United States v. Ferrario-Pozzi

United States Court of Appeals
For the First Circuit

Nos. 03-1393
03-2306
UNITED STATES OF AMERICA,

Appellee,

v.

ROBERTO FERRARIO-POZZI,

Defendant, Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Hector M. Laffitte, U.S. District Judge]

Before

Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Selya, Circuit Judge.

Lorenzo J. Palomares, by Appointment of the Court, for
appellant.
Germán A. Rieckehoff, Assistant United States Attorney, with
whom H.S. Garcia, United States Attorney, and Sonia I. Torres-
Pabón, Assistant United States Attorney, were on brief for
appellee.

May 12, 2004
 COFFIN, Senior Circuit Judge. Appellant Roberto Ferrario-

Pozzi appeals from an order of forfeiture entered against him

pursuant to his guilty plea in a money laundering conspiracy.

Ferrario-Pozzi contends that the written and oral conditions of his

sentence diverged, and thus forfeiture - which he alleges was part

of the former but not the latter - was never a part of the final

judgment. He argues that the Confrontation Clause of the Sixth

Amendment requires that the oral conditions control. We conclude,

however, that forfeiture was a part of Ferrario-Pozzi's sentence.

Due to appellant's request for a continuance, the district court

decided the imprisonment and forfeiture elements of the sentence at

separate hearings, but this did not prevent forfeiture from

becoming part of the final judgment. We therefore affirm the

judgment, including the order of forfeiture entered August 21,

2003.

I. Background

On August 15, 2002, Ferrario-Pozzi pleaded guilty to

participating in a money laundering conspiracy which distributed

nearly $40 million in narcotics proceeds to various global bank

accounts. Ferrario-Pozzi owned a long distance telephone and fax

service that was used as a front for the laundering activity. He

provided a room in his store to facilitate the counting and

divvying up of the money and also received a 7.75% commission on

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various wire transactions conducted by him in furtherance of the

conspiracy.

The indictment contained a count under 18 U.S.C. § 982(a)(1),

which subjects individuals convicted of money laundering or other

monetary transactions derived from unlawful activity to criminal

forfeiture of property involved in the offense. At the plea

hearing, Ferrario-Pozzi conceded that he would have to forfeit at

least two million dollars of ill-gotten gains, but disputed any

amount above that. The plea agreement thus contained a provision

permitting the parties to present evidence regarding forfeiture at

the sentencing hearing.

The sentencing hearing took place on December 18, 2002.

Ferrario-Pozzi received a term of 97 months' imprisonment and three

years of supervised release. There was no direct mention of

forfeiture in the court's oral sentence. When delivering the

sentence, however, the court detailed its factual findings and

explicitly stated that Ferrario-Pozzi was being held accountable

for laundering "more than two million dollars."

Though permitted by the plea agreement, neither party

presented evidence at the December hearing as to the amount over

two million dollars which would be subject to forfeiture. Instead,

Ferrario-Pozzi requested a continuance of the forfeiture portion of

the hearing until mid-February to facilitate further negotiations

with the government. In response to the court's questioning,

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appellant clarified that he was not contesting forfeiture itself,

but simply the amount over two million dollars. The government was

amenable to a continuance, but, perhaps mindful of the very issue

now on appeal, specifically requested that the court not finalize

Ferrario-Pozzi's sentence until the forfeiture issue was concluded.

The court responded that it would enter judgment immediately, but

would hold off on the specifics of the forfeiture order,

explaining, "That's the way it's done always. You sentence first

and then you issue the forfeiture order. There's no problem that

I'm going to order the forfeiture. It's simply the amount that's

at issue." At the conclusion of the sentencing hearing, the court

set February 13, 2003 as the date for an evidentiary hearing on the

forfeiture count. The written judgment, issued five days later on

December 23, 2003, contained an order that "forfeiture shall be no

less than $2,000,000 to be determined at a hearing."

The forfeiture hearing was held as scheduled on February 13,

and, following examination of the government's witnesses, the court

determined that Ferrario-Pozzi would be required to forfeit an

additional $1,705,000, on top of the $2,000,000 already ordered.

Ferrario-Pozzi filed his notice of appeal a week later. On August

21, 2003, the district court issued a preliminary order of

forfeiture detailing the specific assets to be seized and setting

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the total amount of forfeiture at $3,700,000.1 Ferrario-Pozzi

timely filed a second notice of appeal, pertaining specifically to

that order.

Ferrario-Pozzi contends that the district court's oral

sentence, delivered on December 18, 2002, differed from the written

judgment because the former did not include an explicit reference

to forfeiture. Based on our recent decision in United States v.

Melendez Santana, 353 F.3d 93, 100 (1st Cir. 2003), he argues that

the oral statements control, and therefore forfeiture was never

part of his sentence. He also alleges that the procedure by which

forfeiture was imposed impermissibly deviated from Fed. R. Crim. P.

32.2. Finally, he claims that the district court was without

jurisdiction to enter the August 2003 order because he had already

filed his notice of appeal with this court.

We review questions of law de novo, but, to the extent factual

issues are intermingled, consider mixed questions of law and fact

under the more deferential clear error standard. United States v.

Hilton, 257 F.3d 50, 53 (1st Cir. 2001).

II. Discussion

Criminal forfeiture is a form of punishment designed to

"divest the criminal defendant of the profits of the illegal

1
At the forfeiture hearing, the court found that Ferrario-
Pozzi would forfeit an additional $1,705,000. The August
preliminary order of forfeiture set the total amount to be
forfeited at $3,700,000, rather than $3,705,000.

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activity for which he has been convicted." United States v.

Gilbert, 244 F.3d 888, 919 (11th Cir. 2001). As such, it is a part

of the sentence rather than the substantive offense. See Libretti

v. United States, 516 U.S. 29, 38-39 (1995); United States v.

Derman, 211 F.3d 175, 182 (1st Cir. 2000)(superseded by statute on

other grounds). In keeping with this understanding, Rule

32.2(b)(3) of the Federal Rules of Criminal Procedure explicitly

requires that a forfeiture order "be made part of the sentence and

be included in the judgment." We assume, without deciding, the

correctness of the Eleventh Circuit's rule that failure to make

forfeiture a part of the judgment provides grounds for vacating a

prior or subsequent order. See United States v. Pease, 331 F.3d

809, 814 (11th Cir. 2003) (existence of pre-sentence preliminary

order of forfeiture did not relieve the district court of the

obligation to include forfeiture in the judgment); United States v.

Petrie, 302 F.3d 1280, 1284 (11th Cir. 2002) (vacating a forfeiture

order entered six months after sentencing and noting that Rule 32.2

requires forfeiture be made a part of the judgment).

The Confrontation Clause of the Sixth Amendment guarantees

criminal defendants the right to be present during sentencing.

Melendez Santana, 353 F.3d at 99 (citing United States v. Gagnon,

470 U.S. 522, 526 (1985)). We recently held that the right to be

present at sentencing is implicated when there is a material

conflict between a court's oral and written orders regarding

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supervised release. Id. In determining that the oral conditions

controlled, we noted the court could not impose upon a defendant "a

potentially significant new burden . . . without giving him the

opportunity to object . . . at the sentencing hearing." Id. at

100.

Ferrario-Pozzi artfully attempts to position his case within

our holding in Melendez Santana. In that instance, the written

judgment permitted a probation officer to order the defendant to

attend a residential drug treatment program if the defendant failed

a drug test. That particular condition of supervised release was

not announced at the sentencing hearing and thus we determined it

was not a part of the final judgment. Ferrario-Pozzi argues that

the facts here are equivalent; although the court's written

judgment expressly ordered that forfeiture would be at least two

million dollars, the court had not explicitly ordered forfeiture at

the December hearing. Thus, Ferrario-Pozzi contends, enforcement

of the court's written judgment would infringe his Sixth Amendment

right to be present at sentencing.

We disagree with appellant's contention, however, because we

see no material conflict between the result of the oral sentencing

hearing and the written judgment. At each step in the process,

Ferrario-Pozzi was aware that forfeiture of at least two million

dollars would be a component of his sentence. During the plea

conference, Ferrario-Pozzi’s counsel acknowledged that, by virtue

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of the plea agreement, Ferrario-Pozzi would be subject to

forfeiture of at least two million dollars. More importantly, at

the sentencing hearing the district court made a specific finding,

in the course of delivering the sentence, that Ferrario-Pozzi would

be held accountable "for laundering more than two million dollars."

By the terms of the second superseding indictment and the plea

agreement, this was a clear statement that at least two million

dollars - and probably more - would be subject to forfeiture.

These circumstances are in marked contrast to the situation we

remedied in Melendez Santana, where a defendant was suddenly

subject by written order to a previously unmentioned condition.

Moreover, Ferrario-Pozzi bears significant responsibility

for the nature of the forfeiture discussion at the sentencing

hearing. As described earlier, see supra at 3-4, Ferrario-Pozzi's

counsel requested a continuance of the forfeiture aspect of the

hearing to permit continued negotiation with the government. The

court then confirmed that Ferrario-Pozzi conceded the forfeiture

and simply needed time to address the amount and accounts subject

to the order.2 When the court entered its written judgment five

2
At the December hearing, the primary discussion of forfeiture
occurred after the district court ordered imprisonment and stated
that Ferrario-Pozzi had the right to appeal the sentence. At that
point, Ferrario-Pozzi's counsel noted that the forfeiture portion
of the sentence remained to be decided. Ferrario-Pozzi had
submitted a motion for continuance the previous day, but it appears
the court had not seen the motion before the hearing. Presumably,
however, the government was aware of the motion and for that reason
did not address forfeiture at the same time it presented evidence

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days later, it included the condition that the forfeiture would be

at least two million dollars, with the actual amount to be

determined at a hearing. There is no evidence that any of the

parties were confused about the effect of the court's judgment.

Without further objection, Ferrario-Pozzi proceeded to prepare for

and participate in the forfeiture hearing, including vigorous

cross-examination of the government's witnesses.3

In short, the proceedings here fully satisfied the

Confrontation Clause. The right of a defendant to be present is

not all-encompassing, and applies "to the extent that a fair and

just hearing would be thwarted by his absence, and to that extent

only." Gagnon, 470 U.S. at 526 (internal citations omitted). This

limitation is especially appropriate here, where the appellant had

not only notice that the sentence included forfeiture, but also the

opportunity to confront witnesses at a full-fledged evidentiary

hearing.

relevant to imprisonment. It is thus apparent from the discussion
at the hearing that Ferrario-Pozzi was fully cognizant of the terms
of forfeiture that would be sought, including an already
established minimum. Although it may have been preferable for the
court to have delayed issuing the written judgment until after the
February hearing, we do not see that Ferrario-Pozzi was prejudiced
in any way by the sequence of events.
3
At oral argument in this court, appellant's counsel attempted
to suggest that there was confusion over whether the court, in
December 2003, dismissed the forfeiture count of the second
superseding indictment. The court did dismiss the forfeiture
counts of the two earlier indictments on December 23, but these
counts were numbered differently than the forfeiture count under
which Ferrario-Pozzi had already been sentenced.

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 The Eleventh Circuit decisions in Pease, Petrie, and Gilbert,

relied on by appellant, do not dissuade us from the conclusion that

forfeiture was, in this instance, part of the sentence. In Pease,

although a preliminary order of forfeiture had been entered three

weeks prior to sentencing, the sentence itself was "entirely silent

as to forfeiture." 331 F.3d at 811. The court held that the

government could have cross-appealed the defendant's sentence on

the ground that forfeiture was not included, but could not use Fed.

R. Crim. P. 36, authorizing correction of clerical mistakes, to

amend the judgment. Id. at 811-12. In the current case, the

government had no reason to appeal the sentence. Given that the

parties had agreed to a later evidentiary hearing on forfeiture, an

order in the written judgment that Ferrario-Pozzi forfeit not less

than two million dollars is as much as the government could have

legitimately expected.

In Petrie, a forfeiture verdict returned by the jury was not

mentioned at the sentencing hearing, and the judgment stated simply

that Petrie was subject to forfeiture “as cited in count two.” 302

F.3d at 1284. The Eleventh Circuit determined that forfeiture was

thus not part of the judgment, and the district court had no

jurisdiction to enter an order of forfeiture six months later.

Failing altogether to discuss forfeiture at the sentencing hearing

is not the same, however, as purposefully postponing further

elaboration on the topic so that the defendant may have more time

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to negotiate with the government, and subsequently including what

is thus far agreed upon in the written judgment. Any other result

would permit Ferrario-Pozzi to profit from his own dilatory

behavior.

The third case, Gilbert, involved a procedural flaw that

deprived the defendant of his right of allocution. The court

ordered forfeiture at an impromptu, post-verdict hearing - not a

sentencing hearing - during which neither the defendant nor his

attorney was in the courtroom. Gilbert, 244 F.3d at 924.

Ferrario-Pozzi and his counsel, however, attended all three

relevant hearings. Far from being “an invalid attempt to bypass

the procedurally required method of criminal forfeiture,” id. at

925, the procedure here reflected accommodation of Ferrario-Pozzi's

request for a delay in finalizing the forfeiture portion of the

sentence.

Finally, we find unconvincing Ferrario-Pozzi's contention that

the court impermissibly deviated from Rule 32.2, especially as any

divergence from formulaic compliance was occasioned by Ferrario-

Pozzi’s own motion. Rule 32.2(b)(1) directs the court to determine

"[a]s soon as practicable . . . after a plea of guilty . . . what

property is subject to forfeiture under the applicable statute."

At the plea hearing in August 2002, both parties indicated that the

court would be able to complete sentencing - including forfeiture -

at the December hearing. At the last minute, however, appellant

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requested additional time to permit continued negotiations. The

government also added that it remained to be determined which of

various local and foreign bank accounts would be subject to

forfeiture. Given the circumstances and the government's careful

reminder that forfeiture must be included in the sentence, the

court reasonably crafted the written judgment to reflect the extent

of the parties' agreement on forfeiture, with the specific amount

and subject assets to be determined later.

Given our conclusion that forfeiture was properly a part of

the final judgment, Ferrario-Pozzi's objection to the August 21,

2003 order of forfeiture is without merit. He claims the order was

entered without subject matter jurisdiction because by that time he

had already appealed to this court. However, in light of our

ruling that forfeiture was part of the December 2002 judgment, the

August 21, 2003 order can reasonably be considered an amendment of

an existing order under Rule 32.2(e), and thus within the

jurisdiction retained by the court notwithstanding Ferrario-Pozzi's

pending appeal. See Fed. R. Crim. P. 32.2(2) advisory committee's

notes (clarifying that under subsection (e), "the court retains

jurisdiction to amend the order of forfeiture at any time to

include subsequently located or substitute property"); see also

United States v. Hurley, 63 F.3d 1, 23 (1st Cir. 1995)(appeal does

not deprive district court of jurisdiction to amend existing order

of forfeiture to include substitute assets).

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Affirmed.

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