor may a third
party object to the final order on the ground that the third party
had an interest in the property.").
If a third-party petition is filed, the court is to
determine whether the third party has a valid interest in the
property and amend, or leave unaltered, the final order of
forfeiture as is appropriate. See 21 U.S.C. § 853(n)(6); Fed. R.
Crim. P. 32.2(c)(2) (2008). This ancillary hearing is irrelevant
to the finality of the order with respect to the defendant. Fed.
R. Crim. P. 32.2 advisory committee's notes on the 2000 amendments
("[B]ecause the ancillary hearing has no bearing on the defendant's
right to the property, the defendant has no right to appeal when a
final order is, or is not, amended to recognize third party
rights.").
III.
Zorrilla-Echevarría and Castillo-Peña raise distinct
arguments on appeal. Zorrilla-Echevarría advances two theories as
to why the forfeiture order was improper and the funds should be
returned to him. First, he argues that the statutory provisions he
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was convicted under do not confer the authority to impose a money
judgment. Second, he claims that even if the court had such
authority, the court failed to include the money judgment as part
of the original sentence, and did not have the authority to later
amend that sentence because the amendment took place well after the
original sentence was imposed.
Castillo-Peña also advances two theories on appeal.
First, he claims that he was deprived of due process because he was
never granted an ancillary hearing. Second, he argues that the
delay between the seizure of property and the initiation of the
forfeiture proceedings took so long as to result in a due process
violation.
A. Zorrilla-Echevarría's Claims
1. Lack of Authority to Enter Money Judgment
Zorrilla-Echevarría argues that the district court lacked
the authority to impose a money judgment under the relevant
statutory provision. The argument begins with the premise that 31
U.S.C. § 5332(b)(4), by its terms, allows a personal money judgment
to be entered only when the property "involved in the offense" is
"unavailable." 31 U.S.C. § 5332(b)(2), (b)(4). Zorrilla-
Echevarría contends that, since the government had seized the
actual cash involved in the offense, it was never unavailable,
§ 5332(b)(4) was never triggered, and the court thus lacked
authority to enter a personal money judgment.
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We do not consider the merits of this argument,5 as
Zorrilla-Echevarría knew that the forfeiture was in the nature of
a money judgment at the time his first appeal was docketed, yet he
never raised the matter, and that appeal was dismissed. Zorrilla-
Echevarría's attempt to do so now is untimely; the initial
forfeiture decision is not before us. As a result, we need not
address the government's contention that, if the issue is not
waived, review is for plain error.
The version of Rule 32.2 in effect at the time of
sentencing explained that "[a]t sentencing . . . the order of
forfeiture becomes final as to the defendant." Fed. R. Crim. P.
32.2(b)(3) (2008). As a result, an appeal from the judgment
imposing the sentence was the appropriate vehicle for Zorrilla-
Echevarría to contest the court's authority to impose a money
judgment. See Fed. R. Crim. P. 32.2 advisory committee's notes on
the 2000 amendments ("Because the order of forfeiture becomes final
as to the defendant at the time of sentencing, his right to appeal
from that order begins to run at that time."). The present attempt
5
We have held that 21 U.S.C. § 853 authorizes the imposition
of a money judgment. See United States v. Hall, 434 F.3d 42, 58-60
(1st Cir. 2006). We have not addressed whether 31 U.S.C. § 5332,
which by its own terms requires a money judgment if the property
involved in the offense is "unavailable" and "the defendant has
insufficient substitute property," also authorizes money judgments
in other circumstances. 31 U.S.C. § 5332(b)(2), (b)(4). Section
5332 does provide that "the seizure, restraint, and forfeiture of
property under this section shall be governed by [21 U.S.C.
§ 853]." 31 U.S.C. § 5332(b)(3).
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to challenge this judgment by arguing that the court lacked
authority to impose a money judgment forfeiture is untimely. See
Fed. R. App. P. 4(b).
This is so notwithstanding two potentially contrary
considerations. First, it is true that the judgment itself did not
contain any mention of the forfeiture, in contravention of the
requirements of Rule 32.2(b)(3). See Fed. R. Crim. P. 32.2(b)(3)
(2008) (explaining that the order of forfeiture "must . . . be
included in the judgment") (emphasis added).
While this should not have happened, as it is a violation
of the Rule, "[t]he appropriate remedy for violation of the Rule
depends on context." United States v. Yeje-Cabrera 430 F.3d 1, 14
(1st Cir. 2005). The failure to include the forfeiture in the
judgment, when a preliminary notice of forfeiture has issued, and
at sentencing the forfeiture question was discussed, is "largely a
housekeeping" issue and "does not itself go to any fundamental
rights of defendants."6 Id. at 14-15. As a result, there is no
reason that the failure to explicitly include the forfeiture in the
judgment itself somehow prevented Zorrilla-Echevarría from raising
the issue during his first appeal.
6
This conclusion is reinforced by a 2009 amendment to Rule
32.2 (which was not in force at the time of the original judgment),
providing that "[t]he court must also include the forfeiture order,
directly or by reference, in the judgment, but the court's failure
to do so may be corrected at any time under Rule 36." Fed. R.
Crim. P. 32.2(b)(4)(B) (2010) (emphasis added).
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Second, it is also true that there was some ambiguity in
the district court's preliminary forfeiture order as to whether
that order imposed a money judgment or a forfeiture of specific
property.7 However, the money judgment nature of the forfeiture
order was made clear when Zorrilla-Echevarría and Castillo-Peña's
motions for ancillary hearings were denied. There, the district
court explained that such hearings "are not appropriate in the
context of a money judgment." The district court again explained,
in denying the motion for reconsideration regarding the ancillary
hearing request, that the court "ordered forfeiture pursuant to a
money judgment, not the forfeiture of specific property . . . .
Accordingly, the amount that must be turned over . . . is not the
actual currency involved in the offense, but an amount equivalent
to it." This clarification was provided after the first notice of
7
The preliminary order of forfeiture does not explicitly
state that it was a money judgment rather than a forfeiture of
specific property. It did state that "Defendant shall forfeit to
the United States $543,826.00 in U.S. Currency, which is equal to
the total amount of money Defendant obtained as the result of the
above-mentioned violations." The "in U.S. Currency" language is
unclear and does not indicate whether this was a money judgment or
a forfeiture of specific property. The preliminary forfeiture
order also explained that "the government has established the
requisite nexus between this amount and the aforementioned
offenses," a requirement only applicable in the context of a
forfeiture of specific property. See Fed. R. Crim. P. 32.2
advisory committee's notes on the 2000 amendments ("To the extent
that the government is seeking forfeiture of a particular asset
. . . the court must find that the government has established the
requisite nexus between the property and the offense.").
Nevertheless, any ambiguity in the preliminary order was clarified
in time for Zorrilla-Echevarría to raise the argument he now seeks
to make during his first appeal.
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appeal was filed. Nevertheless, the clarification took place well
before the appeal was actually docketed in the First Circuit,
giving Zorrilla-Echevarría ample opportunity to challenge the
imposition of the money judgment.8
The fact that the judgment was amended to include the
forfeiture, and that the preliminary order of forfeiture was
amended to slightly alter the value, explicitly include the phrase
"money judgment," and omit the "in U.S. currency" language does not
permit Zorrilla-Echevarría to raise this challenge that could have
been brought in the first appeal.9 When post-judgment relief is
granted, review of that action on appeal is limited to the change
in the judgment created by the post-judgment action; the simple
fact that a judgment was amended does not somehow open the entire
judgment up to attack. See Fed. R. Crim. P. 32.2(b)(4)(C) (2010)
("If the court later amends or declines to amend a forfeiture order
to include additional property . . . the defendant or the
government may file an appeal regarding that property under Federal
Rule of Appellate Procedure 4(b).") (emphasis added); cf. Browder
8
The second notice of appeal adds further support to this
conclusion. This appeal, and its consolidation with the earlier
appeal, makes it clear that Zorrilla-Echevarría knew of, and could
have challenged the imposition of, the money judgment during the
first appeal.
9
The modified preliminary order of forfeiture also omitted
any reference to the nexus with the offense required for specific
asset forfeitures and the fact that it would become final at
sentencing.
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v. Dep't of Corr., 434 U.S. 257, 263 n.7 (1978) (explaining that
"an appeal from denial of [Federal Rule of Civil Procedure 60(b)
post-judgment] relief does not bring up the underlying judgment for
review"); Rodriguez-Antuna v. Chase Manhattan Bank Corp., 871 F.2d
1, 2 (1st Cir. 1989) (appeal from order denying request for relief
from judgment does not "resurrect appellants' expired right to
contest the merits of the underlying judgment, nor bring the
judgment itself before us for review").
Here, the change in the judgment consisted of (1)
complying with the formal requirement that the judgment include the
forfeiture, (2) a slight change in the dollar amount to be
forfeited, (3) an explicit inclusion of the phrase "money judgment"
in the preliminary order of forfeiture, and (4) omission of the
phrase "in U.S. Currency" after the statement of the dollar amount.
None of these changes conferred upon Zorrilla-Echevarría the
ability to attack the court's authority to impose a money judgment,
when it was perfectly clear during the pendency of the prior appeal
that such a judgment was what the court had in fact imposed.10
2. Amendment of the Judgment to Include Forfeiture
Zorrilla-Echevarría's second argument is that, even if
the district court had the authority to impose a personal money
judgment, the process it used was procedurally improper, and thus
10
We do not address whether these changes, of themselves,
were permissible, as Zorrilla-Echevarría does not raise this
question on appeal.
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the final forfeiture is unenforceable. This argument is premised
on the fact that the court's failure to include the forfeiture in
the judgment was error and his argument that this type of error
could not be corrected by amendment. He contends this error
renders the forfeiture invalid.
This is incorrect. Federal Rule of Criminal Procedure 36
provides that "[a]fter giving any notice it considers appropriate,
the court may at any time correct a clerical error in a judgment
. . . ." We have noted and now conclude that the omission of a
forfeiture from the judgment, where there was a proper preliminary
order of forfeiture as well as an imposition of forfeiture at the
sentencing hearing, can be remedied under Rule 36.11 Yeje-Cabrera,
430 F.3d at 14-15, n.6; see also United States v. Quintero, 572
F.3d 351, 353 (7th Cir. 2009) ("[T]he failure to include forfeiture
in a judgment, that everyone intended to be included, constitutes
a clerical error, correctable under Rule 36.") (applying pre-2009
Rule 32.2).
This conclusion is reinforced by a 2009 amendment to Rule
32.2 (which was not in force at the time of the original judgment),
11
We do not address whether the amendment to the preliminary
forfeiture order itself was permissible, as Zorrilla-Echevarría
does not raise this question on appeal; he only challenges the
amendment of the judgment to include the forfeiture. See Fed. R.
Crim. P. 32.2 advisory committee's notes on the 2009 amendments
("Once the sentence has been announced, the rules give the
sentencing court only very limited authority to correct errors or
omissions in the preliminary forfeiture order.").
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providing that "[t]he court must also include the forfeiture order,
directly or by reference, in the judgment, but the court's failure
to do so may be corrected at any time under Rule 36." Fed. R.
Crim. P. 32.2(b)(4)(B) (2010) (emphasis added).12
As a result, the fact that the district court did not
initially include the forfeiture in the judgment does not render
the forfeiture invalid, given that the district court issued a
preliminary notice of forfeiture and included the forfeiture during
the sentencing hearing.
B. Castillo-Peña's Claims
Castillo-Peña argues that he was deprived of due process,
because he filed a third party petition asserting that he had a
property interest in the seized funds that were in the possession
of Customs, but received no hearing to determine his interest in
those funds. Castillo-Peña also makes a second argument that the
delay "between seizure of property and the institution of
forfeiture proceedings" was sufficient, of itself, to cause a
constitutional violation of due process.
12
Zorrilla-Echevarría also states that the court erred by not
issuing a final forfeiture order at the time of sentencing. This
is based on a misreading of Rule 32.2. That "the order of
forfeiture becomes final as to the defendant," Fed. R. Crim. P.
32.2(b)(3) (2008), at the time of sentencing does not mean that the
court is required to issue a separate final order of forfeiture at
that time.
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1. Third-Party Hearing
Castillo-Peña was not entitled to invoke the ancillary
proceeding provisions of 21 U.S.C. § 853(n) and Federal Rule of
Criminal Procedure 32.2, as the forfeiture was in the nature of a
money judgment. It is clear that "no ancillary proceeding is
required to the extent that the forfeiture consists of a money
judgment," Fed. R. Crim. P. 32.2(c)(1) (2008), because such a
judgment "is an in personam judgment against the defendant and not
an order directed at specific assets in which any third party could
have any interest," Fed. R. Crim. P. 32.2 advisory committee's
notes on the 2000 amendments.
However, two considerations lead us to accept the
government's invitation to remand. First, at issue is not solely
the money judgment, but also the fact that the government seized
physical cash at the time of Zorrilla-Echevarría's arrest. To
satisfy the money judgment forfeiture, the district court ordered,
on March 12, 2010 (in the same set of orders that amended the
judgment to include the forfeiture and amended the preliminary
forfeiture order), an attachment of those funds pursuant to Federal
Rule of Civil Procedure 64 and Puerto Rico Rule of Civil Procedure
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56.13 This was done without a hearing, which Castillo-Peña contends
violates due process.
Second, there was some confusion, as we have outlined, as
to the nature of the forfeiture order, for which the government
bears much of the responsibility.
The government "concedes the case should be remanded to
the district court so that the government may properly notify
potential third parties, including Castillo-Peña," as the
attachment of the actual, physical currency "only became clear" in
the district court's March 12 order. To allow this to happen, the
government requests that we vacate that portion of the final order
of forfeiture which uses the attached funds to satisfy the money
judgment against Zorrilla-Echevarría. Whether or not this is
required, there has been no objection, so we follow the
government's suggestion. Accordingly, we vacate the final order of
forfeiture and remand to the district court to provide Castillo-
Peña14 with an opportunity to challenge the attachment of the
13
As no challenge is raised to the use of this procedure to
attach the funds, we do not comment on its propriety. The
challenge here focuses solely on the lack of a hearing to protect
third party interests.
14
There is no need for the district court to assess on remand
the interests of any other third parties. Publication of the
forfeiture has already taken place, no one other than Castillo-Peña
has responded, and no challenge has been raised to the
publication's adequacy. See Fed. R. Crim. P. 32.2 advisory
committee's notes on the 2000 amendments ("[I]f a third party has
notice of the forfeiture but fails to file a timely claim, his or
her interests are extinguished, and may not be recognized when the
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$543,731 used to satisfy the money judgment against Zorrilla-
Echevarría. We leave it to the district court to determine the
appropriate procedures to use to provide an adequate opportunity to
contest the attachment.15
2. Delay
Castillo-Peña's second claim is that the delay between
the seizure of the property and the institution of forfeiture
proceedings was sufficient, of itself, to cause a deprivation of
court enters the final order of forfeiture.").
15
The government suggests that the ancillary proceedings of
21 U.S.C. § 853(n) and Federal Rule of Criminal Procedure 32.2(c)
are the appropriate procedures. However, neither Rule 32.2(c) nor
21 U.S.C. § 853(n) apply, on their face, to attachments of property
made to satisfy a personal money judgment. 21 U.S.C. § 853(n)(2)
requires a hearing to allow third parties to attempt to establish
an interest "in property which has been ordered forfeited." Rule
32.2 provides for a third party hearing only "as prescribed by
statute." Fed. R. Crim. P. 32.2(c)(1) (2010). Here, however, we
do not have any "property which has been ordered forfeited"; as the
discussion above makes clear, the distinction between ordering
property forfeited and entering a money judgment is deeply embedded
in Rule 32.2 and the relevant caselaw.
We have previously explained that "[a] money judgment
permits the government to collect on the forfeiture order in the
same way that a successful plaintiff collects a money judgment from
a civil defendant. Thus, even if a defendant does not have
sufficient funds to cover the forfeiture at the time of the
conviction, the government may seize future assets to satisfy the
order." United States v. Misla-Aldarondo, 478 F.3d 52, 73 (1st
Cir. 2007) (alteration in original) (quoting Hall, 434 F.3d at 59).
However, we have noted, but not taken a position regarding, an
ambiguity "as to whether the government can seize assets with a
money judgment just as any judgment creditor could, or whether the
government must follow the substitute assets provisions of 21
U.S.C. § 853(p)." Id. at 74.
This distinction is relevant because there are particular
procedures in place governing forfeiture of substitute property.
See Fed. R. Crim. P. 32.2(e) (2010).
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property in violation of the due process clause. This is not so.
Castillo-Peña relies on United States v. $8,850, 461 U.S.
555 (1983), for this argument. There, the Supreme Court assessed
whether "the Government's delay in filing a civil forfeiture
proceeding violated [a criminal defendant's] due process right to
a hearing 'at a meaningful time.'" Id. at 562 (quoting Fuentes v.
Shevin, 407 U.S. 67, 80 (1972)). The Court, analogizing to a
defendant's right to a speedy trial, explained that the same four
factors should determine whether a delay in instituting forfeiture
proceedings amounts to a constitutional violation: "length of
delay, the reason for the delay, the defendant's assertion of his
right, and prejudice to the defendant." Id. at 564.
We do not need to address whether or not there is a
distinction for due process purposes between the status of a
defendant, as in $8,850, and the status of a third-party claimant,
as here. The only delay complained about here was not in the
starting of the forfeiture procedures, but to hearing Castillo-
Peña's claim to the money.
While the confusion in the district court, largely
induced by the government's sloppiness, about whether this was a
money judgment or a forfeiture of the specific cash seized was
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unfortunate, there was no denial of due process. Castillo-Peña
also had alternatives available to him which he did not take.16
Castillo-Peña will receive a hearing on remand under the
government's concession and we see no prejudice to him. As a
result, Castillo-Peña's claim that the delay itself constituted a
deprivation of property without due process fails.
IV.
We affirm the entry of the money judgment order of
forfeiture with respect to Zorrilla-Echevarría. We vacate the
portion of the final order of forfeiture ordering that the attached
$543,731 in cash shall be used to satisfy the money judgment, and
remand to the district court for further proceedings consistent
with this opinion. So ordered.
16
The $8,850 Court noted that an individual can take various
steps to secure the return of property, including filing an
equitable action for return of the seized property and filing a
motion for return of property under Federal Rule of Criminal
Procedure 41(g). United States v. $8,850, 461 U.S. 555, 569
(1983).
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