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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