United States v. Beach

United States Court of Appeals,

Eleventh Circuit.

No. 95-7050.

UNITED STATES of America, Plaintiff-Appellee,

v.

Harlan J. BEACH, Defendant-Appellant.

May 22, 1997.

Appeal from the United States District Court for the Northern
District of Alabama. (No. CR-90-PT-128-S), Robert B. Propst, Judge.

Before EDMONDSON, Circuit Judge, and KRAVITCH and HENDERSON, Senior
Circuit Judges.

KRAVITCH, Senior Circuit Judge:

Harlan J. Beach appeals the district court's order that: (1)

Beach's self-styled motion for return of property should be

construed as a petition made pursuant to 18 U.S.C. § 3666; and (2)

under 18 U.S.C. § 3666, the court must determine whether Beach has

proven by a preponderance of the evidence that he is entitled to

receive the property in question, money paid to a government

official, regardless of the fact that a jury acquitted Beach of

bribery charges. We affirm.

I.

In 1990, Beach was tried on three counts of bribing an

Internal Revenue Service ("IRS") official in violation of 18 U.S.C.

§ 201. Beach admitted that he paid approximately $240,000 to an

IRS official through a middleman.1 He maintained, however, that

the payment was made not as a bribe, but as a settlement of his tax

1
The middleman apparently passed only $85,000 of the
$240,000 to the IRS official.
debt (which the IRS then estimated at $800,000). The jury returned

not guilty verdicts on all three charges against Beach. The

district court made no disposition of the alleged bribe money

immediately following the criminal trial, and the government

instituted no forfeiture action.

In 1995, Beach filed a motion for return of property in the

district court where he previously had been acquitted. Beach

stated that the IRS still was attempting to collect $800,000 from

him, and he demanded that the district court either declare the

debt satisfied by his prior payment, or order $240,000 returned to

him. The government responded by arguing that Beach's motion was

procedurally deficient, and that his request for return of property

should be handled pursuant to 18 U.S.C. § 3666.2 Further, the

government argued that, under 18 U.S.C. § 3666, the district court

must determine whether Beach had proved by the preponderance

standard that he was entitled to the money. The district court

indicated that, despite the jury's verdict, it was inclined to find

that the funds constituted bribe money. The district court then

held that 18 U.S.C. § 3666 governed the case. At Beach's behest,

the district court certified this appeal before it proceeded

further.3
II.

Because Beach's appeal presents legal questions regarding the

2
The government also noted that it possessed only $85,000.
3
Although the district court entered the orders in question
on the docket for Beach's criminal case, it properly certified
its rulings pursuant to 28 U.S.C. § 1292(b) because the
post-judgment proceedings at issue are essentially civil in
nature. See discussion infra Part II.B.
application of statutes and rules of procedure, review is de novo.

See, e.g., United States v. Logal, 106 F.3d 1547, 1550 (11th

Cir.1997).

A.

As an initial matter, we note that Beach has cited no

authority to support his request for a judicial declaration that he

owes no tax debt. A brief review of relevant tax statutes and

caselaw confirms that this request must be denied because it is

procedurally barred and substantively flawed. See, e.g., 26 U.S.C.

§ 6213 (providing that a person contesting a tax deficiency must

file a petition in the United States Tax Court after exhausting

proper administrative channels); 26 U.S.C. § 7422 (specifying

procedure for filing civil action for "recovery of any internal

revenue tax alleged to have been erroneously or illegally assessed

or collected"); Bowling v. United States, 510 F.2d 112, 113 (5th

Cir.1975) (discussing Internal Revenue Code sections on the

compromising of tax cases and ruling that because "[t]hese

provisions are exclusive and strictly construed ... no theory

founded upon general concepts of accord and satisfaction can be

used to impute a compromise settlement").

B.

Alternatively, Beach seeks return of $240,000, apparently by

way of Fed.R.Crim.P. 41(e). Under this rule, "[a] person aggrieved

by an unlawful search and seizure or by the deprivation of property

may move the district court for the district in which the property

was seized for the return of the property on the ground that such

person is entitled to lawful possession of the property."
Fed.R.Crim.P. 41(e) (emphasis added). Beach does not contend that

the government possesses the alleged bribe money pursuant to "an

unlawful search and seizure"; rather he claims that he is

aggrieved "by the deprivation of property". Id. Courts have held

that this latter phrase encompasses only situations in which the

government holds property lawfully seized beyond the period of time

it needs the property for investigative and/or prosecutorial

purposes. See United States v. Van Cauwenberghe, 934 F.2d 1048,

1060-61 (9th Cir.1991) (discussing cases). Here, however, the

funds in question never were seized, lawfully or unlawfully;

rather, Beach voluntarily conveyed them to a third-party who

willingly passed a portion of the funds to an IRS official. Cf.

United States v. Kim, 738 F.Supp. 1002, 1005 (E.D.Va.1990)

("Although not contraband, the [money] was voluntarily given to the

officials as part of defendant's felonious conduct; it was not

seized.").

The government contends Beach's request is governed by 18

U.S.C. § 3666, which provides that:

Moneys received or tendered in evidence in any United States
Court, or before any officer thereof, which have been paid to
or received by any official as a bribe, shall, after the final
disposition of the case, proceeding or investigation, be
deposited in the registry of the court to be disposed of in
accordance with the order of the court, to be subject,
however, to the provisions of section 2042 of Title 28.

18 U.S.C. § 3666 (emphasis added). The jury's verdict constitutes

a "final disposition" of Beach's criminal case. As a result, the

government argues that the funds in question should be deposited in

the registry of the court for the court's disposal. According to

the government, the district court properly treated Beach's motion
as a petition under 28 U.S.C. § 2042, which provides that "[a]ny

claimant entitled to any such money [held in the registry of the

court] may, on petition to the court and upon notice to the United

States attorney and full proof of right thereto, obtain an order

directing payment to him." 28 U.S.C. § 2042 (emphasis added).

Beach insists that 18 U.S.C. § 3666 does not apply to cases,

such as his, in which the government fails to obtain a bribery

conviction. He maintains that he ought to recover the funds

automatically based on the "fundamental principle of American

jurisprudence: namely, that an accused is innocent until proven

guilty." Appellant's Br. at 10 (emphasis omitted).

The former Fifth Circuit rejected a similar claim in United

States v. Thomas, 75 F.2d 369 (5th Cir.1935), a case in which an

alleged bootlegger was charged with violation of the National

Prohibition Act and attempted bribery. 4 He pleaded guilty to the

liquor charge, but "he was not prosecuted for bribery." Id. at

370. After the statute of limitations for bribery had run, the

bootlegger petitioned the court for return of a $1000 bill he

allegedly paid to a customs agent. The petitioner based his claim

in large part on "the presumption that he [was] innocent of the

charge of bribery." Id. The district court found that, under 18

U.S.C. § 3666 (then codified at 18 U.S.C. § 570), "because there

had been and could be no prosecution against [petitioner] for

bribery, he was entitled to the relief prayed...." Id. The Fifth

4
In Bonner v. City of Prichard, 661 F.2d 1206 (11th
Cir.1981) (en banc), this court adopted as binding precedent all
decisions of the former Fifth Circuit rendered before October 1,
1981.
Circuit reversed and ruled that "the [district] court erred in

rejecting the [government's] answer [to the petition] as immaterial

and ordering the money returned to [petitioner] on the case

stated...." Id. It further held that "the [district] court should

have heard testimony on the issue of bribery thus raised.

[Petitioner] cannot avoid that issue by relying on the presumption

of innocence...." Id.

To the extent Thomas is distinguishable from the instant case

because Beach was acquitted of bribery whereas the petitioner in

Thomas simply was not prosecuted for bribery, more recent authority

from another circuit also counsels against Beach's argument. See

United States v. Kim, 870 F.2d 81 (2d Cir.1989). In Kim, the

Second Circuit concluded that the language of 18 U.S.C. § 3666 and

the statute's cross-reference to 28 U.S.C. § 2042 "make it clear

that a jury verdict in [a] criminal trial is not binding on the

court in a § 3666 proceeding, for the burdens and quanta of proof

applicable to criminal cases and civil cases are substantially

different." Id. at 85.5

Beach attempts to distinguish Kim by pointing out that the

5
In particular, the court noted that 18 U.S.C. § 3666 refers
to "final dispositions", not "convictions", and that it applies
to "proceedings" and "investigations", as well as "cases". Kim,
870 F.2d at 85. The Kim court's conclusion is substantiated
further by a review of other statutory provisions codified near
18 U.S.C. § 3666. This review confirms that Congress knew how to
condition the applicability of laws related to the disposition of
materials involved in an alleged crime upon a defendant's
conviction. See, e.g., 18 U.S.C. § 3665 ("A judgment of
conviction for transporting a stolen motor vehicle in interstate
or foreign commerce or for [a federal felony] involving the use
of threats, force, or violence or perpetrated in whole or in part
by the use of firearms, may in addition to the penalty provided
by law for such offense, order the confiscation and disposal of
firearms and ammunition....").
petitioner in that case presented an entrapment defense at his

bribery trial. The Kim petitioner, therefore, conceded that the

money at issue was paid as a bribe, but escaped criminal liability

because the government induced his action. In contrast, Beach

asserts that he never admitted that the funds in question were paid

as a bribe. The Second Circuit's decision to apply 18 U.S.C. §

3666 in the case before it, however, did not turn upon the fact

that the petitioner in Kim presented an entrapment defense in his

bribery trial. Rather, the court's ruling hinged upon a careful

reading of the statute's language and cross-references. We find

the Second Circuit's analysis equally applicable in this case.

Accordingly, we affirm the district court's conclusion that 18

U.S.C. § 3666 controls cases, such as this one, in which money

voluntarily paid to a government official comes within the purview

of a United States court in connection with a bribery case,

proceeding or investigation.

Beach insists that the extension of 18 U.S.C. § 3666 to

cases, such as his, violates double jeopardy. As the Kim court

noted, however, the statute operates as a remedial, not a punitive,

measure. See Kim, 870 F.2d at 84-85. In this respect, 18 U.S.C.

§ 3666 resembles an in rem forfeiture statute. See, e.g., United

States v. Ambrosio, 575 F.Supp. 546, 549 (E.D.N.Y.1983) (describing

previous codification of 18 U.S.C. § 3666 as an in rem forfeiture

measure); Terrance G. Reed & Joseph P. Gill, RICO Forfeitures,

Forfeitable "Interests", and Procedural Due Process, 62 N.C.L.Rev.

57, 59 & n. 12 (1983) (same). Thus, its application to this case

raises no double jeopardy concerns despite Beach's earlier
acquittal. See United States v. Ursery, --- U.S. ----, ----, 116

S.Ct. 2135, 2148, 135 L.Ed.2d 549 (1996) (holding that "in rem

civil forfeitures are neither "punishment' nor criminal for

purposes of the Double Jeopardy Clause").

With its cross-reference to 28 U.S.C. § 2042, 18 U.S.C. §

3666 expressly requires a claimant, such as Beach, to offer "full

proof of right" to the property at issue before he can "obtain an

order [from the court] directing payment to him." 28 U.S.C. §

2042.6 We concur with the Kim court's conclusion that, given the

civil nature of the proceedings under 28 U.S.C. § 2042, a claimant

must satisfy the preponderance standard of proof. See Kim, 870

F.2d at 84-85. Beach argues that even if 18 U.S.C. § 3666 and 28

U.S.C. § 2042 govern this case and he must prove his entitlement to

the funds at issue, a jury, not the court, should make the

requisite findings of fact. Beach has cited no proper authority to

support this argument. Because proceedings involving the

disposition of judicially-held funds are equitable in nature,

petitions brought under 28 U.S.C. § 2042 should be resolved

exclusively by the court. See, e.g., United States v. $17,400 In

Currency, 524 F.2d 1105, 1108 (10th Cir.1975) (Doyle, J.,

dissenting) (describing petition for withdrawal of funds pursuant

to 28 U.S.C. § 2042 as "[b]eing in the nature of an interpleader

action"); Wood v. Motorola, Inc., 587 F.Supp. 531, 532

6
Even if Fed.R.Crim.P. 41(e) governed this case despite the
absence of a seizure, Beach would still have to show lawful
entitlement to the sought-after property. See Van Cauwenberghe,
934 F.2d at 1061 ("Rule 41(e) motion[s] for return of property,
however, may be denied if the defendant is not entitled to lawful
possession of the seized property ...").
(D.Haw.1984) ("Since the court must order withdrawal of the funds

[under 28 U.S.C. § 2042], it follows that it also has the power to

determine the nature of the distribution.").

III.

For these reasons, the interlocutory order of the district

court certified for appeal is AFFIRMED. This case is REMANDED for

further proceedings consistent with this opinion.