In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16‐2858
UNITED STATES OF AMERICA,
Plaintiff‐Appellee,
v.
RAFI SAYYED,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 11 CR 625‐1 — Gary Feinerman, Judge.
____________________
ARGUED FEBRUARY 22, 2017 — DECIDED JULY 6, 2017
____________________
Before BAUER and WILLIAMS, Circuit Judges, and DEGUILIO,
District Judge.*
WILLIAMS, Circuit Judge. Rafi Sayyed was ordered to pay
$940,000 in mandatory restitution to the American Hospital
Association after pleading guilty to mail fraud. The United
States sought to collect part of the restitution with approxi‐
mately $327,000 contained in Sayyed’s retirement accounts.
* Of the Northern District of Indiana, sitting by designation.
2 No. 16‐2858
The district court granted the government’s motion for turno‐
ver orders. On appeal, Sayyed maintains that the district court
erred in failing to find that his retirement funds qualify as
“earnings” subject to the 25% garnishment cap under the
Consumer Credit Protection Act. We disagree. Because the
garnishment cap only protects periodic distributions pursu‐
ant to a retirement program and the government may reach
Sayyed’s present interest in his retirement funds, the district
court properly granted the government’s turnover motion.
I. BACKGROUND
From 2003 to 2006, while employed as Director of Appli‐
cation for the American Hospital Association (“AHA”), Rafi
Sayyed directed overpriced contracts to companies in ex‐
change for kickbacks. For his crimes, Sayyed plead guilty to
one count of mail fraud, in violation of 18 U.S.C. § 1341, was
sentenced to three months’ imprisonment and ordered to
make restitution payments to the AHA in the amount of
$940,450.00, pursuant to the Mandatory Victims Restitution
Act. 18 U.S.C. § 3663A. As of November 20, 2015, Sayyed still
owed $650,234.25.
In post‐conviction proceedings, the United States sought
to enforce the restitution judgment pursuant to 18 U.S.C.
§ 3613, which permits the government to enforce a restitution
judgment “in accordance with the practices and procedures
for the enforcement of a civil judgment.” The government
served citations to The Vanguard Group (“Vanguard”) and
Aetna, Inc. (“Aetna”) to discover assets in Sayyed’s retirement
accounts. After receiving answers, the government filed a mo‐
tion for turnover orders alleging that the companies pos‐
sessed retirement accounts with approximately $327,000 in
non‐exempt funds that could be used to satisfy the judgment.
No. 16‐2858 3
Sayyed responded to the government’s motion arguing that
his retirement accounts were exempt “earnings” subject to the
25% garnishment cap of the Consumer Credit Protection Act
(the “CCPA”).
The district court granted the government’s motion, find‐
ing that because Sayyed, who was 48‐years‐old at the time,
had the right to withdraw the entirety of his accounts at will,
the funds were not “earnings” and so were not exempt under
the CCPA. The district court directed Vanguard and Aetna to
pay the Clerk of Court the liquidated value of the funds and
ordered the Clerk to reserve a portion of the funds in escrow
for the income tax consequences of the early withdrawal.
II. ANALYSIS
“The district court’s turnover order is a final judgment,
which we review de novo.” Maher v. Harris Trust & Sav. Bank,
506 F.3d 560, 561 (7th Cir. 2007) (quotation and citation omit‐
ted). We have previously held that a district court may enforce
restitution fines against a defendant’s retirement account,
pursuant to 18 U.S.C. § 3613(a). See United States v. Lee, 659
F.3d 619, 621 (7th Cir. 2011); United States v. Hosking, 567 F.3d
329, 335 (7th Cir. 2009). 18 U.S.C. § 3613(a) states that “a judg‐
ment imposing a fine may be enforced against all property or
rights to property of the person fined.” However, enforce‐
ment is subject to Section 303 of the CCPA, which creates a
garnishment ceiling of 25% of a debtor’s disposable earnings
for a week. 18 U.S.C. § 3613(a)(3); see 15 U.S.C. § 1673(a)(1).
Sayyed contends that the funds in his retirement accounts
meet the CCPA’s definition of “earnings” and so are subject to
the 25% garnishment cap. Sayyed does not dispute the district
court’s conclusion that he has a present right to receive the
4 No. 16‐2858
entire balance of his retirement accounts. Instead, he offers
three arguments to assert that the CCPA’s garnishment cap
applies to his retirement accounts. First, he asserts that Lee,
659 F.3d 619, held all retirement funds are “earnings” subject
to the garnishment cap. He then argues that even if lump‐sum
distributions from a retirement account are not subject to the
garnishment cap, the government must wait until he reaches
retirement age and elects a form of distribution (i.e., lump‐
sum distribution or periodic payments) before deciding
whether the CCPA’s garnishment cap applies in his case. Fi‐
nally, Sayyed contends that his retirement funds meet the def‐
inition of “earnings” because the accounts are funded directly
by his earned wages. These arguments fail for the reasons ex‐
plained below.
A. Not all retirement funds are “earnings”
Sayyed erroneously attempts to enlarge our holding in
United States v. Lee, 659 F.3d 619, 621 (7th Cir. 2011), by arguing
we held that all retirement funds are “earnings” subject to the
25% garnishment cap. Lee’s holding, however, is much nar‐
rower: we only held that annual periodic payments from the
defendant’s retirement accounts met the definition of “earn‐
ings” subject to the 25% garnishment cap, as the CCPA ex‐
pressly defines “periodic payments pursuant to a pension or
retirement program” as “earnings.” Id.; see 15 U.S.C. § 1672(a).
In fact, in Lee, the parties “agree[d] that any lump sum distri‐
bution [that Lee] may receive from the plans [would be] sub‐
ject to turnover[.]” Id. at 621. So, a defendant’s present ability
to access a lump‐sum distribution of his entire retirement ac‐
count was not at issue in Lee. In other words, Lee applies only
to the government’s ability to access funds periodically paid
out from a retirement fund, not the government’s ability to
No. 16‐2858 5
access a lump‐sum payment of funds contained within a re‐
tirement account, as is the issue here.
B. Government can seize Sayyed’s present right to dis‐
tribution of funds
Sayyed next argues that the court must wait nearly twenty
years, until he reaches the age at which he can begin receiving
penalty‐free distributions from his retirement accounts, to see
whether he elects to receive lump sum distributions of his en‐
tire accounts or if he elects periodic payments before the court
decides the applicability of the CCPA’s garnishment cap. But
he fails to show any support, in Lee or elsewhere, for this
sweeping proposition.
Instead, a restitution order is a lien in favor of the govern‐
ment on “all property and rights to property” of the defend‐
ant and is treated as if it were a tax lien. 18 U.S.C. § 3613(c);
see also United States v. Kollintzas, 501 F.3d 796, 802 (7th Cir.
2007). With the exception of exempt property, which is not at
issue here, this broad language is intended to “reach every in‐
terest in property that a taxpayer might have.” United States v.
Nat’l Bank of Commerce, 472 U.S. 713, 719‐20 (1985). This means
the government steps into the defendant’s shoes, “aquir[ing]
whatever rights the [defendant] himself possesses.” Id. at 725.
Sayyed does not dispute that he has a present, unconditional
right to access his Vanguard and Aetna funds. So, here, where
Sayyed “has the unrestricted right to withdraw funds from
the account, it is inconceivable that Congress … intended to
prohibit the Government from levying on that which is
plainly accessible to the [defendant].” Id. at 726 (internal quo‐
tation marks and citation omitted). It would be illogical for us
to find that the government acquires every interest in prop‐
erty Sayyed has, but then impose a limitation requiring the
6 No. 16‐2858
government to wait nearly twenty years to see what form of
distribution Sayyed elects simply because he states he would
not exercise his present right to receive lump‐sum distribu‐
tions. The law is not based upon the rights Sayyed would pre‐
fer to exercise; rather, it is based upon the rights Sayyed pos‐
sesses. Here, Sayyed possesses a present, unconditional right
to immediately access the entirety of his retirement accounts,
so, stepping into his shoes, the government may clearly access
his Vanguard and Aetna funds, subject to the tax penalties
faced by Sayyed for early distribution of his retirement funds.
C. Sayyed’s “unrestricted” retirement accounts are not
“earnings”
The CCPA defines “earnings” as “compensation paid or
payable for personal services, whether denominated as
wages, salary, commission, bonus, or otherwise, and includes
periodic payments pursuant to a pension or retirement pro‐
gram.” 15 U.S.C. § 1672(a). A lump‐sum distribution of retire‐
ment funds is clearly not compensation paid for personal ser‐
vices or periodic payments pursuant to a retirement program.
But Sayyed argues that because his retirement funds derive
directly from his earned wages, i.e., his employer deposits a
portion of his earned wages in his retirement account each
paycheck, the funds should be considered “earnings” under
the CCPA. However, the Supreme Court has “cautioned that
earnings do not pertain to every asset traceable in some way
to compensation.” Lee, 659 F.3d at 621 (citing Kokoszka v. Bel‐
ford, 417 U.S. 642, 648 (1974)).
In enacting the CCPA, Congress intended to protect “peri‐
odic payment of compensation needed to support the wage
earner and his family on a week‐to‐week, month‐to‐month
basis.” Kokoszka, 417 U.S. at 651. Consistent with this intent,
No. 16‐2858 7
the CCPA expressly protects persons already receiving peri‐
odic payments pursuant to a retirement plan. See United States
v. DeCay, 620 F.3d 534, 544‐545 (5th Cir. 2010); United States v.
Fussell, 567 F. App’x. 869, 871‐72 (11th Cir. 2014). But the
CCPA is silent as to lump‐sum distributions of retirement
funds, suggesting that such distributions do not qualify as
“earnings.” This is further supported by the fact that a lump‐
sum distribution of retirement funds is not akin to a periodic
payment of compensation needed to support the wage earner
and his family on a regular basis. Thus, we find that a lump‐
sum distribution of retirement funds does not qualify as
“earnings” under the CCPA.
Our holding does not mean, as Sayyed contends, that re‐
tirement accounts become worthless. Rather, as we explain
above, the government only retains those rights the defendant
possesses when it steps into his shoes. If a defendant’s right to
receive a lump‐sum distribution of his retirement funds is
subject to a condition, the government would not have any
more access than the defendant. Rather it would also be sub‐
ject to such condition. So here, where Sayyed has an unre‐
stricted, present right to request lump‐sum distributions from
his retirement accounts, the government, stepping into his
shoes, may exercise this right pursuant to the restitution judg‐
ment.
III. CONCLUSION
We AFFIRM the district court’s order granting the govern‐
ment’s motion for turnover.